I was dismayed to read the shortsighted Daily News editorial urging the Municipality of Anchorage to consider tapping into funding set aside to market Anchorage as a destination ("City budget woes," Aug. 30). Doing so would hurt our economy far into the city's future.
Tourism is a revenue generator and economic engine for this city and state. With so much discussion focused on budget shortfalls, it is important to remember that revenues from the visitor industry continue to buoy city coffers. Since 2000 alone, Anchorage bed taxes have provided more than $50 million to the municipality's general fund.
However, contributing to city government was not the purpose for establishing the tax.
Proposed by forward-thinking hoteliers in 1975, the bed tax was intended to create a collective Destination Marketing Organization (DMO) to attract and serve visitors to Anchorage. The visitor industry chose to tax itself to fund marketing efforts instead of looking to municipal, state or federal funds.
In 1979, the bed tax rose from 5 percent to 8 percent, enabling the industry to continue marketing Anchorage while allowing for a contribution to the municipality's general fund.
Today, the 12 percent bed tax is split three ways: One-third supports the Anchorage Convention & Visitors Bureau (ACVB) marketing functions; one-third goes to the municipality's general fund; and one-third goes for the bond debt and operations of the Anchorage convention centers.
ACVB's marketing efforts are supplemented by member contributions through annual dues, paid advertising and marketing program fees. We work diligently to maximize the impact of our marketing dollars.
Among our efforts in 2008, ACVB booked $99 million in future convention business and secured positive, global media coverage worth the equivalent of $20.5 million in advertising. We generated 1,056,692 visitors to Anchorage.net, assisted 215,000 visitors at our Visitor Information Centers and trained nearly 4,000 outside travel agents about Anchorage. The overall estimated economic impact of these efforts to the city was $257 million in combined leisure and convention business. Those are real dollars that benefit businesses and individuals throughout the year in our community.
In 2009, we project the bed tax to be approximately $17.1 million, of which $5.7 million will be allocated to the city's general fund. As per our contract, ACVB will receive just under that amount to reinvest in marketing and future business.
Like other organizations, the recession is causing changes within our operation. ACVB is reallocating its resources and doing more with less. Unfortunately, we have had to implement a hiring freeze and downsize our staff by roughly 18 percent.
Nonetheless, the meetings market for Anchorage continues to be strong. ACVB's promotion of the beautiful Anchorage convention centers and the mystique of the Alaska experience continue to draw many delegates to the city, infusing much-needed dollars into Anchorage during the shoulder season and expanding opportunities for the high season.
ACVB's marketing activities have produced steady growth of bed tax dollars for Anchorage. Although this season has been down for the majority of destinations around the globe, including Anchorage, our city has fared better than many. We have a strategic plan to see us through this downturn. I believe that our efforts, much like those after 9/11, will poise our city for a faster recovery.
We cannot jeopardize Anchorage's upcoming growth opportunities. Tapping into essential marketing dollars for short-term budget stopgaps would demonstrate a very limited vision of a future Anchorage. Destination marketing is a highly competitive business, and those destinations that invest in marketing campaigns and efforts capture more visitor dollars.
Julie Saupe is president and CEO of the Anchorage Convention & Visitors Bureau.
By JULIE SAUPE