News for the Hospitality Executive
|By Paula Dobbyn, Anchorage Daily News, Alaska
Knight Ridder/Tribune Business News
Mar. 17, 2004 -- A drop in bed-tax revenue has forced the Anchorage Convention & Visitors Bureau to eliminate four staff positions, said president and chief executive Bruce Bustamante.
Anchorage collected $500,000 less in bed tax last year than in 2002. The city, which imposes an 8 percent tax on people who spend the night in hotels, motels and bed and breakfasts, took in $10.4 million, down from $10.9 million in 2002, Bustamante said. Half of all bed taxes get earmarked to the visitors bureau; the rest go into city coffers.
"We're responding like any other business does when revenues are down," he said Tuesday.
"We're just being very cautious," said John Rense, a board member who recently finished a two-year term as chairman.
A number of factors caused bed-tax revenue to shrink. Tourism has yet to fully recover from the aftermath of the 2001 terrorist attacks; economic uncertainty is causing more travelers to either stay put or pick destinations closer to home; and Anchorage keeps adding more hotels, driving prices down.
More than 500 new hotel rooms became available in Anchorage in the last year and a half, according to a report the visitors bureau released earlier this winter.
"Three or four years ago, it was common to see $250 hotel rooms (in Anchorage). Last year it was much more common to see them in the $150 to $175 range," Rense said.
A softer travel market combined with falling room rates has meant less revenue to the ACVB. And no one knows yet how this summer's tourism season will turn out, he said.
As a result, the visitors bureau chose to reduce its $6.4 million budget in 2004 to around $6.1 million, Bustamante said. The elimination of four staff positions will go a long way toward meeting that target, he and Rense said.
The jobs that were cut included the vice president of administration position, the director of tourism and two sales managers. The visitors bureau has also decided to stop advertising for a new position, vice president of tourism development and sales. Bustamante said he will handle tourism development with the rest of his duties.
Last year's warm winter also hurt bed-tax revenue because it forced the cancellation of the Tour of Anchorage and the U.S. Alpine Ski Championships and moved the Iditarod start to Fairbanks.
Recent word that the Alaska Federation of Natives is considering dropping Anchorage next year as the site for its annual convention -- the city's largest meeting -- has added to ACVB's worries.
Besides cutting staff, the visitors bureau is giving more attention to the Internet, developing and incorporating electronic marketing strategies and programs that will give it broader reach, Bustamante said.
Some bright spots loom for Anchorage's tourism and convention economy, he said. National travel experts are predicting a slow rise in highway vacation excursions, along with adventure tourism, cultural tourism and family-oriented travel.
The economy is also showing signs of improving, which should spur more leisure activity, including travel, according to Bustamante.
But in the meantime, the visitors bureau is ratcheting back, refocusing its energies and hoping for the best in 2004.
"We're trying to position ourselves for an unpredictable future," Bustamante said.
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(c) 2004, Anchorage Daily News, Alaska. Distributed by Knight Ridder/Tribune Business News.