kotzebue_Eco_Devo_Internet

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Kotzebue, Alaska Tourism as a Tool for Rural Economic Development

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Good news: Many jobs, Growth in jobs, Jobs in places like rural AK where options are few, fiscal benefits/"subsidies" for services enjoyed by residents Bad news: Most jobs seasonal, Some jobs pay less than other industries © Alaska Division of Tourism Economic Impacts of Tourism (the good news, the bad news)

Most Significant Factor : 

Most Significant Factor Market forces (supply and demand): Wild and scenic places decreasing, increasing the value of those that remain. We have an increasingly scarce commodity which will continue to drive up its value and desirability. © R. Valentine, Alaska Division of Tourism © Alaska Division of Tourism

Tourism as Sustainable Development : 

Tourism as Sustainable Development Tourism can be more than a simple money-making venture. Can strengthen conservation efforts Play a role in maintaining healthy communities.

Strong Historic Growth : 

22% Growth Source: AVSP Strong Historic Growth

Growth Exceeds U.S. Averages : 

Total Visitation U.S. Average Annual Travel Volume Increase 3.75% 1995 - 1999 Alaska Average Annual Visitor Volume Increase 5.5% Source: AVSP & TIA Growth Exceeds U.S. Averages

Cruise Industry Drives Growth : 

Source: AVSP Cruise Industry Drives Growth

Summer Visitor Arrivals : 

Summer Visitor Arrivals

Alaska Cruise Visitor Growth : 

Exceeds North American Averages Cruise Visitation North American Cruise Average Annual Passenger Growth 15.3% 8.6% Alaska Average Annual Summer Visitor Growth Source: AVSP & CLIA 1995 - 1999 Alaska Cruise Visitor Growth

Non-Cruise Annual Growth : 

1995 - 1999 2.1% 45% Below U.S. Average Source: AVSP & CLIA Non-Cruise Annual Growth

Market Realities : 

Non-Cruise segment possesses limited marketing dollars (it is more cruise-dependent than many realize) Cruise industry acts as an important catalyst (similar to theme parks, casinos) Cruise industry becoming increasingly competitive Minimal “visitor taxing” mechanisms limit marketing revenue generation capabilities Many non-cruise businesses offer the greatest potential for enhancing economic growth in rural areas in those areas that possess the intrinsic characteristics of viable tourism destinations Market Realities

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Decide which benefits you can provide. In addition to identifying the ideal customer, it is also important to understand travel trends and the needs of your particular customer. Customer Identification

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While the growth in the number of tourism related businesses in Alaska is impressive, the supply of many such operations has likely grown more rapidly than demand. Market Cycle

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This is our target customer This is our product To whom do wesell it and how? What product development do we need? Recommended Approach Traditional tourism approach Strategic tourism approach

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Assess your product and match with desired needs. Once you have identified visitor needs, decide how your product can fill those needs. Conduct a thorough assessment of the products and services you will offer. Product Identification

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”Media Planning is taking on additional strategic importance as marketers seek to increase the long odds that a potential customer – busy with life and bored by most ads – will pay attention to a sales pitch, particularly when many products are aimed at narrow demographic groups rather than mass audiences.” Source: New York Times; July 26, 2000 General Motors Cast Study

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If those with seemingly unlimited marketing resources are finding they can no longer effectively motivate broad markets, what are the chances that those with limited resources will be successful if they are attempting to compete with broad market strategies? Source: Nichols Gilstrap, Inc. Obvious Question

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Newspaper travel section 28% Internet Web site 21% Travel show on television or cable 21% Motor Club Magazine, such as AAA 18% Consumer lifestyle magazines 17% Source: TIA Travel Poll – June 2000 Travel Media Useage

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The # Americans with Internet access grew in 2000 but at a slower pace. More than 101 million online consumers in the U.S. The vast majority (89%) of online Americans traveled at least once in the past year. About 90 million online travelers in the U.S., or 45% of adults. Use of Internet Among US Travelers

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None Travelers (1 or more trips) Infrequent Travelers (1-4 trips) Frequent Travelers (5+ trips) 11% 89% 45% 44% # of Trips Taken in Past Year Among Internet Users

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Number of online travelers grown 233% from just 28 million in 1996. Internet use among travelers increased from 19% in 1996 to 61% in 2000. Incidence of Internet use among travelers is higher than among U.S. adults (50%). Pleasure travelers’ Internet usage mirrors that of all U.S. travelers, business travelers more likely Internet users(76% vs. 61%). Use of Internet Increasing

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© Neil Johannsen, Alaska Division of Tourism About half (51%) of online travelers used the Internet for two years or less. Frequent (5+ trips per year) and business travelers more likely to have more than two years’ experience online. Most online travelers (77%) spend no more than 10 hours online in an average week. Internet Use Patterns

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Online travelers more likely to be: under the age of 55, annual household income above $75,000, college-educated, and work in a professional/managerial occupation. But Internet access to broader demographic base of travelers. Since 1999, demographics shifted to include younger, less affluent online travelers. Demographic profile of online travelers differs from that of the average U.S. traveler. Internet Traveler Demographics

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Two thirds (66%, 59 million) of online travelers say they consult the Internet to get information on destinations or to check prices or schedules. Only about 3 million online travel planners in 1996, so use virtually exploded. Currently, 34% of online travelers say they do not use the Internet to get information on destinations or to check prices. Use of Internet for Travel Planning

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Search engine sites are used by (77%) online travel planners. These websites are among the first online travelers visit when planning trips. After search engines, company-owned websites (airlines, hotels, etc.) and destination websites (63%, respectively) are the most-often visited. About half of online travel planners (52%) use online travel agencies such as Microsoft Expedia, Travelocity, Priceline.com. Search Engines

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Over 59 million online travelers use the Internet to plan travel, about 25 million online planners (42%) purchase or reserve travel products/services online. This includes booking airline ticket, hotel room, rental car or package tour. Number of travelers purchasing travel products or services online has grown 64% from 15.1 million in 1999. On Line Booking

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Most booked travel online have purchased airline tickets via the Internet (82%). Many reserved a hotel room (60%), Just under half (46%) made rental car reservations. travel packages that include transportation and lodging in one price (15%). On average, spent about $1,600 online. E-Commerce

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Treat the Internet as a Tool, Not a Mission Make the Web a Dynamic Part of an Effective Mix Design Your Site with the Ultimate Customer in Mind “Build it and they will Come” Approaches Don’t work Remember Customer Retention is More Profitable than Acquisition Guarantee a Safe Environment Embrace and Manage Change Source: Nichols Gilstrap, Inc. Magnificent Seven

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# Inquiries Source: Travel Montana (Montana hosts45-percent more individual user sessions per month than Alaska) Increasing Role of Internet in Montana Tourism

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Source: Effectiveness of the 1999 California Tourism Fulfillment Campaign, April 2000 Learning About DMO Through Internet California Tourism

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“A five-percent increase in good customer retention can increase profitability by twenty-five to eighty-five percent.” Source: Harvard Business Journal Importance of Repeat Business

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You will protect sensitive information and transactions You won’t send/give them what they don’t want You won’t let others send/give them what they don’t want Customers Want to Know

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Static information-brochures Periodically updated information Virtual “conversations” E-Commerce Types of Websites

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Assess your resources Start small and build up Build a site that matches your maintenance resources Keep information fresh and current Which Type of Site is for You?

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It is easy for “surfers” as well as sites to get lost on the web. Portals and links can work for you to drive traffic to your sight. Links help keep information current because someone else is maintaining the content--so select links carefully. Portals and Links

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Website of small and rural cultural and eco-tourism companies across Alaska to make more effective and economic. Assistance encourages participation in a fast-growing segment of the travel industry and that holds promise as a desirable and sustainable component of arctic economies. Eco / Cultural Tourism Portal

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Information on history, culture, landscape, and artistic life via agreements with the Alaska State Council on the Arts and the Alaska Native Heritage Center. Sustainable Development

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“Is there a store that sells fishing licenses and last minute groceries in a certain town with less than one hundred residents?” “Is it possible to charter a plane out of this village?” or “What is the local sales tax rate?” Includes comprehensive community database for questions such as: Sustainable Development

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www.awrta.org

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www.awrta.org

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www.awrta.org

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www.aksca.org

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www.awrta.org

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www.awrta.org

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Our office offers technical assistance as you start or expand your business. Please feel free to contact us anytime. Phone: 907 465-2012 Email: GoNorth@dced.state.ak.us Website: http://www.dced.state.ak.us/tourism/ Technical Assistance