Tourism group urges $10 million marketing reinvestment, suggests vehicle-rental tax as funding source
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Summary
The Alaska Travel Industry Association told the House Finance Committee the state's tourism marketing budget has fallen to $2.5 million and asked lawmakers to reinvest vehicle-rental tax revenue (about $15 million total, of which ATIA said 70% comes from out‑of‑state visitors) to restore a $10 million FY27 marketing program.
The Alaska Travel Industry Association asked the House Finance Committee on Feb. 5 to restore state marketing funding to support visitor-driven revenue and keep Alaska competitive in a crowded tourism market. Jillian Simpson, ATIA president and CEO, said the organization is operating on a $2.5 million budget for the current fiscal year and that the governor's proposed FY27 budget includes $0 for tourism marketing.
Simpson urged lawmakers to consider reinvesting a portion of the vehicle-rental tax to fund marketing: ATIA estimates the total vehicle rental tax receipts are about $15 million annually and said roughly 70% of that revenue comes from out-of-state visitors. "A reinvestment of that 70% is $10 million," Simpson said, presenting the association's FY27 ask.
ATIA described its marketing strategy as digitally focused and data-driven. Simpson said ATIA uses market-potential modeling, hometown/behavioral targeting and an ad-effectiveness study to prioritize markets and that the organization has shifted investments to channels that deliver the highest ROI. She detailed ATIA's work as the official destination marketing organization through a memorandum with DCCED and said the goal is to increase visitation, length of stay and visitor spend to boost state revenue.
Committee members pressed for specifics, including the statutory authority to appropriate vehicle-rental-tax revenue. Representative Biden cited AS 43.52.080 as the statute that authorizes appropriation of the vehicle-rental-tax for tourism marketing; Simpson confirmed the $15 million figure represents total collections and includes resident-paid rentals. Several legislators asked about market trends and geographic distribution of visitors; Simpson said Alaska welcomed about 3 million visitors in recent years and that 40% of visitors were cruise passengers and 60% independent travelers.
The committee heard that state marketing funding historically ranged much higher (she cited a prior state investment of about $16 million and an average state marketing spend of roughly $22.4 million in other states). Simpson told the committee that cuts to marketing risk reduced market share and that putting the state's name back in the market is critical if visitor demand softens nationally.
Next steps: ATIA sought legislative consideration of a $10 million FY27 appropriation and recommended reinvesting a portion of vehicle-rental-tax receipts; lawmakers asked staff to consider statutory options and budget language during further deliberations.