SPECIAL REPORT

Survey says: Passengers don't know shops pay promotional fees

By JENNIFER COLLINS
When an Oakland woman attended a lecture aboard her cruise ship about “recommended” shops in Skagway, she said she did not know the businesses paid for the exposure.
“She never said it was a paid-for promotion,” Evonne Yfantis said of the port lecturer named Vicki aboard Royal Caribbean’s Rhapsody of the Seas.
Yfantis is not alone.
According to a poll by the Skagway News, approximately 76.4 percent of passengers who had a “recommended” shopping brochure and/or viewed a port lecture checked “no” or “don’t know” when asked whether shops paid for the promotion.
The shops do, in fact, pay for the promotion in brochures and at video taped lectures. The lectures are then aired on televisions in each passenger’s cabin. “Recommended shopping” brochures and lectures list information about businesses who paid promotional fees to be included.
“People are very influenced by what they hear on board,” said Skagwayan Allison Wilson, who worked aboard a Princess cruise ship for 10 years and sold shore excursions in Alaska until 1994. “I fought against it on board. There’s no discrimination. They don’t pick the best stores. They pick the stores that will pay the money.”
A 1994 Alaska state statute reads cruise ships must “clearly and fully disclose” so a “reasonable person” can determine the recommendation is paid, Assistant Attorney General Ed Sniffen said.
Yfantis said she and the other passengers suspected links between the cruise lines and the merchants but were unsure.
“We were all saying that the ships must have part ownership of the shops in town,” Yfantis joked. “One guy saw her outside a shop and told her to go collect her commission.”
More than 85 percent of Royal Caribbean passengers who had a shopping brochure and/or viewed the port lecture, marked “no” or “don’t know,” when asked if merchants paid for the promotion. Norwegian Cruise Line, however, had the highest of those who marked “no” or “don’t know” — 87.8 percent.
When asked to explain how they knew, one Royal Caribbean passenger wrote, “They said they don’t.”
Another Royal Caribbean passenger wrote, “It’s supposed to be a courtesy service.”
“The shops we’ve been in that were on our guide were wonderful,” one Holland America passenger said emphatically. “And others, we’ve just walked right past.”
The passenger marked “don’t know” when asked if the shops paid to be promoted.
“It is in the script,” said Al Parrish, vice president of government and community relations for Holland America Line Westours Inc. “I don’t know what else we can do.”
More than 74 percent of Holland America passengers who had a brochure or attended the lecture marked “no” or “don’t know” on the survey.
But Sea Princess shopping guide Tony Fletcher said he informs passengers in the introduction of his lecture that the promotion is paid. Fletcher said he does the first day at sea.
Princess brochures also state on the included town map that the promotion is paid.
More than 31 percent of Princess passengers who took the survey marked the program was paid. However, Celebrity Cruises passengers appeared to be the most informed with 37.5 percent marking the program was paid, according to the survey.
Royal Caribbean brochures state in the fine print under the heading “Guarantee,” – “All merchants have been carefully selected and have paid a promotional fee to Onboard Media for inclusion in the program.”

A porthole view from the tug Le Cheval Rouge during ship escorts on a summer morning in the Skagway harbor. DL

Onboard Media, a Florida-based company, is contracted by the major cruise lines to present shopping lectures and publish shopping brochures, Fletcher said.
Onboard Media representative David Mardini said each store provides a script and sample merchandise for the lecture portion and is included in a brochure.
Owner of Ketchikan’s Scanlon gallery, Marlene Scanlon, said she’s been with the program for four or five years.
“As far as I’m concerned, it’s paid advertising,” Scanlon said. “The big thing is it makes people believe it was good shopping in Alaska.”
Scanlon said she couldn’t say how much she paid for the program.
“If anyone tells you, they’re jeopardizing their contract because we sign a contract that’s between us and them,” Scanlon said.
The manager of Distinctive Gemstones in Skagway, Cara Cosgrove, said an Onboard Media representative estimated the program would cost the store $20,000 per year.
She and owner Randy Shumate elected not to participate because they said they felt the advertising program was discriminatory.
“It only works if only a few people participate,” Shumate said. “And then they (Onboard personnel) stay away from the other people.”
Mardini said stores are charged a flat rate for advertising in the shopping brochure. After some time in the shopping brochure, Onboard calculates a projected increased revenue for stores on the lecture program. The rate is different for each store, depending on how much each store earns.
“We don’t gouge people like in the Caribbean,” Mardini said.
Keller’s owner and participant in the program Steve Reeder advertises in the shopping brochure and port lecture on the major cruise lines.
“The more you pay, the more exposure you get,” Reeder said.
He wouldn’t share how much he pays for the program.
Eileen Hunter at Hunter’s Gallery said she would not get any cruise ship business were it not for advertising on the program.
“We are above the bus stop on our street,” Hunter said of her gallery on Broadway between Seventh and Eighth Avenue. “Unless there’s some way to advertise on the cruise ship, we don’t get any cruise ship passengers.”
Hunter said she thinks of the program as advertising dollars well spent.
“I feel like I’ve hired a sales force of 20 to sell my shop,” Hunter said.
Skagway Chamber of Commerce gathered Sept. 7 to discuss forming a merchant’s association and ways to promote shopping in Skagway as a whole.
At the meeting, Lynch and Kennedy owner Rosemary Libert said she worried if stores stopped advertising aboard the cruise ships, Skagway would not be promoted as a shopping destination.
“They’re not gonna recommend shopping in Skagway if there’s no money in it for them,” she said.
Libert, who has been on the program for the summer, recently went off it to see if she loses business.
Libert said she participated in the program to compete with stores on the program in Ketchikan and Sitka.
“It has made Skagway a shopping destination,” Reeder said. “It’s truly benefiting everyone.”
Taiya River Jewelry owner Casey McBride said he opposes the shopping lecture program, because it singles out only the big stores who can afford the high commissions.
“This year all the cruise ships are doing it,” he said. “It’s been my best year. Maybe they’re pushing Skagway.”
Skagway City Manager Bob Ward said some version of the port lecture program has existed for 10 years.
In 1998, Ward wrote a letter to the Norwegian Cruise Line opposing the program, expressing citizen concerns that the program was misleading due to its assertion that the shops had “been carefully selected on the basis of quality and fair dealing.”
The assertion implied that an exhaustive survey had been taken and the best shops selected, Ward wrote. Thus, the shops not on the program sold merchandise of inferior quality.
“We both know that this is not the case,” he wrote.
The cruise ships pulled the program in Skagway, Ward said.
“The ships were actually dissing Skagway and saying that people should shop in other towns where people were participating in the program,” Ward said he heard.
But Mardini said Onboard lectures are not negative.
“We don’t tell people not to shop in stores if they’re not in the program,” he said.
Hunter agreed.
In her contract, Hunter said she was not allowed to say anything negative about another shop.
Wilson also said she doubted that cruise personal dissuaded passengers from shopping in Skagway.
“I never heard them say anything negative on board the ship,” she said. “Just, ‘This is our product. This is what we know.’”
Following complaints from Skagway businesses who wished to participate, Ward wrote a letter to North West Cruiseship Association president John Hansen.
“Neither at the time of our original objection, nor at present has the City of Skagway ever suggested, nor do we have the right or authority to limit the advertising opportunities of private businesses,” Ward wrote.
The program was reinstated in Skagway without resolution of initial citizen concerns.
“We haven’t set out any sort of guidelines,” Hansen said. “It’s between (up to) the individual company.”
At the special legislative session this summer, Sen. Rick Halford said he objected to the cruise port lectures and planned to back legislation to control it, according to a report by the Juneau Empire.
“It’s part of a package of dealing with the industry,” he said when he spoke with the Skagway News recently.
Skagway News polled 410 people on Aug. 16 and 21 and Sept. 5, all heavy ship days. Of the people who claimed they had a shopping brochure and/or viewed the shopping lecture, 61 were aboard a Royal Caribbean ship, 64 were aboard a Princess ship, 24 were aboard a Celebrity ship, 47 were aboard a Holland America ship and 41 were aboard a Norwegian Cruise ship. Four surveys were excluded from the total due to incomplete answers.