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A richer Iditarod

Iditarod_2013_(8572097753)

Iditarod finish line in Nome/Wikimedia Commons

The rumored $1 million dollar Iditarod reached Nome earlier this month.

 

No, it wasn’t the dog sled race. It was a Chinese tour, which some along the Iditarod Trail nicknamed the “Million Dollar Chinese Tour.”

Is this part of Alaska’s economic future?

Actual costs and profits for the trip are unknown. It was put together by Seward-based Seavey’s Ididaride. A family owned business, Ididaride has grown to become the biggest sled dog operation in Alaska and possibly in the world.

Now managed by Danny Seavey, it includes in its team Mitch Seavey, Danny’s father; and Danny’s brother, Dallas. At age 57, Mitch – already the oldest mush ever to win the Iditarod Trail Sled Dog Race – pushed the age barrier out there a little farther this year when he notched victory number three. It left him one victory shy of the string of four put together by Dallas.

The two Seaveys combined have won the past six Iditarods and finished first and second in three straight races in an amazing display of sled-dog dominance while the rest of the family has taken the lead in Alaska winter tourism in a very big way.

The big dream

The 49th state has been talking about winter tourism for decades, and the numbers of visitors have crept upward over time. But they remain tiny.

According to the 2014-15 Alaska visitor statistic report – the latest prepared for the Alaska Department of  Commerce, Community and Economic Development –  286,800 tourists – or about 41,000 a month – came north between the start of October and the end of November two winters ago.

That isn’t even equal to an average week in the Alaska summer when close to 2 million tourists invade the state. More tourists visit Alaska on any four days in summer than come in the average month in winter.

And that comparison is based on a May 1 to September 30 tourist season, which includes those “shoulder season” months of May and September. Granted, they can be the best months to be in Alaska, but they are not the most attractive to tourists.

June, July and August are the busy months when most of the tourists arrive. A lot of Alaska businesses depend on a large volume of tourists appearing in this small window of time to spend a little money each.

This is one way to make money, but it isn’t the only way.

E&J Gallo Winery and Domaine de la Romanee Conti are both highly successful and profitable companies.

Gallo sells about  75 million cases of wine very year.  Most of its sales are what have been termed “basement wines” – Boone’s Farm, Andre and Thunderbird – and “bottom shelf” wines – “Barefoot, Red Bicyclette, and Turning Leaf.”

Romanee Conti sells 5,000 to 6,000 cases per year, less than one-thousandeth of a percent of what Gallo sells. But it’s all premium wine. The company’s cheapest wines cost $400.  Prices only go up from there. The DRC 2013 “Romanee Conti” from the company’s namesake vineyard is at the moment going for $7,500 a bottle and up even though it’s not yet ready to drink. Oenophile’s suggest cellaring it for at least a decade before drinking to taste the wine at its best.

The point here is simple: You can make good money selling a large volume of a decent product, or you can make good money selling a small volume of a premium product.

Some Alaska wilderness lodges hit on the latter idea years ago, but the Seaveys have taken it to a new level with a new and potentially profitable clientele. The latter would appear vital to make this sort of tourism work.

Soft tourism, deep pockets

Given the extremes of winter in Alaska,  the average tourist simply isn’t equipped to physically and psychologically deal with average conditions in the way someone living in McGrath on the Kuskokwim River or Ruby on the Yukon River has learned.

As Janine Seavey, Mitch’s wife, noted on the Iditaride Facebook page on March 9, “Danny and Conway are leading an expedition of Chinese tourists. They departed home almost two weeks ago and will meet up with us in Nome five days from now. Two of the days during their tour have reached temperatures of minus 50 degrees and another day was minus 40. Propane is the source of heat for the tents they sleep in.

“Unfortunately, propane doesn’t vaporize below minus 43. Despite the challenging weather this tour group is experiencing they seem to be reveling in this unique Alaskan experience.”

If those Chinese tourists truly were reveling in the experience of life on the trail at 50-degrees-below-zero, and there’s no reason to believe they weren’t, Danny, Conway (another of Mitch’s sons) and their crew were doing some serious mollycoddling.

And that is something a business can only afford to do for high-end clients. The numbers just don’t pencil any other way.

“In Lavish Style, Entourage of Chinese Tourists and Crew Runs Its Own “Iditarod,” is how KNOM radio in Nome summarized the Danny led trip. 

“These first-time mushers had been aided in their run by a large entourage of traveling trail staff with a bevy of specialized gear to match,” wrote Tyler Stup. “Most of the tourists had never seen snow before embarking on the trip….both the timing of this trip and the lavish scale of the accommodations requested by its participants made the journey exceptional.”

One person’s lavish is, however, another person’s minimal. Fifty-degree-below zero temperatures are quite simply brutal. Ididaride needed to be prepared to deal with that.

The new model

“We set up 17 tents every time we stopped,” Danny told KNOM. “Each guest had their own, 10-by-12 Arctic oven. (There was a) huge dining hall tent. We had a lot of local staff, and we had some great folks on each individual stretch of the trail.”

Arctic Oven tents of that size retail for about $2,000 each. Then there’s the propane to heat them, and the $10,000 to $15,000 snowmachines with sleds to tow the tents and the propane, and the food and extra gear hauled along the trail, and all the babysitters and the costs to pay villagers who helped out in the few communities on the route.

“The mushers’ entourage included a team of roughly 30 people, consisting of translators, chefs, equipment haulers, film crew, and pilots,” Stup wrote.

All those people need to be paid. Start doing the math and just the cost of launching this expedition easily climbs into serious six figures. The cost, even if Seavey’s Ididaride did nothing more than break even, quickly becomes so high as to price the trip out of the range of the average tourist.

This is the big problem winter tourism – outside of convention gatherings in Anchorage and Fairbanks – faces  in the 49th state. In the first place, you need to see that people avoid injury; frostbite comes easy at 50-below. In the second place, you need to see that people survive; extreme-cold temperatures are life threatening.

And then on top of that – if you want the tourists to have a good experience instead of the one that only makes them want to go home and badmouth your business – you have to ensure that they are at least tolerably comfortable.

Put all of that together and “lavish” can become a synonym for “necessary.” And that drives up the overhead.

Business would be a lot easier if the  average, Alaska winter tourist was Iditarod Trail Invitational legend Tim Hewitt, but he (or she) isn’t. And after this winter of global cooling, even Hewitt is talking about how he might be done with Alaska in winter.

The average tourist doesn’t really want true adventure. True adventure tends toward uncomfortable. See the stories of Ernest Shackleton and the voyage of the Endurance, or the late Bradford Washington and Mount Lucania here in Alaska in the late 1930s.

The average tourist wants the appearance of true adventure without all of the suffering. Anyone who has done any real adventuring in the north knows what the author is talking about.

There is always some part of true adventure that becomes a sufferfest. The average tourist doesn’t want that.

The average tourists wants something along the lines of what Iditaride put together. The problem is what it put together is beyond the financial reach of the average tourist. But not all tourists are average.

There is a high-end clientele out there, and it is not limited to just the Chinese. Alice Rogoff, the wife of billionaire businessman David Rubenstein and now the owner of the state’s largest newspaper, was a tourist when she first came to the state in 2002 to follow the Iditarod. 

Rogoff spent a lot of money as a visitor to the north in the years that followed. She has spent even more since making the decision to get into the newspaper business.

There are others like her out there, and possibly a lot of others like her among the new elite in China.

“The Chinese … are the perfect business because they like to stay for a long time; they also like to spend a lot of money,” Mike Baird, the premier for New South Wales, Australia told a business forum in that country last fall.

Over a million Chinese tourists now journey to Australia ever year, according to News.com.au, and the number is projected to grow to 3 million with a decade.

Alaska winter tourism is never going to become big in terms of bodies, but if it can figure out how to tap the high-end tourism market and latch onto the American and Chinese elite, it could become big in terms of money

The Idit-a-leading Seaveys might be onto something here.

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2 replies »

  1. Killing hibernating bears and wolf pups is not greeted with joy by any Alaskan I know. It also happens to be illegal. Animal abuse is routine? Where is that? No place in Alaska I’ve ever been. Animal abuse is also illegal in Alaska. You’re out to lunch Mr. Korn.

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  2. “The Idit-a-leading Seaveys” will probably have many Idit-a-followers copying its tour model. The newbies may have lower prices and offer unique options. Think of a tour with a former fashion model who’s also an Iditarod musher. Pretty sexy!

    As with most things in life, there’s always at least one negative. When tour prices decline as a result of competition, the average rich person could probably afford to go. So who takes the resulting hit in the pocketbook? Why pay to be an Iditarider for 11 miles when you could do the whole trip on a sled with ancillary help? Why pay for a plane to take you from checkpoint to checkpoint when you can do the Idit-a-tour-with-lots-of-help? And, let’s not forget that those planes have crashed.

    They’ll call it Sled Dog Tour Fever (a take-off on gold fever). Of course, all of this will turn Alaska into even more of a hell hole for dogs. But, hey, it’s Alaska, where men are men and animal abuse is routine. Heck, even killing hibernating bears and wolf pups is greeted with joy. it means more moose and people coming to kill them. Tourist dollars! Goldfinger. He loves only gold….

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