Funding. Huna Totem initially funded the majority of its startup expenses for the cannery acquisition and the business plan development through its savings and the liquidation of other assets. In 2003, the company secured a long term loan from Alaska Pacific Bank with the assistance of the Alaska Industrial Development and Export Authority and with loan guarantees from the Bureau of Indian Affairs. This investment provided the final funds needed to finish construction as well as the initial operating capital.
With no cruise ship industry financing, Huna Totem has been able to make independent choices such as local hire preference. The company broke even in 2006 after two years of operation, and expects to turn a moderate profit in 2007.
Marketing. Huna Totem planned their business operations carefully, developing professional marketing materials targeted to the cruise industry. The company does not advertise directly to the visitor, but sells the Huna Totem product to the cruise companies. If a cruise company decides to stop in Hoonah, it advertises directly to customers. Huna Totem continues this marketing strategy, but is quickly approaching maximum capacity.
Huna Totem prepares and issues several press releases a year to attract the interest of cruise companies. The press release on the opening of the zip line made newspapers and television news across the country and generated more than 1,000 hits on youtube.com. National Geographic also ran a two-page article.
The company develops and distributes collateral materials featuring each of the 11 excursions offered at Icy Strait. Visitors can easily participate in more than one activity on a single visit to the facility.
Challenges and Lessons Learned
Bob Wysocki, Huna Totem’s CEO, stressed the importance of community buy-in to success in the visitor industry. Visitors want to interact with local people; how residents respond to visitors is as critical to the quality of the visit as the engaging character of the tour guide who greets them at the dock. Local Hoonah people want visitors to have a positive experience in their community, so the company limits the number of ships to one a day for the benefit of both visitor and resident.
Wysocki also attributes the tour destination’s success to starting slowly and growing gradually, while making a concerted effort to hire local residents. Many residents are also village corporation shareholders, so local hire has been a strong underpinning of the enterprise from the beginning. Seasonal summer employment is ideal for Hoonah residents, since they engage in hunting, fishing and other subsistence activities in the spring and fall.
Wysocki also stressed the importance of involving people with several years of cruise industry experience to help plan and market the business. Understanding how the cruise industry works is critical in this line of business. In conclusion, he reflected it was impossible to over-plan for such a complex business.