Signs have been taken down, furniture moved out and the doors shut on Alaska Ferry Adventures and Tours. As of Oct. 31, the 27-year-old business has closed for good.
General manager Pat Merrill, 60, said she’s retired, but of the other seven employees, “They all went to the unemployment line, unfortunately.”
The company rented office and parking space from the city of Homer on the Homer Spit across from the ferry terminal. That will mean a loss of $14,000 in rent, said Homer City Manager Walt Wrede.
“The big thing from my perspective is the eight jobs,” Wrede said. “That hurts. This is a locally grown business. It was pretty successful. It kept people working and provided service.”
Last month, the Alaska Marine Highway System, or AMHS, announced it would no longer pay travel agents a 10-percent commission on bookings for Alaskans making reservations on the state ferry within Alaska.
Merrill and company founder Phil Morris said that would be a loss of about $100,000 and would make it difficult to keep operating. Travel agents still would receive commissions on bookings made for non-Alaska travelers and for all out-of-state travel.
Merrill said she had hoped the AMHS would back off from its decision on not paying some commissions. The decision had been made by Capt. John Falvey Jr., AMHS general manager, and Richard Leary, business enterprise and development manager, Merrill said.
Merrill talked to Alaska Department of Transportation and Public Facilities Deputy Commissioner Reuben Yost about the decision by division managers, and she said Yost told her he supported their decision not to pay in-state commissions.
“They would not give us any leeway, so we said, ‘OK, that gives us no other choice,’” Merrill said.
Rep. Paul Seaton, R-Alaska, said he tried to work with the ferry system to make things reasonable for travel agents and be sure AMHS understood the impact of its decision.
“I was really disappointed,” he said of Alaska Ferry Adventures closing. “I was giving them (AMHS) my assessment from the ground here and giving them the numbers and making sure they understood the potential consequences of that action.”
The ferry system ended commissions for Alaskan-made bookings because of a $3.5 million cut in funding to the AMHS by the Alaska Legislature. The ferry system had to find efficiencies, said Jeremy Woodrow, a communications officer with the AMHS.
He said AMHS was disappointed to hear Alaska Ferry Adventures had closed.
“The travel agency was a valuable partner in booking AMHS travel to Alaska visitors,” he said. “The department appreciates the business relationship that it shared with Alaska Ferry Adventures and wishes the best in future success to the staff and owners of the travel agency.”
Woodrow said from DOT&PF’s perspective, the decision for Alaska Ferry Adventures to close seems to be a business decision independent of its commission sales change. He said in 2012 sales to Alaska residents made up about 15 percent of Alaska Ferry Adventures sales and had declined each year.
“Given that AMHS bookings only accounted for a portion of the agency’s profits, it’s difficult to understand how the policy change was the only reason for the business to close,” Woodrow said.
The company started out as the Homer Ferry Terminal and for a while had a contract with the state to run ferry terminal operations in Homer. After that contract ended, it expanded into a ferry and tour booking agency, changing its name to Alaska Ferry Adventures and Tours. Merrill, who started with the company in 1998, said a former AMHS marketing manager told her there was a need for a company to sell ferry tours — travel adventures that would include overnight stays and land tours in marine highway communities.
“That’s what’s so ironic about the whole thing,” Merrill said.
Alaska Ferry Adventures and Tours also helped travelers book side tours and stays. That brought in tourism-related sales to the Kenai Peninsula and elsewhere in the state. For peninsula companies, that was $150,000 in sales, $175,000 for Juneau companies and $125,000 for Skagway companies.
Another company affected by the commission change is Viking Travel in Petersburg. Owner Dave Berg said Viking Travel will see a loss in commissions but isn’t closing.
A Vancouver, B.C., company, Ferry Travel Gateway, books travel for many ferry companies, including the AMHS. Since its clients usually aren’t Alaskans, the commission change won’t affect it, said owner Kirsty Gladwell. Still, she sympathized with the Homer company.
“For them to allow Alaska Ferry Adventures to close its door is appalling,” Gladwell said.
Seaton questioned if the AMHS would save any money by not paying commissions for travel by Alaskans.
“It seemed disparate to everything else we were doing,” Seaton said. “Now we will have to be replacing the private system with state workers.”
Berg said travel agents like Viking Travel supplement the AMHS Internet service.
“There are a lot of people who don’t understand the way the system works or have extra questions,” Berg said. “We have taken a lot of weight off the reservations office.”
With Alaska Ferry Adventures closing, Homer will lose other services, Merrill said, such as long-term parking for travelers and loading unaccompanied vehicles.
Wrede said the city has inspected the empty building and is assessing what to do with it. It could use it for city needs or rent it. Part of the building is used for city equipment, but it has an upstairs space that’s not Americans with Disabilities Act accessible. Wrede said if the city leases the building, it will put out a request for proposals.
Merrill said she and coworker Martie Krohn are closing down the business out of a temporary office at the Kachemak City community center on East End Road. They are open 9 a.m.-3 p.m. Monday-Friday. People interested in hiring laid-off workers can call her at 235-7009.
Furniture and office equipment was donated to South Peninsula Haven House, Merrill said.
“No matter what, we did a wonderful job,” Merrill said. “That’s something to stand up for and be proud of. We did it right and we did it well.”
Michael Armstrong can be reached at firstname.lastname@example.org.