2001 tourism growth recalculated: It's zero
By Michele Kayal
Advertiser Staff Writer
In a dramatic turnaround that signaled growing pessimism about the months ahead, the Hawaii Tourism Authority yesterday slashed its growth targets to virtually zero, and said even hitting that goal would require aggressive maneuvers.
The board's primary target of visitor spending — set just five months ago at 10.3 percent growth for 2001 — was ratcheted back to 0.4 percent growth, a figure that would bring roughly $11.4 billion to the state this year.
The new target for visitor arrivals is 2.2 percent growth or about 7.1 million for the year. The board said it would lose ground on length of stay and per-person daily spending, setting targets that are below last year's figures.
For Japanese visitors, specifically, the board backed off its target of a 6.2 percent increase in collective spending for 2001 to offer a negative target — a 1.7 percent decline in spending.
"There has been a fundamental change in the economic underpinnings of our assumptions," said David Carey, board vice chairman and chief executive officer of Outrigger Enterprises. "When we did this, the Nasdaq (stock index) was in the sky."
Yesterday's revisions underscore just how gloomy the industry has become in recent weeks, as a wounded stock market, a West Coast energy crisis, a shaky U.S. economy and a falling Japanese yen threaten Hawai'i tour operators, hoteliers and retailers with potential declines of as much as 20 percent.
And reaching the revised targets, authority members and a key vendor said, could require a rejiggering of certain marketing efforts, and potentially, a request for more money from the Legislature.
"The way the economy goes, I'm not really sure these numbers are achievable," said Peter Schall, board member and managing director of Hilton Resorts Hawai'i. "I think it's going to be a tremendous challenge."
The authority's original targets were thought by some tourism executives at the time to be extremely aggressive because they came on the back of an extraordinary year. 2000 brought to Hawai'i a record 6.9 million visitors, who spent $11.2 billion, another record.
The Hawai'i Visitors and Convention Bureau, the authority's marketing agent and the organization responsible for actually hitting the targets, already has begun dipping into money set for marketing efforts at the end of the year, said bureau chief executive Tony Vericella.
The bureau recently moved $975,000 of its November-December promotional budget for the leisure market — or 40 percent of the total for those months — to efforts from April through September, Vericella said. The bureau also moved 53 percent of its November-December budget for corporate meetings and incentives — $120,000 — to earlier in the year.
Additional contingency plans will be considered, including asking the Legislature for more money from the tourism special fund that feeds the authority.
The visitors bureau received $47 million from the authority for the 2001 marketing program, but Vericella said he estimates another $4 million will be needed to make up for the budget shifts and meet the new targets.
Additional money could come by rearranging money being spent by the bureau or the authority, Vericella and some authority members said, in addition to asking Legislature to allocate more money from the tourism fund.
The fund comes from the hotel rooms tax. The amount the authority receives is capped at $61 million, although there is more money in the fund. Only the Legislature can authorize spending money from the fund.
Michele Kayal can be reached by phone at 525-8024 or by e-mail at mkayal@honoluluadvertiser.com.
