Tourism Authority may seek emergency funds for marketing
By Michele Kayal and Andrew Gomes
Advertiser Staff Writers
Tourism officials say they will consider petitioning the Legislature for millions in emergency marketing money if the economic downturn continues to sap the state's No. 1 industry this year.
The Hawaii Tourism Authority, which receives $61 million a year in tax money, will soon undergo the first financial and management audits in its three-year history. Accounting firm KPMG has been hired to review the board's books for 1999, 2000 and 2001, said the authority's chief administrative officer, Lloyd Unebasami. He said he expects the audits to be completed by November. State auditor Marion Higa also will review the authority's contract compliance, operations and other management issues. Lawmakers pounded on the authority throughout the legislative session that ended last month to justify its budgets and operations, and ultimately passed a measure requiring the audit.
"We respect the fact that the governor and the Legislature feel $61 million is enough, but we are in an emergency with this downturn," said Keith Vieira, Hawai'i operations director for Starwood Hotels and Resorts Worldwide and a member of the policy-setting Hawai'i Tourism Authority. "We need emergency funding."
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HTA audit
The move comes as figures released yesterday by the Department of Business, Economic Development and Tourism showed that longer stays by visitors to Hawai'i in April couldn't completely offset declines in arrivals as the total number of visitor days slacked 0.8 percent.
It was the third month in a row that the key measure of the visitor industry shrank. Total visitor days for the first four months of the year are down 1 percent compared to the same period last year.
The Hawai'i Tourism Authority has approval from the Legislature to spend $61 million each year from the tourism special fund, where a portion of the state's hotel-room taxes are deposited. But the fund contains more than $61 million, and it is a portion of this "above the cap" money that Vieira said board members could ask to spend to try to boost tourism.
The Legislature does not reconvene until January, however, so any extra money would apply only to 2002. (A special session next week isn't expected to cover the issue.) Vieira said the Hawaii Visitors & Convention Bureau, hired by the authority as the state's marketing arm, has already worked up an emergency marketing plan based on a request for $5 million.
"The feeling is this year is not turning around," he said. "If there are trends showing next year is very good, we won't have to do that."
To deal with the downturn, the visitors bureau has taken several steps, including transferring about $850,000 out of longer-term programs to target people who may travel to Hawai'i immediately. The bureau has also pulled together $1 million from private industry to supplement its $10 million marketing budget in Japan.
Meanwhile, the authority approved its $61 million budget for fiscal 2002, which begins July 1. The group's budget committee also recommended that some financing be rearranged to provide an additional $1 million for marketing to the meetings and conventions market. If the recommendation is adopted by the full board, the bureau will be given $7 million in 2002 for the meetings market, in addition to the $39 million it receives for the leisure market according to terms of its three-year contract.
While yesterday's visitor arrival figures showed a drop, the 558,253 visitors to the Islands last month still represented the second strongest April for arrivals, behind April 2000.
The decrease in total visitor days last month also showed a slowing of the recent trend. Visitor days dropped 5.8 percent in February and 1.5 percent in March after a 3.9 percent gain in January.
Last month's 0.8 percent drop in visitor days was the result of a 2.4 percent decline in total arrivals combined with an 8.59-day average length of stay, which was up from 8.45 days a year ago.
Though 7.5 percent fewer Japanese visitors came, they stayed longer — 6.39 days last month compared to 5.52 days in April 2000. That resulted in an overall 7.0 percent increase in Japanese visitor days.
The number of Mainland travelers increased 1.7 percent, but shorter stays resulted in flat total visitor days.
By island, visits in April were down 10.7 percent on Kaua'i, 7.8 percent on the Big Island, 7.0 percent on Lana'i, 4.3 percent on O'ahu and 1.5 percent on Maui. On Moloka'i there was a 1.7 percent increase.
The drops affected April hotel occupancy, which fell to 69.9 percent statewide from 73.9 percent in April 2000, according to preliminary data.
