Tourism Authority facing budget shortfall

By Michele Kayal
Advertiser Staff Writer

As the state struggles to overcome the economic fallout of Sept. 11, tourism executives could find themselves with a shortfall of a little more than $2 million, but officials say they are not panicking yet.

The Council on Revenues has projected that hotel tax collections will be less than expected for fiscal 2002, at $155.6 million. The Hawaii Tourism Authority, which receives 37.9 percent of those taxes as its only source of financing, would get $59 million.

But the authority budgeted for $61 million, and much of that money has already been allocated. The board, which pays for special projects, festivals and all of Hawai'i's tourism marketing programs, has a reserve of about $2.5 million, which would just cover the expected shortage. But any larger shortcoming could mean programs will need trimming.

"When the state has budget concerns, we have budget concerns," said authority chief executive officer Richard Humphreys. "This isn't panic time. But we need to plan accordingly. We're not naive, but we're realistic."

The authority began the year with a surplus of about $12.5 million, according to chief administrative officer Lloyd Unebasami. But during the Legislature's special session last month, lawmakers approved using $10 million of the pool for emergency marketing efforts.

Since Sept. 11, visitor numbers have fallen dramatically. Arrivals have hovered around 85 percent of their normal levels, but the Japanese market is still off by about 50 percent.

Reach Michele Kayal at mkayal@honoluluadvertiser.com