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The Honolulu Advertiser

Posted on: Thursday, September 6, 2001

Tourism Authority approves $17 million marketing budget

By Michele Kayal
Advertiser Staff Writer

Facing what it expects to be a tough year, the Hawaii Tourism Authority took the first step in approving a $47 million marketing budget yesterday, $2 million more than its marketing contract allots, but level with financing in 2001.

In a debate that waxed sometimes testy and hostile, some committee members jousted with each other, and challenged the Hawaii Visitors and Convention Bureau to justify the request for more money. The authority, which controls a $61 million budget, has two contracts totalling $45 million-a-year with the bureau to market Hawai'i as a leisure and business destination through December 2002.

The authority granted the bureau a $2 million emergency appropriation for 2001 to help boost Convention Center and meetings business, whose visitors are estimated to spend more than twice what vacation travelers spend.

The bureau argued yesterday that to maintain the momentum of its 2001 business marketing efforts and meet the visitor spending goals the authority has charged it with for 2002, it would need the same amount of money for the coming year.

"There are a lot of goals that the HTA has set forth, and one is to build higher-spending visitors over time," said bureau chief executive officer Tony Vericella. "You need to have dedicated funding at more competitive levels on the (corporate market) too."

The authority has made increased visitor spending the cornerstone of its state tourism policy. According to the board's master plan, visitor spending for 2002 would grow 5.1 percent over 2001.

But some members of the authority's marketing committee, the marketing program's first hurdle, suggested the bureau was taking the emergency appropriation for granted, and that an annual assumption of additional money would mean a de facto rise in its budget.

"You're not talking about an emergency here," said committee member Ron Wright, who is also Continental Airlines managing director for sales and marketing. "You're talking about a philosophical difference that this budget should go to 47 or 48 or $49 million."

Several of the members who raised objections said marketing is not the authority's only job and that it has other goals — like developing new tourism products and improving natural resources— that should receive more attention.

The bureau said that with the additional $2 million, which would be used exclusively for the Convention Center and corporate meetings market, it would generate 900 "leads" in the corporate business market that goes to hotels, and 270 bookings. Convention Center bookings would come in at roughly 50, Vericella said, compared to about 19 without it.

With the extra financing in 2001, the bureau exceeded its goals in the corporate meetings business, Vericella said, generating roughly 1,040 leads on clients, compared to a goal of 1,000. It fell short of its goal of 52 bookings for the Convention Center, however, hitting only 42.

The money would come from funds that had not yet been allocated for a particular use, said the authority's chief administrative officer Lloyd Unebasami, which total roughly $2 million. No existing programs or efforts would be cut.

The authority's marketing committee voted to recommend the $47 million plan to the full authority. The 13-member board is expected to vote on the plan next week.

Shari Chang, senior vice president of marketing for Aloha Airlines and one of the committee's most outspoken members, said she ultimately voted for the plan that she had initially challenged because she did not want to see Hawai'i lose ground, and because the increased financing would not affect other programs already in place.

"I was willing to go ahead and agree, but I still think we need more discussion about other areas that we're committed to funding that are also marketing the state for us," she said.