Disney talks raise concern with top tourism officials
By Katherine Nichols
Advertiser Staff Writer
The Hawai'i Visitors & Convention Bureau is drawing scrutiny from the state's top tourism officials for its negotiations for a $3.9 million, multiyear marketing contract with The Walt Disney Co. to promote Hawai'i through the Kaua'i-based animated film "Lilo & Stitch."
The Hawai'i Tourism Authority, which provides state money to the HVCB, and legislators are questioning whether the bureau began negotiating the marketing agreement before receiving approval to spend the money, which is required for deals of $500,000 or more.
The bureau's logo and a link to its Web site already appear on Disney's official "Lilo & Stitch" Web site, and Disney has changed the film trailer to specifically mention Hawai'i and 'ohana in promotions for the opening of the film this month.
"My concern has always been the process and the way in which this matter is being agreed to," said Sen. Donna Kim, D-15th (Kalihi Valley, 'Aiea).
Kim said she was reserving judgment on the value of the deal, but said she intends to hold a hearing on the issue. Kim, chairwoman of the Senate Committee on Tourism and Intergovernmental affairs, cited the state auditor's recent criticism of the tourism authority for entering into marketing deals before official approval had been sought.
But bureau executive director Tony Vericella said the bureau has spent no money yet on "Lilo & Stitch." He said Disney added the bureau logo to its Web site and Hawai'i references to the film trailers as "good faith" gestures even though a contract has yet to be in place.
Still, Vericella said problems could arise if the tourism authority does not approve at least part of the deal the bureau has been negotiating with Disney.
Some members of the authority said they were not satisfied with the bureau's rationale for its discussions with Disney and asked for more details.
"It's clear that we're changing the rules under which (the authority and the bureau are) working together," said Frank Haas, the tourism authority's marketing consultant, who is reviewing the proposed contract. "There was a rigorous dialogue that has happened between HTA and the HVCB about the plans and what we get for them. Any marketing program going forward has to be justified."
Haas said it is unlikely the authority will approve the multiyear deal because the tourism authority's board will undergo dramatic change in July and the bureau's contract with the HTA expires at the end of this year. But the authority likely will support a reduced financial commitment limited to this year.
"We were presented with a package by HVCB, and we've reviewed it and recommended that we proceed with a portion of it that is in line with the 2002 strategic goals," Haas said. "Multiyear obligations are to be avoided or minimized."
Vericella said the bureau will not need any extra money for the proposed Disney deal and instead will use money that had been set aside for "marketing opportunities" that arise during the year. Vericella declined to provide further financial details, citing a confidentiality agreement with Disney.
Disney executives did not return calls seeking comment.
If a one-year contract is approved, estimates put the bureau's investment at less than $2 million, some of which come from the Neighbor Island bureaus.
"We're technically budgeted for it and ready to go should the HTA give the approval," said Sue Kanoho, executive director of the Kaua'i Visitors Bureau.
The nationwide and global exposure from the images of Hawai'i in the film could give a much-needed boost to the state's visitor industry. And other Hawai'i companies also are participating in marketing tie-ins with Disney.
Hawaiian Airlines established a marketing association with the film in January 2001. Hawaiian Airlines spokesman Keoni Wagner would not specify the value of Hawaiian's partnership with Disney, but said about 75 percent of the deal involves complimentary or reduced-rate travel. This includes transporting 55 Kamehameha School choir members to perform "He Mele No Lilo," the song they recorded for the movie, to the Los Angeles premiere of the film June 16.
Wagner said the airline will provide less than $1 million in cash.
The bureau's and Hawai'i companies' contributions come in addition to Disney's efforts. Disney may spend $100 million to market the film, Vericella said.
The Disney premiere in Los Angeles will feature lei for actors and observers, as well as Hawaiian dance and music. Talks with Disney include the possibility of broadcasting the red carpet walk and entertainment associated with the premiere on ABC, a subsidiary of Disney.
Hawai'i's contributions will pay for benefits specific to promoting the Islands. These include commercials about Hawai'i in the ABC telecast, messages about the Islands in the DVD release of the film, and a database of potential travelers from the Disney/HVCB Web site market research.
The bureau did not involve the state or county film offices in its negotiations. Yet Kaua'i Film Commissioner Judy Drosd said this kind of cross publicity is typical. For example, sweepstakes promotions that promised a trip "to where the movie was filmed" complemented all three "Jurassic Park" movies. But she said she believes the animated film carries more potential benefits than previous projects.
"I think it's because 'Lilo & Stitch' is Hawai'i-themed and takes place in Hawai'i," Drosd said. "I think they see this as a real tie-in for visitor attraction, especially when you're targeting families." After all, she added, "Hollywood has a bigger reach than our visitors bureau can ever have."
The film opens nationwide on approximately 3,000 screens and centers on Lilo (the voice of Daveigh Chase), a Hawaiian girl who lives with her older sister, Nani (voiced by Tia Carrere) on Kaua'i. Lilo finds and adopts a stranded, notorious alien dog-like creature from space, names him "Stitch" and introduces him to the concept of family.
Viewers of an early cut of the movie have generally given positive reviews.
"It's amazing how Disney has really worked hard to get the whole Hawaiian culture thing right," said state film commissioner Donne Dawson. "I'm part Hawaiian myself, so I don't take these things lightly."
Reach Katherine Nichols at 525-8093 or knichols@honoluluadvertiser.com
