Cut in tourism fund comes at crucial time
By Katherine Nichols and Frank Cho
Advertiser Staff Writers
Gov. Ben Cayetano's decision to cut nearly 10 percent of the state's marketing money for tourism comes at a crucial time for the visitor industry, still suffering from reduced arrivals in the wake of Sept. 11.
In a line-item veto Monday, Cayetano cut the appropriation of the Hawaii Tourism Authority's special fund by $5 million, to $56 million, for fiscal year 2003, noting that money allotted for tourism marketing still is higher than it has been in the past.
The move still squeezes the authority, which funds the state's tourism marketing efforts worldwide, such major sporting events as the PGA series and the NFL Pro Bowl, as well as community festivals and other activities.
"Clearly it's coming at an unfortunate time," Pauline Sheldon, interim dean of the School of Travel Industry Management at the University of Hawai'i, said yesterday of the funding cut. "The need to build back the tourism industry is critical, so it is unfortunate in that regard. It's going to make it harder to keep Hawai'i competitive."
Keith Vieira, tourism authority board member and senior vice president of Starwood Hotels and Resorts, cited the tourism industry's ongoing battle with a faltering Japanese economy, the continued threat of world terrorism and unsteady visitor arrivals and expenditures.
"Any reduction in the overall (budget) number, considering what a challenge we've had ... is a concern," he said.
Lloyd Unebasami, the authority's chief administrative officer, said it is unclear how the authority might trim funding.
"Now we'll have to have the board talk about where we'll find $5 million," said Unebasami. "Like everybody else, we'll have to do more with less. But our less is still a lot."
The funding cut comes as state figures showed fewer visitors came to Hawai'i last month than did a year ago, but the decline was not as bad as in recent months, and those who did come stayed longer.
The state Department of Business, Economic Development and Tourism said 507,680 tourists arrived in Hawai'i in May, down 3.8 percent from 527,944 during the same month a year ago. Their average length of stay, however, rose 4.4 percent to 8.78 days from 8.41 days in the same year-earlier period.
In one bright spot, arrivals from Japan — the largest and most important segment of Hawai'i's eastbound tourism market — was down 8.3 percent during May from the same month a year ago. That was an improvement from a decline of 20 percent in March and nearly 30 percent in January. Overall, international arrivals are down 12.9 percent from a year ago.
"This is certainly an encouraging trend, and overall, we view this month's data as good news," said Seiji Naya, department director. "The Japanese visitor count is a clear trend toward recovery."
Tourism, the state's No. 1 industry in terms of economic output, is still recovering from the aftershock of the Sept. 11 attacks when visitor arrivals were nearly cut in half.
All the islands except for Lana'i and Moloka'i, which were up 33.8 percent and 13.5 percent respectively, reported lower arrivals during May. Domestic visitors to O'ahu stayed the longest at 7.33 days, followed by Maui at 6.83 days, the Big Island at 6.52 days, Kaua'i at 6.04 days, Lana'i at 3.23 days and Moloka'i at 3.1 days. Only O'ahu reported an increase in the average length of stay.
Preliminary spending figures for April showed visitor spending was $708.4 million, down 13.8 percent, compared to the same period last year.
For the year to date, visitor arrivals are down 10.4 percent and total visitor days have declined 8.3 percent. Through April, visitor spending was off 5.9 percent at $3.3 billion.
Reach Katherine Nichols at 525-8093, or at knichols@honoluluadvertiser.com.
Reach Frank Cho at 525-8088, or at fcho@honoluluadvertiser.com.
