Convention Center to shift marketing
| • | Board approves $56 million budget |
By Kelly Yamanouchi
Advertiser Staff Writer
Convention center operator SMG will take on the added task of marketing the Hawai'i Convention Center next year in the first shift in the job since the meeting facility opened more than four years ago.
The Hawai'i Tourism Authority yesterday approved the marketing plan from Philadelphia-based SMG and authorized its chief executive to develop a contract to operate and market the center for 3 1/2 years.
The move comes under recently passed legislation that requires one agency to operate and market the center by Jan. 1, 2003. With just two months before SMG takes over the marketing role, the focus now is on avoiding any slips in the handover from the Hawai'i Visitors & Convention Bureau.
Convention center general manager Joe Davis said yesterday he would begin working with a transition committee as soon as possible and the visitors bureau, tourism authority and others in the industry.
According to the plan, SMG's contract would run from Jan. 1 to June 30, 2006, subject to a review after 18 months, and would not exceed $14 million over the term of the contract.
For the first year, the authority also will consider transferring $271,000 for destination services from the SMG budget to the Hawai'i Visitors & Convention Bureau. The plan also will hold $200,000 for advertising from the SMG budget for next year — half its advertising budget — to use as seed money for a business branding program to increase business-visitor spending in Hawai'i.
Murray Towill, president of the Hawaii Hotel Association, said he and other members would have liked to see $400,000 to $600,000 more left at the visitors bureau for destination marketing for meetings, conventions and incentives.
Convention center general manager Davis said the changes would bring a small reduction in SMG staff, but sales positions would multiply. He said SMG was in talks with employees at the visitors bureau who would be affected by the loss of the contract.
"Many of the same people that are doing the same job currently, we hope to attract to join our team," Davis said.
SMG also will have an additional salesperson at its Philadelphia headquarters to market the Hawai'i Convention Center exclusively, and target potential clients in the Northeast, including financial services and pharmaceutical companies.
SMG is hiring consultants including the Native Hawaiian Hospitality Association, president of PacRim Marketing Group Dave Erdman, and organizer of the PRIME conference planning professionals conference Priscilla Texeira.
No competition
Davis said he wants to expand the kuhina program, which uses "ambassadors" who are members of an association or organization to help secure clients for the convention center.
He said Hawai'i Convention Center marketing would benefit from the client database of SMG, which operates other convention centers, and that he is not bothered by criticism from some who say business will be hurt by competition with other SMG centers.
"We're not unlike a hotel ... Hilton Hawaiian Village goes up against other Hiltons in terms of their initiatives for trying to land business," Davis said. "If anything, there's a great deal more synergy."
SMG also will focus more on finding new potential clients by targeting those eligible to hold a convention here. The company will be working closely with the University of Hawai'i and the state Department of Business, Economic Development and Tourism to bring more educational symposia to Hawai'i and dual-use technology meetings in areas such as defense. SMG also plans to work more closely with Hawai'i's congressional delegation to close deals with Washington-area clients, Davis said.
According to the SMG plan, the total contract would not exceed $7 million for marketing flexibility funds, or $2 million each year. These funds typically are used to attract events with a large economic impact — those that can change perceptions about Hawai'i — or for multi-year contracts.
Also at the meeting yesterday, the Hawai'i Tourism Authority approved a cut of $1.25 million from the annual budget of its primary marketing contractor, the Hawai'i Visitors & Convention Bureau.
The authority plans to use the money for more of its own programs, including accountability reviews, as it faces increased pressure from the state Legislature and others to maintain tighter controls and practices for its annual $56 million state budget. It also will use some of the money for more visitor research, festivals and events.
Opportunities seen
Frank Haas, the tourism authority's marketing director, said he would like to start a three-part program for assessment and accountability.
"That $1.25 million is really meant to cover a lot of opportunities that HTA has that we don't have funding for," Haas said. Through the HVCB cut, he said, "What HTA did was balance these goals and objectives."
The tourism authority approved a visitors bureau leisure marketing plan of $33.15 million, subject to a Japanese industry committee's approval of North American programs and review by Nov. 15, 2003. It also approved $2 million for corporate meetings and incentives.
"In light of all of these changes, we're going to be relooking at our whole organization, where we need to shift people or reduce people," said visitors bureau president and chief executive Tony Vericella.
State Sen. Donna Mercado Kim said she was concerned that only $2 million was going toward marketing for corporate meetings and incentives, but she was glad to see SMG's plan approved and money redirected to the tourism authority's research programs.
"Any accountability at this point is better than what they had before," Kim said. "This is really kind of a milestone as we move forward in some of the reforms and the accountability that I talked about the last two years in the Legislature, so I'm quite pleased with some of the things taking place now."
