Marketing proposal draws questions
By Kelly Yamanouchi
Advertiser Staff Writer
As the Hawai'i Tourism Authority prepares to decide on a proposal that would transfer responsibility for marketing the convention center away from the Hawai'i Visitors and Convention Bureau, some in the visitor industry and on the authority's board are speaking out against the impending shift.
The authority's board is scheduled to take action Thursday on a proposal for marketing the center by Philadelphia-based SMG, which also currently manages the center.
But in the past month, a growing number of tourism officials have begun lobbying the authority board and Gov. Ben Cayetano, saying the switch to SMG could hurt the center's meetings business at a crucial time for the industry.
HVCB has a $4 million annual budget to market the convention center. But that contract expires at the end of the year, and the state Legislature recently passed a law requiring that by Jan. 1 whatever agency manages the center also markets it. The tourism authority asked SMG to submit the lone proposal for marketing the convention center.
Cayetano said yesterday that he does not support switching responsibility for convention center marketing to SMG. The company, he said, has a "built-in conflict of interest because it markets to other convention centers on the Mainland which may be competing for the same conventions."
"Moreover," Cayetano said, "SMG does not have the network around the world built up by the HVCB over the past 50 years. ... This sad state of affairs is not SMG's fault. It is the result of a bill driven by politics rather than reason and common sense. There was no public input on the change. Rather it was the handiwork of a state senator who had a personal axe to grind against the HVCB."
Sen. Donna Kim, who played a key role in passage of the convention center legislation, said it was "purely done on the facts and the issues and the questions that cannot be answered and the goals that were not met."
She also defended the possibility that SMG is chosen to market the center, noting that it could market conventions cooperatively and pass conventions among their centers.
Yesterday Hawaii Tourism Authority executive director Rex Johnson said he plans to follow the new requirement for one convention center agency. "At this point in time it's not our propensity to go ahead and violate the law," Johnson said.
Tourism authority board chairman Mike McCartney, president of Hawai'i Public Television, has also said he plans to follow the letter of the law.
Kim said that if the authority does not name one agency as both the marketer and manager of the convention center by the start of next year, "I imagine that there would be some ramifications from our part from the mandate of the Legislature. They would need to have their budget reviewed before us and I would think it would have a serious effect on that."
But some on the authority say more time is needed to consider the effects of the switch on the visitor industry.
"I've heard a number in the industry suggest that there's no need to rush this decision until the consequences are understood," said David Carey, chief executive of Outrigger Enterprises Inc. and a tourism authority board member. "Knowledgeable industry people who are used to working in the (meetings, conventions and incentives) business are concerned about what's going on right now. People that aren't in the business and don't understand the ramifications don't seem to be as concerned about it and in fact are moving ahead to make a quick decision."
Carey said he thinks the authority should take more time to assess the performance of SMG instead of approving the contract to start at the beginning of the year. The current SMG contract does not expire until June 30, he said.
Among those outlining concerns are Hawai'i Hotel Association president Murray Towill, who has written a letter to the authority noting that his agency's member hoteliers are concerned about who will provide services for conventions and how destination marketing will be integrated with convention center marketing.
"We're trying to get questions answered now as opposed to having people question later," Towill said. Because conventioneers stay in area hotels, "the success of the center has a direct impact on how much business that we do," he said.
SMG, for its part, manages convention centers across the country, but this would be its largest convention center marketing contract. "It wasn't an interest on our part," said SMG's director of marketing Randall Tanaka. "If this is what we're tasked to do, then we'll do our best."
Tanaka said the common model for convention center marketing is through visitors' bureaus, with a few exceptions. But, he said, he does not have doubts about SMG's competence. "We understand the business well, we understand the customers well and we will stand on our merit," Tanaka said.
Visitors bureau president and chief executive Tony Vericella said the authority has not asked the bureau to prepare to do any part of the marketing of the convention center next year through subcontracting or any other method.
"I really am not sure if that's still a possibility because they haven't discussed that with us or me personally," Vericella said. He said the visitors bureau has continued to express its interest in marketing the convention center.
The switch to SMG to market the convention center would affect between 15 and 18 of the visitors bureau's employees, out of 25 in the division that does marketing for conventions, corporate meetings and incentives. Vericella said SMG has asked some visitors bureau employees to consider working for SMG.
Reach Kelly Yamanouchi at 535-2470, or at kyamanouchi@honoluluadvertiser.com.
