Visitors bureau contract extended

By Kelly Yamanouchi
Advertiser Staff Writer

The state's tourism authority decided yesterday to make the Hawai'i Visitors & Convention Bureau its marketer next year with a $36.4 million budget — and a number of caveats.

The Hawai'i Tourism Authority board approved an extension to the visitors bureau's contract for up to one year, considered in two six-month increments.

The board said that will allow it flexibility to consider changing marketing with world conditions and to review performance.

By 2004 there will be another competitive bid process for the contract, said authority chairman Mike McCartney.

The budget approval also is subject to approval of the visitors bureau's marketing plan, due Oct. 1.

"The key will be the quality of the marketing plan and the ability to measure the impact," McCartney said.

Visitors bureau president and CEO Tony Vericella said yesterday that it was positive that the tourism authority is moving forward with budget decisions while allowing time for more careful evaluation.

"Now we can all continue to move forward so that Hawai'i retains its marketing momentum," he said.

The board also decided that expenditures are subject to its decision on whether the visitors bureau's budget should be based on a calendar or fiscal year. The visitors bureau has accrued hundreds of thousands of dollars in interest charges because it has had to borrow from banks to cover a financing lag between budget calendars, part of a years-long problem.

The $36.4 million budget approved for the bureau yesterday is comparable to its current budget, excluding $6 million for convention marketing and incentives set aside because a new state law says the agency that manages the Hawai'i Convention Center, now SMG, should also market it.

Currently, the visitors bureau markets the convention center. SMG said it will submit its marketing plan by Oct. 21 for the tourism authority's approval.

The tourism authority also approved a $2 million cut to the visitors bureau's current $45 million budget, part of Gov. Ben Cayetano's $5 million cut to the tourism special fund announced in June.

Most of the cuts will come from this year's fourth quarter, proportional to spending, said marketing director Frank Haas.

The budget cuts include 6 percent reductions in spending on the U.S. East Coast, U.S. West Coast and Japan markets.

Next year's budget is set for a $2.6 million cut and the tourism authority's costs would take the rest of the cut.

The tourism authority also approved $600,000 in financing for sport events next year, subject to an evaluation of past events and proposed events. That's $200,000 less than this year because of fewer events and less financing.