Contract to market state may be split up

By Kelly Yamanouchi
Advertiser Staff Writer

The Hawai'i Tourism Authority will soon seek proposals that could divide up the state's multimillion-dollar destination marketing contract, long the sole responsibility of the Hawai'i Visitors & Convention Bureau.

The authority is hoping to call for bids in March for all of the following:

• The state's entire leisure marketing contract.
• Leisure marketing for any combination of major market areas, including North America, Europe, Oceania, Japan and other Asia areas.
• Marketing for corporate meetings and incentives.

Depending on what the authority decides, the promotion of Hawai'i as a visitor and business destination could land on the laps of several marketing agencies rather just one.

The visitors bureau, which has promoted Hawai'i for 100 years, holds a contract worth $33.15 million to market Hawai'i to the world this year.

The terms of the new contracts will start in 2004 and last for at least four years, with annual reviews and provisions to cancel the agreements for nonperformance.

The tourism authority has not decided on the value of the new contracts.

In the past the tourism authority has only sought proposals for either leisure marketing for all major markets or marketing for conventions and corporate meetings and incentives.

The last time the tourism authority sought proposals for its leisure marketing contract was in 1999, which led to the bureau's three-year contract that expired at the end of last year.

Last year the authority allowed negotiations for a one-year contract with the Hawai'i Visitors & Convention Bureau instead of renewing the bureau's contract for another three years.

But next year's contract or contracts will allow the possibility of reviewing and assigning different leisure market areas to several marketing agents.

"This is the new HTA," said Frank Haas, marketing director of the Hawai'i Tourism Authority. "We want to construct a process so we get the very best proposals that the state can get," he said, adding that it is possible the visitors bureau will not win the entire marketing contract.

The tourism authority has continued to negotiate final terms on the visitors bureau contract for this year as well as its contract with Philadelphia-based SMG for marketing of the Hawai'i Convention Center.

One issue snagging negotiations with the visitors bureau contract is intellectual property rights. The authority and the visitors bureau are at odds over who controls creative marketing property used in the state's promotion, such as the current Hawai'i brand logo.

The authority is still uncertain if dividing the marketing contract will yield the best results.

"Philosophically there is a case to be made for a local brand," Haas said. But he added that the tourism authority also wants to hear different proposals. "It's possible that for some of these areas there may be some out-of-the-box bids and that's exactly what we're looking for," Haas said.

Visitors bureau president Tony Vericella said he welcomes a competitive bidding process.

"We want to prove that we are the right entity to actually do the leisure and corporate incentive marketing everywhere," Vericella said. "I believe we will be able to prove that we are."

Vericella said Hawai'i benefits from centralized and integrated destination marketing in the state, while other destinations have state tourism organizations as well as separate city or county visitor and convention bureaus. Organizations like the Maui Visitors Bureau are all affiliated with the HVCB.

A request for marketing contract proposals is expected to be ready in March when the tourism authority plans to place ads and post information on its Web site. The proposed deadline would be six weeks after the postings.

A panel including representatives from business or academia, retail, airlines, Hawaiian culture, tour wholesalers, hotels, visitor attractions, individual islands and board members would review the proposals in May. Final selections are expected in June and planning for 2004 would begin in July.

In other business at the tourism authority's meeting yesterday, board members approved contingency plans in the event of military action. The plans call for redirecting efforts away from Hawai'i brand advertising and toward public relations, promotions and cooperative marketing programs with airlines and wholesalers.

The board also gave authority to its staff to modify the visitors bureau's marketing plan and the SMG convention center marketing plan if there is a major downturn in tourism resulting from a war or a major terrorism incident until the board can legally convene.