Tourism agency falls short
By Kelly Yamanouchi
Advertiser Staff Writer
Legislators told the Hawai'i Tourism Authority that in spite of some improvements, the authority is not fulfilling its goal of attracting higher-spending visitors, particularly business travelers, and needs to do a better job of accounting for and negotiating marketing contracts.
The tourism authority designates about $6 million to market the Islands to business travelers, including $4 million to promote the convention center and $2 million to encourage companies to hold their meetings in the state.
Tourism authority marketing director Frank Haas said the authority increased the proportion of money within its current budget earmarked for business marketing.
But state Sen. Donna Mercado Kim, chairwoman of the Senate's tourism committee, said the tourism authority's strategic plan calls for marketing to higher spending visitors and more emphasis is needed on business travelers, whose outlays are higher than those who come to Hawai'i on vacations.
Kim also said the $2 million earmarked for corporate group events has limited benefit because "there's only a few hotels that these groups really go to."
Haas said he will meet with Enterprise Honolulu and other business groups to develop new cooperative programs for business marketing.
"I promise you that that is primary on our minds that we will increase the tab on the business market," said Rex Johnson, the authority's executive director.
The tourism authority has been attempting to respond to the Legislature's demands that it meet higher performance standards and address the state auditor's criticism that it lacks adequate accountability for its spending.
Kim said she has noticed improvements under the leadership of Johnson, who took over as head of the agency in September, but that there is more to be done.
For one thing, Sen. Shan Tsutsui said the tourism authority needs to do a better job of measuring the costs and benefits of sponsoring visitor events, including the Mercedes Championships golf tournament.
"It's a place that we have been lacking," Johnson acknowledged.
Of all its marketing contracts, the authority has had the most trouble monitoring its $33 million agreement with the Hawai'i Visitors & Convention Bureau.
The visitors bureau, for example, does not know if it must fulfill the last two years of a three-year contract with Walt Disney Studios to promote travel to Hawai'i through marketing of the animated film "Lilo & Stitch."
The tourism authority said it did not want the visitors bureau to enter into multiyear contracts and afterwards said it would not pay for the "Lilo & Stitch" project for the second and third years.
"It was very clear from HTA's standpoint that this was a single year contract," Johnson said.
Haas said the decision was made because the tourism authority needs to be more focused on attracting higher-spending vacationers. The "Lilo & Stitch" campaign targeted families.
"In a post-9/11 world, we need flexibility. It's difficult to tie up a chunk of money," Haas said.
HVCB President Tony Vericella said whether HVCB is still committed to paying Disney for the last two years of the contract "certainly can be debated."
The Disney contract is estimated to be about $3.9 million, including about $2 million in the first year.
"Different people who read that (provisions of the contract) may interpret the contract differently," Vericella said. "There is no resolution at this point either way."
Kim said she was concerned that "it leads us to the question of whether we would be sued." She said the state should not be involved in the dispute.
Vericella said neither the state nor the tourism authority are parties to the contract, and said he hopes to resolve the issue before the beginning of the second year of the contract, which starts in April.
