Posted on: Tuesday, July 8, 2003

HVCB in danger of losing contract

By Kelly Yamanouchi
Advertiser Staff Writer

The Hawai'i Visitors & Convention Bureau, longtime marketer of the Islands as a visitor destination, may lose more of its grip on state tourism marketing dollars, including $6.3 million in Japan visitor promotion money.

Gov. Linda Lingle has said there is a "high probability" the visitors bureau will not get the entire $25 million annual marketing contract now up for bid, adding that some other proposals were impressive.

She also said the Hawai'i Tourism Authority acted responsibly in considering whether to award the contract to one group, "or perhaps there is another organization with expertise in Japan or Europe or with meetings and conventions."

The Hawai'i Tourism Authority is set to decide on the winner or winners of the marketing contracts at a board meeting July 24. The contract would take effect Jan. 1, 2004, and last for at least four years.

The authority's request for proposals attracted 13 bidders before the field was whittled down to 10. The Japan marketing contract attracted the most competition with six bidders. Three of the six were eliminated early in the process.

As the review is under way, HVCB is attempting to respond to accusations in a highly critical state audit that it misused state money and violated sound accounting practices. Some believe the audit could hurt the bureau's chances of getting the state contract.

Industry sources said three Japan-based marketing or advertising agencies are finalists for parts of the contract: Dentsu, Asatsu-DK and Marketing Garden. Other bidders include Loomis Inc., a local firm that is competing for multiple market areas. The tourism authority said the names of the bidders and the markets they are vying for are confidential.

"There were a lot of good proposals," said Brian DiMartino, president of 21st Century Group and a member of the tourism authority's industry advisory committee. "There were a lot of options."

Frank Haas, the authority's marketing director overseeing the review of the proposals, said awarding the entire contract to HVCB is a question of whether to have one Hawai'i brand throughout the world.

"Historically we've had one contract and one contractor and that presumes that having one organization to manage the brand around the world is an ideal situation," Haas said, noting that is the approach Coca-Cola takes.

Another view is that brands should be customized to different markets.

A localized approach may prove an advantage for Japanese companies marketing in Japan or for European firms competing for the Europe market.

HVCB president Tony Vericella said Hawai'i should have one organization with an integrated marketing approach, while other bidders that are primarily advertising agencies could focus on different parts of the world.

Haas said an agency with one client knows that client very well, "but you don't necessarily get exposure to other ideas outside that area ... so there's arguments to be made on both sides."

Any recommendation to award part of the contract to an agency other than HVCB may face some hurdles at the tourism authority board. One of the visitors bureau's staunchest supporters, senior vice president of Starwood Hotels & Resorts in Hawai'i Keith Vieira, sits on the board of the tourism authority.

Vieira said HVCB has done "very good things for the industry and the state during some very tough times."

Vieira said if an organization other than HVCB is recommended for a contract, he said he would vote to approve it if he believed the recommendation was made "for all the right reasons."