Posted on: Tuesday, July 29, 2003

HVCB deal isn't done

By Kelly Yamanouchi
Advertiser Staff Writer

The Lingle administration says the decision to break up the state's tourism marketing contract among several agencies isn't final, suggesting that the governor may get involved in an effort to reconsider who will sell Hawai'i as a vacation destination.

Marsha Wienert, Lingle's tourism liaison, yesterday emphasized that the Hawai'i Tourism Authority board has only authorized the start of negotiations with the five organizations selected to market Hawai'i as a visitor destination. The decision by the HTA last week took the $25 million annual contract that has historically been given to the Hawai'i Visitors & Convention Bureau and split it between the HVCB and four other companies.

The authority has not authorized its staff to sign any contracts, Wienert said, a point that was also made by Lingle.

"There are unanswered questions," Wienert said. "I call them details. Some of them could be very big details."

Last week, after a briefing from Wienert, Lingle also said important issues remain unresolved.

"One of them was how do we maintain Hawai'i branding if you split it up into five different organizations," Lingle said. "We worked for 100 years to create the image of Hawai'i that we want, that conjures up certain images in people's minds. How do you maintain that consistency of image now that you've broken this up into five contracts — and that has to be answered. It seems to me to be common sense that you would have to answer that question before you go down this road."

The comments from Lingle and Wienert suggest the administration isn't convinced that reducing the HVCB's role is the right decision. While Lingle could bring considerable pressure to bear on the members of the HTA board, it is an independent state authority. Wienert has one vote on the board.

The tourism authority board voted unanimously Thursday to give HVCB the largest part of the marketing contract, the portion covering North America.

HVCB also won the contract to market corporate meetings and incentives. But the authority stepped over HVCB and selected Dentsu Inc. for marketing to Japan, Marketing Garden for the rest of Asia, The Mangum Group for Europe and The Walshe Group for Oceania.

The authority's decisions, if they lead to signed agreements, would mean the end to HVCB's role as the primary agency promoting Hawai'i to travelers around the world.

Authority marketing director Frank Haas said it is unlikely that the authority's contractor selections would change after negotiations.

But Wienert said: "You never know."

According to Wienert, authority board members "were all leery" despite the unanimous vote.

Wienert said "the majority of the board was concerned about all those questions. And that's why they have to come back to the board" before signing contracts.

Other unresolved issues, Wienert said, are whether the tourism authority has the resources to manage multiple contracts and the differences in striking contracts with for-profit businesses compared to nonprofits, such as HVCB.

"A big concern is: will our costs go up in doing this?" Wienert said. "The HTA may go to one of those contractors and say, 'You can only have a profit of 7 percent' and they may say, 'Oh, sorry, I don't want that.' "

"Once we get through all of the questions and identify all of them, I don't know what the outcome will be," Wienert said.

Hawai'i Tourism Authority executive director Rex Johnson said it is standard procedure in competitive bidding to first authorize negotiations, then to later approve the signing of contracts.

"If those negotiations aren't able to work out then we'll have to do something else," Johnson said. But, he said, "we hope there is not a chance that the negotiations won't work out."

Some HVCB supporters haven't given up hope that the agency may regain its position.

"I would still like to see a role for HVCB ... in the overall marketing effort," said Rick Egged, Waikiki Improvement Association executive director.

Others are concerned that more deliberations on the contractors will lead to delays that will hurt the state's tourism promotion efforts.

"I don't understand all this taking so long in decision making," said Gilbert Kimura, director of passenger and cargo sales in Hawai'i for Japan Airlines. "Many will agree, many will disagree, but we need to close ranks and move forward."

Reach Kelly Yamanouchi at 535-2470 or at kyamanouchi@honoluluadvertiser.com.