Paul J. Casey, HVCB president and chief executive, made the pitch for the first time at a House Tourism Committee hearing this morning and was scheduled to repeat the presentation this afternoon to the Senate Economic Development Committee.
The request for the big increase in funding comes at a time when lawmakers are faced with an estimated $170 million budget shortfall, with one prominent legislator, House Speaker Joe Souki (D, Wailuku), raising the specter of higher taxes.
But the HVCB, the state-contracted marketer for tourism, is ready with arguments in support of Hawaii's No. 1 industry. Tourists now spend more than $11 billion a year in Hawaii, generating $1.8 billion in taxes, one fourth of the state's total, the HVCB contends.
The HVCB has set itself a target to produce almost 8 million annual visitors - tourists and conventioneers - four years from now, a 15.9 percent increase from 1996. Details of Casey's budget presentation, obtained by the Star-Bulletin, show that the HVCB is ready to make a case that money spent on tourism comes directly back with revenues pouring into the economy and boosting the state's tax take.
The state contribution to the HVCB for the current fiscal year, ending June 30, is $24 million.
The HVCB wants to lift that to $53.8 million for the 1997-98 fiscal year and then to $61.8 million for 1998-99.
Seiji Naya, director of the Department of Business, Economic Development & Tourism and the person who administers the state's share of the HVCB's funding, said there isn't enough money to give tourism promoters what they want.
Naya said he agrees more money is needed and he does support the general principle of an increase, but he thinks the private sector can do more by itself.
The HVCB has plans to increase its private income, including raising total membership dues to $3.1 million in fiscal 1998 and $3.3 million in fiscal 1999 from the current $2.6 million.
The bureau also plans to double the cooperative advertising contributions it gets from the private sector to $7.4 million in fiscal 1998, from $3.7 million this year, and raise that contribution in fiscal 1999 to $10.5 million.
It also gets $4.6 million a year in contributions of goods and services from the private sector, such as air fares, hotel rooms and meals for visiting travel agents and travel writers. Naya said late yesterday he hadn't heard any specifics of what the HVCB was seeking from the state but he had heard they were talking in the $50 million-a-year range.
"I feel the visitor industry is extremely important, especially in turning our economy upward," Naya said.
"In the short run, there aren't many things that would have as quick a response as tourism."
However, he added, "The state doesn't have the kind of money, the $50 million they're talking about, but I am going to ask the governor to add some additional money for marketing, especially to promote the neighbor islands."
Still, the DBEDT chief said he would like to see the private sector come in with some kind of a matching-fund arrangement. Naya repeated an old argument of his, that many businesses benefit from tourism but don't contribute to the HVCB. Under the HVCB plan, all of the funding increase would go into marketing. The HVCB is not asking for any increase to cover administrative expenses, sticking to $3.5 million a year. It proposes to hold its spending for Legislature-mandated provisos to $2.7 million next year and boost it to $3.8 million in 1998-99.
But it wants to almost quadruple its spending on advertising, lifting it from $8.3 million this year to more than $32 million in 1997-98 and more than $38 million the following year.
HVCB chapters representing the individual islands would get nearly twice as much money, aside from advertising expenses, to run their operations. That part of the budget would go to $4.2 million next year, from $2.2 million in 1996-97, and rise again to $4.3 million in 1998-99.
The organization also wants to increase its spending on other marketing activities such as trade shows, direct promotions and telemarketing, and public relations.
There should be a strong presence in Japan, where the HVCB has spent virtually no money on advertising in recent years, the bureau says.
Its spending for the Japanese market, $434,000 in 1996-97, should rise to $5.4 million next year and $6.3 million the year after, the proposal says.
The HVCB also wants to spend $1 million a year, after no budget in fiscal 1997, to advertise in Asia-Pacific markets other than Japan, such as Taiwan, Korea, Southeast Asia, Australia and New Zealand.