Friday, June 18, 1999

One-year anniversary


By Ken Ige, Star-Bulletin
A kayaker paddles past the Hawaii Convention
Center as it nears completion on Oct. 8, 1997.

Hawaii Convention
Center trying hard
to earn its keep

The $350 million complex has
had its share of growing pains in
attempting to lure groups to the island

By Russ Lynch


Hawaii Convention Center At noon tomorrow the big glass doors at the Hawaii Convention Center will swing open to let the general public in for a close look for only the second time. The last time was when the $350 million center celebrated its official opening on June 11, 1998.

Many among the hundreds who are expected to visit -- particularly those who drive past it regularly and see little or no activity -- may be thinking "so this is what the inside of a white elephant looks like" or "so this is where all my tax dollars went."

Center officials say those thoughts are understandable but wrong.

For starters, they say, it isn't as empty as it seems. Since it opened there have been more than a dozen events, attracting a total of roughly 30,000 people from outside the state. That's an average of only about one event a month and conventions come and go quickly, lasting only a couple of days as a rule.

So the center is indeed empty much of the time, but that is to be expected in the start-up phase, said Sandra Moreno, vice president for meetings, conventions and incentives of the Hawaii Visitors & Convention Bureau. "Actually, it's doing exactly what it is supposed to be doing," she said.

Moreno noted the accelerating rate at which conventions are being booked now and said that many of those who have come so far are the people responsible for booking other conventions.

For example, the center has recently hosted groups from the American Society of Travel Agents, resulting in a booking for a 2,000-delegate convention in 2002, a meeting of agents who will learn more about Hawaii and be better able to sell it as a destination.

The center has another seven events booked for 1999. Again, that doesn't sound like much and half of them are for 2,000 people or less.

But Moreno points out that the center's first maximum-capacity test will come in October with the three-day gathering of 30,000 people for the American Dental Association's convention.

Using statistical models from the state's Department of Business and Economic Development and details provided by the convention organizers, the HVCB is estimating that the ADA meeting will result in $118 million in direct spending in Hawaii by attendees, generating $9 million in tax revenues for the state.

The HVCB says people attending conventions at the center will spend enough with hotels, restaurants, tourist attractions and tour and transportation operators to generate about $370 million in direct spending in the fiscal year that runs though next June. That will put about $28 million in state tax coffers, according to the HVCB.

Counting some meetings that took place even before the last year's formal opening and those that have occurred since, the sales force has so far sold 76 firm bookings for conventions and has another 78 on its tentative list, awaiting confirmation. They run all the way out to the year 2010.

Hotel tax raised

Meanwhile, the center is almost entirely being paid for by its share of the revenue being generated by the hotel room tax, formally known as the transient accommodations tax. The state Legislature recently raised the tax to 7.25 percent and also applied it to time-share operations.

That will bring in about $156 million in fiscal year 2000, beginning next month. About $70 million of that goes to the counties and $59 million directly to the Hawaii Tourism Authority for promotion. The convention center special fund gets 17.3 percent of the total room tax take, a share equal to about $27 million in the next fiscal year.

State budget experts say they expect to refinance the center's $338 million in loans into a new 25-year plan at a 6 percent annual interest cost, starting July 1. That will require payments of $26.4 million a year, but that is more than covered by the center's share of the room tax, officials say. Operations of the center itself are expected to result in annual losses of about $4 million so the bottom line is a net loss of several million dollars a year.

But center officials note that tax revenues from spending by convention attendees will cover that many times over.

Convention bookings are expected to pick up under new policies of the Hawaii Tourism Authority, the Convention Center Authority and the HVCB, which is responsible for the long-term marketing of the center.

The target, Moreno says, is to get the center up to 40 conventions a year five years from now, averaging 5,000 attendees each.

Meanwhile, the Hawaii public will, bit by bit, be more exposed to the center. Starting in August, for example, live local audiences of about 400 at a time will be invited to the center for the taping of a new version of the "Star Search" cable TV talent-variety show.

Alan Hayashi, executive director of the Convention Center Authority, said several local meetings are planned, involving groups whose national or international parent organizations are being persuaded to hold meetings at the center.

Noisy neighbor

There is still dissatisfaction with the center in some quarters. Some of the nearby high-rise residents, for example, are still unhappy with efforts to control noise.

Leader among them is Sam Bren, former chairman of the Waikiki Neighborhood Board and still a member. "A month ago they had an indoor event that they didn't think would get out to the neighborhood but it was hitting my lanai at 69 decibels," said Bren, who monitors the center with a noise meter.

"They (the center developers) never had any regard for the potential impact on the neighborhood," he said.

Still, Bren is not a critic of the center itself. "Under proper management, -- which in my estimation does not exist -- properly merchandised by people of knowledge, the center can be one of the greatest attractions Honolulu could have," he said.

The center's supporters hope that tomorrow's open house will help win over some skeptics.

The open house includes a look at the center's $2 million worth of art, most of it commissioned from local artists. It will also be the first opportunity for the public to see the new children's art show, where intermediate-level students from throughout Hawaii will have their works displayed for a year.

Opening its doors

Bullet What: Open house at Hawaii Convention Center

Bullet When: Noon to 4 p.m. Saturday June 19

Bullet Where: Atkinson Drive at Kapiolani Boulevard

Bullet Access: No parking at the center. Free shuttle buses will run to the center from the University of Hawaii athletics parking structure. Parking is also available for $2 at a parking garage at 1601 Kapiolani and a parking lot at 1637 Kapiolani

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