HVCB to cut
17 positionsThe layoffs, to take place
after December, come as
a result of lost
marketing contracts
The Hawaii Visitors & Convention Bureau will have to drop 17 positions after this year, said Les Enderton, interim president and chief executive, as a result of losing contracts to market Hawaii to Japan, other Asian countries, Oceania and Europe.
The 100-employee bureau must eliminate nine jobs serving Japan, three of which are in Honolulu, and eight jobs in its developing international markets unit, four of which are in Honolulu.
But it is pleased to have held onto the marketing contract for Hawaii's largest source of tourists, the U.S. mainland, said Enderton. North America represents about three-quarters of Hawaii's visitor industry, so the HVCB is optimistic about its future, he said.
The layoffs will take place after December, when the bureau's current contract expires, Enderton said. Some workers may find jobs elsewhere with the bureau, depending on the results of a reorganization. Enderton noted the bureau needs all of its employees to continue during their jobs during the transition process.
The bureau previously let go of a dozen employees after losing the contract to market the Hawai'i Convention Center, and several of the workers ended up with the Philadelphia company that took over the duties, SMG.
The HVCB is keeping its contract to market to business travelers for venues other than the convention center.
In response to harsh world events, from terrorist attacks to the war in Iraq to SARS, isle tourism officials have focused their short-term efforts on bread-and-butter markets, tourists in the United States and Japan. However, officials have expressed optimism over the long-term potential of other markets, including the United Kingdom, Germany and South Korea.
This year, the Hawaii visitors bureau is spending $20.6 million, or 62 percent of its $33.2 million leisure marketing funds, to market Hawaii to U.S. mainland travelers. The bureau is spending $9 million, or 27 percent of its funds, to promote to Japan.
Hawaii's visitor arrivals from U.S. cities rose 2.8 percent in the first half of the year. International arrivals fell 11.4 percent.
The Hawaii Tourism Authority board awarded the four-year marketing contracts in a unanimous vote Thursday afternoon behind closed doors, and announced the results yesterday morning.
Mike McCartney, chairman of the authority and former state lawmaker, said the HTA did what was best for Hawaii, and has a fiduciary responsibility to taxpayers.
The authority must now negotiate the exact dollar amounts of the contracts, which start in January. Meanwhile, planning for 2004 marketing programs will begin immediately, the authority said.
The HVCB had well-heeled competition in the bidding this year.
Dentsu Inc., Japan's largest advertising agency and a major marketing and communications firm, won the contract for Japan. A public company headquartered in Tokyo, Dentsu has worked on Hawaii marketing campaigns for Japan-based travel companies. Dentsu had 5,700 employees as of September.
Marketing Garden Ltd., also based in Tokyo, won the bid to market to other Asian countries. Marketing Garden, part of Transpacific Group, has represented other visitor destinations, including Alaska, Ireland, Indonesia, Turkey and the Northern Marianas. It was retained to rebuild Japanese travel after last year's terrorist bombings in Bali.
The Mangum Group, with offices in Germany, London and Sydney, won the European market, which comprises a small number of visitors for Hawaii.
When the HVCB's worldwide tourism marketing contract ends after December, the bureau will sever ties with subcontractors in the United Kingdom, Taiwan, South Korea, Australia, New Zealand, Latin America and Germany, Enderton said.
The bureau's New Zealand marketing contractor, Walshes World Ltd., bid against the bureau for the Oceania contract and won. Walshes World, with 109 employees, has represented Hawaii in New Zealand since 1978 through a subcontract with the HVCB.
It is unclear what will happen to marketing in Latin American, which was not awarded to any bidder.
Hawaii's four island visitor bureaus -- on Oahu, Maui, Kauai and the Big Island -- will remain, and all of the new marketing organizations will be expected to work with the individual bureaus to coordinate statewide and islandwide programs.
It will be a whole new process, and open lines of communication between Hawaii's multiple marketing entities will be critical, especially if disaster strikes the travel industry again.
The bureau is looking forward to working with the tourism authority and with Hawaii's new marketing organizations, Enderton said. "So, no hard feelings," he said.
"I think we need to go into a new era, a new direction, and in light of what's happened, it's timely that it's come about," said state Sen. Donna Kim (D, Kalihi Valley-Halawa), who called for an audit of the visitors bureau.
That audit, released early this month, was immensely critical of the bureau and of the oversight role of the state tourism authority. Tony Vericella, the HVCB's six-year chief executive, resigned this week.
The authority plans to appoint an independent master to review the bureau's operations and will conduct a more in-depth audit, all to be completed this year.
