[ OUR OPINION ]
New marketing plan
may boost tourism
EVEN though anticipated, the Hawaii Tourism Authority's decision to spread the state's marketing dollars among several organizations must be a blow to the agency that has long been the dominant promoter of travel to the islands. Nonetheless, the Hawaii Visitors & Convention Bureau will likely weather the change. At the same time, the state's life-blood industry may get a boost through fresh strategies for drawing tourists.
The Hawaii Tourism Authority has cut the HVCB's share of visitor promotion contracts.
The bureau has been under fire since July 1 when an auditor's report slammed HVCB for misspending state funds and questionable accounting practices. However, even before the report was issued, the authority had decided to separate its marketing contracts to target specific geographic areas.
When HTA announced its contract awards last week, HVCB became one of five recipients, retaining a deal to sell Hawaii in the North American market, which, to the bureau's credit, has seen strong growth since 9/11. It also will continue to work to attract business travelers for events not tied to the Hawai'i Convention Center.
Although HTA has not specified the value of its new contracts, neither of HVCB's will total the kind of state funds the bureau has received in the past -- $33.2 million this year alone -- and it is apparent it will have to make some internal cost adjustments for its operations, including layoffs. Officials should view this as a chance to retool the century-old agency that initiated tourism promotion in 1903 with a $15,000 budget.
HTA's new approach divvies up the globe, hiring companies based in the locations they will cover. It makes sense to engage a Japanese advertising firm to market in Japan and a European outfit to deal with the continent. But while these enterprises may be familiar with their areas, they may not be keenly knowledgeable about Hawaii's attractions and assets.
That's where HVCB's continued involvement is pivotal. The bureau possesses an institutional history of tourism promotion and the authority correctly recognizes this, setting up guidelines for the transition with the bureau, whose cooperation it will need.
Along with this shift in how Hawaii is sold to visitors, the authority should set up a process to better determine how effective its contractors are, measuring how much bang it gets for each buck. HTA should take steps to assure that its funds are spent properly since the audit also faulted the authority for neglectful oversight.
In addition, the authority's decision-making process ought to be more open. Although its dealings are with private organizations, as an entity of state government, its votes, considerations and discussions should not take place behind closed doors. It represents taxpayers as well as the industry that feeds the state's bank account.
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Jones Act merits
CONGRESS approved legislation last year allowing Norwegian Cruise Line to sail its foreign-built ships under a U.S. flag in Hawaii waters, but Rep. Ed Case has more ambitious goals. Case has introduced bills that would exempt Hawaii from all requirements that only American vessels be allowed to transport passengers and goods between U.S. ports. His proposal should prompt a new examination of the 83-year-old Jones Act.
Rep. Ed Case has proposed exempting Hawaii from a law that limits shipping between domestic ports to U.S.-flagged vessels.
One of Case's three bills would exempt all noncontiguous U.S. locations from the Jones Act, a second would exempt only Hawaii and the third would exempt Hawaii agriculture and livestock. Senator Inouye, who authored the Norwegian Cruise Line exemption, says the Jones Act "has served Hawaii well." His opposition to the Case bills should not prevent a fresh look at the effects of the protectionist policy that Case maintains is an anachronism today.
Case says the legislation would "break the stranglehold" that domestic shippers -- Matson Navigation Co. and Horizon Lines (Sea-Land) -- have on Hawaii's economy, forcing consumers to pay for rising cargo prices. He says more competition also would help the neighbor islands' ranchers transport their cattle to the mainland without having to "go through a myriad of bureaucratic, cost-magnifying gyrations to get their product eventually to their U.S. markets."
Critics of the Jones Act have long attributed Hawaii's cost of living to high freight costs resulting from lack of competition. Rob Quartel, a former Federal Maritime Commission member and head of the Jones Act Reform Coalition, maintained that Hawaii families' budgets are 40 percent higher -- $3,000 a year -- than those of mainland families because of those costs.
Former Matson Navigation Co. president Robert J. Pfeiffer insisted several years ago that freight rates between Hawaii and the mainland have been reasonable. He also asserted that virtually every other significant maritime power has a similar policy. Case maintains that "most of the world's shipping is by way of an international merchant marine functioning in an open, competitive market."
Much of the higher cost resulting from the exclusion of foreign ships results from the higher wages to crew members and U.S. maritime requirements. All three of Case's bills would require foreign ships taking advantage of the exemption to comply with U.S. law, including labor and environmental requirements.