More money sought for maintaining convention site
State tourism officials intend to ask lawmakers for more money during the upcoming legislative session
State tourism officials intend to ask lawmakers for more money to maintain the Hawaii Convention Center during the legislative session that begins Jan. 18.
The $300 million center receives just $1 million annually for maintenance, said Rex Johnson, president and chief executive of the Hawaii Tourism Authority, the state agency that governs the convention center.
The agency plans to ask the Legislature to lift a cap limiting the amount of money that the convention center receives from a state tax on hotel room fees, Johnson said.
The room tax generated approximately $199 million in revenue in 2004, and based on the percentage of the tax dedicated to the convention center by state law, the center would have received $32.5 million. But the Legislature has capped the amount that the center can receive at $31 million. So last year the $1.5 million surplus went to the state's general fund.
Of the $31 million dedicated to the center, Johnson said that approximately $26.5 million was used to service debt, and about $3.5 million was used to cover a budgeted operating loss. The $1 million set aside for maintenance of the center is inadequate to keep the facility in shape, particularly as it ages and is likely to require higher maintenance expenses. The center opened in 1998.
"By any stretch of the imagination there's not a property manager in the world who would say you could maintain a $300 million building on a $1 million budget," he said.
The request for more maintenance money appears to be the only potentially provocative item on the agency's legislative agenda this year. Johnson said the authority plans to support legislative packages supporting law enforcement and a Department of Land and Natural Resources push for more money for state parks, but the HTA will not take the lead on those initiatives.
Frank Haas, vice president of tourism marketing for the HTA, said the agency expects marginal growth in 2006. Visitor arrivals are expected to grow to 7.5 million this year from an estimated 7.4 million in 2005. Limiting the growth is a static inventory of hotel rooms, which stands at about 73,000 rooms, and a statewide occupancy rate of more than 80 percent through October of last year.
"There's no room at the inn, so to speak," Johnson said.
Much of the growth in 2006 is expected to come from the cruise industry, which will see the arrival of Norwegian Cruise Lines' Pride of Hawaii in 2006. Arrivals of visitors coming to Hawaii for cruises increased to 240,000 in 2005 from 178,000 in 2004 as NCL launched its second interisland cruise ship, the Pride of America, Haas said. The company's third ship will give it what amounts to 6,800 floating hotel rooms in Hawaii.
Although tourism officials expect little growth in the numbers of visitor, they hope to grow revenue from those who visit by attracting people likely to spend money while they are here. The agency's goal is not necessarily to attract the richest visitors, but rather ones who are most likely to spend money on a variety of activities, such as weddings, golf, cultural events and shopping.
"We don't mean the wealthiest visitors," Haas said. "We want the active visitors."