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Cancellation blues


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POSTED: Thursday, May 07, 2009

Hawaii's struggling business travel market, which lost more than $97.6 million this year as a result of cancellations, could see the downturn extending past 2012, a panel of travel and business experts said at a Hawaii Business Travel Association event yesterday.

In the wake of the recession and the subsequent crackdown by President Barack Obama and Congress on companies that received emergency government lending, convention, meetings and incentive travelers canceled more than 132 events in Hawaii this year.

More fallout came as some groups from Japan reacted to swine flu fears. And now, large corporate groups have begun to cancel future events.

The National Association of Insurance Commissioners was set to bring more than 1,000 visitors to Hawaii in December, but now is looking to cancel, said John Conching, Hilton's area director of sales and regional vice president of sales.

“;This would send a very negative message because insurance is one of the most important travel subsets for Hawaii,”; he said, adding that Hilton and other members of Hawaii's visitor industry are working to avert the cancellation.

However, it's too late for Hilton to get back the Association of General Contractors (AGC) or the National Medical Association (NMA), Conching said.

AGC would have brought 3,000 to 4,000 attendees to Hawaii in 2011, but has moved the event to 2012 so that the organization will have longer to save for it, he said.

Likewise, NMA, which was slated to hold a group event for 2,000 to 3,000 people in Hawaii in 2012, has pushed it back to 2014 or 2015, Conching said.

“;Even the most pessimistic economists say the economy will turn around in 2010; however, these organizations expect to lose money in 2009, 2010 and 2011 so they'll need longer to stockpile funds,”; he said.

While Marriott has only had a few group cancellations in Hawaii, the state has lost thousands of room nights, said Ed Hubennette, Marriott's vice president for North Asia, Hawaii and South Pacific

“;The losses have been very significant for the state, particularly for the neighbor islands,”; Hubennette said.

Large resorts that are set up to accommodate 500-person dinners and events for thousands cannot survive without group business, said David Lewin, general manager of the Hyatt Regency Waikiki Resort & Spa.

“;They need them to keep their hotels staffed,”; Lewin said.

Earlier in the year, Gov. Linda Lingle, other key politicians and 90 members of the state's visitor industry urged Obama in a letter not to unfairly restrict companies from using corporate meetings or incentive (CMI) travel. Hawaii's letter joined 25,000 sent by the National Business Travel Association (NBTA) and stalled unfavorable legislation, said Shane Downey, NBTA's manger of Government Relations.

Still, Hawaii and Las Vegas have continued to struggle with perception, Downey said. IBM and Hewlett Packard were not part of the Troubled Assets Relief Program, but canceled trips to Hawaii because of how it would look, he said. Competing destinations are aggressively going after these rebookings, Downey said.

“;I've seen advertisements that read, 'Come to our state, we aren't Hawaii,'”; he said.

Because of its dominant leisure brand, Hawaii has long struggled with the boondoggle effect, said Michael Murray, vice president of sales and marketing for the corporate meetings and incentive market for the Hawaii Visitors and Convention Bureau.

“;We were making five steps forward, but now it's like we've taken 10 steps backward,”; Murray said.

Hawaii's visitor industry must offer more to keep and attract group business, he said.

“;We can't go to them anymore with macadamia nuts and say that we want your business—that's not going to work,”; Murray said.