Hawaii’s World
MEMBERS of the Hawaii Convention Authority, which is supposed to sunset June 30, are like the proud parents of a wonderful daughter. They are very anxious that she get a good husband. The center is a jewel, now being haggled over by political suitors. How S.F.’s
convention
center worksThe state auditor suggests the life of the Convention Center Authority be extended beyond June 30 if necessary. Governor Cayetano has the further logical thought that its final political location should be under the new Hawaii Tourism Authority.
Fine. But many of us are talking about whether the center will be a white elephant for taxpayers. Early bookings are so few!
Your honors, let me present an expert witness: John Marks is president and chief executive officer of the San Francisco Convention and Visitors Bureau, one of the most respected such organizations in America. He knows Hawaii well.
San Francisco's highly regarded underground Moscone Center, with 441,980 square feet of exhibit space compared to our 200,000, is under his oversight. He says the Hawaii center's place in our organization chart is not nearly as important as clearly defining its role.
In San Francisco, his organization, hotels, the center's operators and key figures in government agree Moscone's role is to attract guests to the city's hotels -- even if Moscone itself may lose a few million dollars a year in the process.
After all, each hotel visitor pays a 14 percent room tax plus the room rate and patronizes San Francisco eateries, shops and transportation. The room tax alone brings in $163 million. Last year Moscone generated 900,000 hotel room nights.
A contrary philosophy, which Marks rejects, is that the center should be required to break even on its operations, in part by catering to local events that don't help hotel occupancy. Moscone accepts very few. An exception is the annual San Francisco auto show staged near Thanksgiving, a low time for conventions.
Marks also would avoid lowering standards to fill up early. To accept events now that we may turn down later can create bitterness. Marks considers Hawaii such an attractive destination that we can achieve full, quality usage of the center with effective marketing on one hand and effective operation of it on the other.
I asked about conventions smaller than the big ones the center is meant to lure. He said Moscone accepts small groups (say, of a few hundred) only when they can fit into a portion of the hall unused by a major convention -- and are not allowed to prevent major bookings. Management discretion should be allowed, but the goal of luring big conventions should remain paramount.
Who will pay for our center's operating losses? Governor Cayetano suggests adding one-half percent to our present 7.5 percent Transient Accommodations Tax (TAT). Cayetano is so much in favor of the loss leader approach that he would allow convention booking negotiators (who, I'm told, should have some of the talents of used car salesmen) to offer free space to conventions of major importance to Waikiki so long as Hawaii reaps other benefits in exchange.
The state also must pay off the $350 million in bonds sold to build the center. Since the center was built on time, on budget, these are anticipated amounts peaking at $40 million a year -- but an effort may be made to stretch out the repayment period. It would be a major step backward to defray this debt from the approximately $60 million a year in funds granted last year to the Tourism Authority to use to promote Hawaii.
A.A. Smyser is the contributing editor
and former editor of the the Star-Bulletin
His column runs Tuesday and Thursday.