View Point

By David Kimo Frankel

Friday, May 28, 1999

Corporate welfare,
local style

HOW greedy can wealthy hotel owners be?

First, they demand and receive hundreds of millions of our tax dollars to build a convention center to increase the profitability of a few Waikiki hotels. This is after hundreds of millions of our tax dollars were spent improving the infrastructure of Waikiki.

Then they take money that was used to maintain our parks and police in order to bolster their profits. Funding for essential county services plummeted when the tourism industry took $55 million of our tax money to subsidize their marketing efforts.

When last year's Legislature gave the new Hawaii Tourism Authority a source of dedicated revenue, it significantly reduced the amount of money each county receives from hotel room tax revenue.

That is one reason why this year the counties are facing the prospect of closing pools, increasing trash collection fees and bus fares, and reducing government services.

Next, the tourism industry demands that the state spend our money to expand airports to accelerate tourism, rather than to stop the invasion of alien species through our airports or to stop our airports from polluting our environment.

Now we are being asked to give these foreign- and mainland-owned hotels millions of dollars of tax credits to build new hotels.

When will the rip-off stop?

This year's tax giveaway to build more hotels did not stop there. It also provided that these hotels could delay paying any fees for more than seven years to combat effects of development on such things as sewage, traffic and water use.

You and I would be left paying for roads, sewage infrastructure and water pipes that the hotels need.

What is the logic in giving hotel owners more of our money?

Foreigners or mainland investors own most of these hotels. Why should our tax dollars go to them?

The tourism industry keeps asking for more of our money -- but it fails to produce. Studies not financed by the visitor industry show that for every dollar in direct and indirect infrastructure expenditures by government to support tourism growth, just over 90 cents in revenue is generated.

Occupancy rates for hotels are down. How is adding capacity going to fill these rooms?

Our natural attractions are over- crowded. Hanauma Bay, Punchbowl Cemetery, the Arizona Memorial and Waikiki Beach are already over capacity. Many of Oahu's parks have reached the saturation point.

Occupancy rates are falling in Waikiki because it is overbuilt -- filled with concrete, incredibly high densities and high rises. Build new hotels -- and they will not come.

Tourists do not want to see more hotels. New hotels outside of Waikiki are likely to detract from existing open spaces.

In a recent survey of 1,000 tourists on Maui, 91 percent indicated that preservation of natural areas would be an important factor in their decision to return to the islands.

Seventy-nine percent said that more tourists would ruin the Maui experience. Forty-six percent said they wanted to see more natural coastlines, while only 3 percent said they wanted more luxury resorts.

TOURISTS come to Hawaii because of its natural beauty, open spaces, beaches and undeveloped coastlines -- not to see infrastructure and buildings. If we do not heed their opinions, all of Hawaii will follow the path of Waikiki: explosive growth followed by decreasing occupancy rates and economic collapse. Maui's occupancy rates are far higher because it is less crowded, more natural and less urban.

If our tax dollars must be used to stimulate redevelopment, at least legislation should be narrowly tailored in order to reduce the burden that tourism places on our environment. Renovating a hotel to make it more energy efficient makes more sense than expanding the number of hotel rooms.

Alternatively, tax credits could be offered for moving a hotel mauka from natural shorelines. Moving hotels off the beach helps to preserve natural beaches from erosion, reduces coastal hazards and creates more scenic vistas -- while creating jobs.

When Governor Cayetano visited Silicon Valley recently, business executives told him that the best way to attract capital was not to reduce taxes or regulations, but to enhance the quality of life. Stopping senseless corporate welfare should be the first step.

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David Kimo Frankel is chairman of the
Sierra Club's Hawaii chapter.