Lower tourism
forecast will still
make isle hotel
operators happy

By Russ Lynch
Star-Bulletin

Lower targets set by the Hawaii Tourism Authority for 2001 are not only realistic, they're optimistic, tourist industry officials say.

Hotel operators say they will be delighted if they can reach the new lower targets, and hope the Legislature will OK extra promotion money for what now looks to be a tough year.

"We'd be thrilled to meet those targets," said Perry Sorenson, chief operating officer of Outrigger Hotels & Resorts. "I think, given the circumstances as we know them today versus last October when we were doing our budget, we'd be thrilled."

The Hawaii Tourism Authority told its main promotional agent, the Hawaii Visitors & Convention Bureau, that it has scaled down its goal to a 2.2 percent visitor increase this year and a 0.04 percent improvement over 2000 in the more important statistic, total visitor spending.

"It's an extremely difficult time," Sorenson said. "The whole nature of the world has changed since October or November when we were doing our budgets for 2001."

"There's a whole bunch of issues that are causing people to look at leisure travel in a whole different way," he said.

He cited the fall of the Japanese yen to the point where it takes well over 120 yen to buy a U.S. dollar. Power worries in California -- Hawaii's biggest tourist market -- are contributing to the kind of uneconomic uncertainty that can keep people at home, Sorenson said. So are the fluctuations in the stock market.

"All of those things cause people to say, 'maybe we ought to stay closer to home,'" he said.

Loren Shim, assistant vice president in the marketing division of Aston Hotels & Resorts, agreed.

"Last year, as you well know, was a record. If we can have two years like that it would be great," but given the current booking outlook for the rest of this year "we'd be happy to get anywhere close" to 2000's figures, Shim said.

David Preece, HVCB vice president for North America, said it is important to realize that 2000 was a very good year for tourism -- a record -- and even a tiny increase would make 2001 another record.

"Even if we achieve the 0.04 percent growth (in visitor spending) it would be an all-time record," Preece said. "I don't think it's really a doom and gloom situation."

However it won't be easy maintaining last year's levels this year, he said.

"If you were to go out and ask a handful of hoteliers if they would be satisfied with the levels they had last year, most would say yes," Preece said.

One thing that could help, he said, would be permission to use some of the excess in the state's special tourism fund, above the $61 million cap on the Hawaii Tourism Authority's share of hotel room tax take.

"We can see opportunities under the current circumstances for using incremental funds to help mitigate some of the market problems," he said.

But recognizing that a tough year is already under way, the HVCB isn't waiting for extra money.

"We are making changes in our marketing programs, in the timing," Preece said. "We've moved some things forward in the year to have an earlier impact. We've shifted funds from one program to another.

"And at the same time we've identified some areas where if we had some incremental funding we could put into the market it would help."

Preece went to an Internet travel conference in New York earlier this week where a lot of the issues affecting travel were discussed and said there were some positives for the leisure market. "The economic slowdown hits the business travel market first and more directly than leisure travel," he said.

"Leisure has a much longer lead time (for bookings in advance of travel) and by the time economic setbacks happen, many people have already made their travel plans and paid in advance," he said.

One related factor that came at the conference was evidence that there is an increasing attitude among travelers that a vacation is their "birth right."

Even when times are bad, or maybe because they are bad, many people will say "I gotta get out of here and take some time off," Preece said.

Bob Fishman, HTA chief executive, said the board had to rethink its targets for 2001 in light of such events as the power failures in California, the earthquake in Seattle, a 15 percent drop in the value of the yen and a general decline in the U.S. economy.

With bookings starting to look weaker, the HTA spent the past few weeks working with the industry and tracking the likely pattern for the next few months. It then decided to set more realistic targets for its vendors, Fishman said.

The vendors, mainly the Hawaii Visitors & Convention Bureau for overall tourism promotion and Team Hawaii for sports-related travel, have been told of the new targets but also have been asked what they would do if some extra funds or other help were to become available, Fishman said.

While the HTA believes it can raise tourist head count by 2.2 percent this year -- better than the 2 percent predicted in November and reaching a record total of 7.13 million -- that is not nearly as important as the combination of factors that will have many tourists holding tight to their wallets.

The 10.3 percent rise in visitor spending targeted in November has given way to a new 2001 target of $11.36 billion, virtually the same as 2000.

"That's not say that we're going to accept a lousy situation without doing anything," Fishman said. "The HVCB had already been working on it."

Peter Schall, vice president and managing director of Hilton Hawaiian Village, said high hopes that leisure traffic this year would make up for an already-known shortfall in meetings and conventions, now doesn't look that simple.

"That's why it's a target, not a forecast," Schall said. "Now is the time to do even more aggressive marketing to capture a share of the market. Otherwise you won't even get close to the targets."