Tourist board looks Spending an extra million dollars to attract business meetings would pay off handsomely with added visitor spending next year, according to pitch for more money by the Hawaii Visitors & Convention Bureau.
for money to attract
business meetings
Extra marketing is needed to
counteract downturn, it saysBy Russ Lynch
rlynch@starbulletin.comBut the Marketing Standing Committee of the Hawaii Tourism Authority, which controls tourism spending, yesterday declined to recommend spending the extra money, partly because it could not see where the money could be found.
Extra marketing is needed right now since the outlook for Hawaii tourism through the rest of this year is not strong and next year looks worse, said committee members David Carey and Keith Vieira. Both are in the hotel business -- Carey with Outrigger Hotels & Resorts and Vieira with Starwood Hotels & Resorts -- and keep themselves up to date with bookings.
Tourist arrivals through July are down about 1.5 percent from last year's record-high levels, according to data from the state Department of Business, Economic Development and Tourism. The key visitor days statistic -- the number of tourists multiplied by the average length of stay -- is almost on par, down 0.2 percent.
Carey said expanding the use of the Hawaii Convention Center and business travel in general is a "targeted area" because it produces demonstrable results and substantially more income than leisure tourism does.
However, the committee voted 5-3 not to recommend the extra $1 million to the Budget Committee. It did unanimously recommend increasing the budget for the Hawaii Visitors & Convention Bureau by $2 million, to a total of $47 million, with the extra money going into the overall budget used to promote meetings, conventions and incentive-travel.
Several members wanted more money and said marketing directly to corporations and associations that hold meetings is a proven fast way to get the best return for the marketing dollar, benefiting all islands because conventioneers usually travel to islands other than where their meetings take place, and spend more money than leisure tourists.
The committee left the leisure-marketing budget at $39 million, the annual level of the past two years. Later yesterday, the HTA's budget and finance committee endorsed the same recommendation, adding $2 million for conventions marketing but leaving out the suggested additional $1 million.
For now, the HVCB, as the sole marketing contractor to sell Hawaii tourism for the tourism authority, has an annual budget of $45 million. That runs through June 2002, the end of the current fiscal year, and the HVCB contract with the authority runs through the 2002 calendar year.
The budget includes $6 million for meetings, conventions and incentive-travel marketing.
Last week, the HVCB was asked to prepared a prognosis of what would happen in three scenarios -- keeping the funding at the $45 million in its contract, reducing it or increasing it.
Tony Vericella, HVCB chief executive, told yesterday's meeting that because of the downturn in the national economy, business meetings are a harder sell and keeping the meetings, conventions and incentive-travel budget at the current level of $6 million would actually result in a downturn in 2002. He said there would be 31 fewer bookings, 257,500 fewer nights in island hotels and a drop of $218.6 million in visitor spending.
Taking $2 million out of the $39 million leisure budget and putting it into marketing meetings could cut combined 2002-03 leisure-tourist spending by a little over half a percent, or a $110 million, but spending by leisure tourists would still be about $20 billion through the two years.
Keeping the leisure-market budget at $39 million and pushing the meetings, conventions and incentives marketing budget up to $9 million -- the existing $6 million plus the recently approved extra $2 million and the newly proposed $1 million -- would produce 225 new leads to likely meetings business, 56,000 new hotel bookings and $47.5 million in added visitor spending in 2002 alone.
That scenario calls for $4 million to promote the convention center to its core markets, a flexible fund of $2 million to be used wherever needed to promote business travel and adding another $1 million to the $2 million budget for marketing to corporations that hold meetings away from home.
Coloring the marketing decisions is the fact that the Legislature placed a $61 million cap on total annual HTA spending and the authority has to take care of its own expenses out of that as well as operating the convention center and paying for the HVCB's marketing contract.