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The future of Hawaii's biggest industry, tourism, is not about numbers. More is not necessarily better. There may be limits to the level of tourist traffic that Hawaii's communities can stand.
The Hawaii Tourism Authority,
Who's who, for how long
which spends $61 million a year,
is getting shoved away
from the hotel industryBy Russ Lynch
rlynch@starbulletin.comIn the rush to keep the numbers up, however, the visitor industry may have lost sight of that, Gov. Ben Cayetano says. So he is pushing to remake the state's tourism board in an effort to get Hawaii's dominant industry to understand that the total worth of tourism to Hawaii's people is more important than the benefits any one segment of the economy might get from it.
It is not a new argument. For at least two decades there has been a widespread feeling that if Hawaii could somehow have half as many tourists with each of them spending twice as much the islands would be a better place to visit and live.
That was part of the thinking behind the 1998 creation of the Hawaii Tourism Authority, funded immediately by a percentage of the hotel room tax. Just two years later, tourism hit a record volume of 7 million tourists with an all-time high of $10.9 billion in spending. Together, it seemed to show that the HTA was doing its job.
Previously, the Legislature had controlled tourism promotion funding to about $25 million for the Hawaii Visitors and Convention Bureau and a few more millions for direct state promotion. The HTA had access to about $35 million and now gets $61 million a year.
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Cayetano wants to bring new influences into play and shift the HTA from what he sees as an organization dominated by the hotel industry into one that has more concern for the community as a whole. He has nominated new faces for six of the 11 voting members on the board. The nominations are subject to confirmation by the state Senate.Cayetano wants to bring in people connected with a broader spectrum of the community, such as banker Larry Johnson; Hawaiian culture expert Alice Guild, who has headed the Friends of Iolani Palace; and planning consultant Nadine Nakamura of Kauai, who is also vice chairwoman of the Housing & Community Development Corp. of Hawaii.
Cayetano said in an interview he wants retailers and others whose livelihood is directly connected to tourism to be represented. One of his nominees is Sharon Weiner, group vice president for business development of DFS Hawaii, a huge tourist-oriented retailer that also sells duty-free goods to international travelers, as part of a multi-national conglomerate.
"Clearly there is a lack of confidence in the way that the HTA is constructed currently," Weiner said. "Whether it's personalities or styles or the structure of the relationships, it's not functioning the way the governor or the state had in mind."
If she is confirmed by the state Senate, she will, like so many of her predecessors, face many hours of unpaid work. Her employer, she said, recognizes that and understands the importance of the post to business overall, she said.
"My company could not be more delighted," Weiner said. "They are totally supportive, no matter how much (of my) time it takes."
Her approach to the HTA to give it the widest influence she can help produce.
"I'm an advocate of balance," Weiner said.
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She said that hotels and other types of business need to fit into what is important overall for Hawaii and retailing and other services are part of the picture. She agrees with the governor that no one sector of the economy should have prominence.Lawrence S. Johnson, former Pacific Century Financial Corp. chief executive and another Cayetano nominee, said his experience has taught him about the importance of tourism, but he understands that changes can be made.
"I do believe that tourism, whether we like it or not, is still the most important segment of our economy," Johnson said. But he said only 16 percent of Hawaii's visitors come to the islands on business.
"The governor has said publicly that he believes Hawaii can be the Geneva of the Pacific," Johnson said, attracting much more in the way of meetings and conventions that will draw business visitors who spend more and contribute more to the local community than the bulk of visitors who come for leisure purposes.
In an interview, Cayetano went beyond that. He said he supports the "Geneva of the Pacific" idea and that means more business conventions and specialized meetings with Hawaii as the ideal place to meet among a wide range of different countries.
But he is concerned about volume, about how much tourism Hawaii can stand, he said, and he is glad that the state Department of Business, Economic Development and Tourism is beginning a study of Hawaii's "carrying capacity."
"Seven million tourists seems like a lot," Cayetano said. "But some of these folks feel we should shoot for as much as 9 million or 10 million. I don't believe that."
His ideal is to have the type of tourist who will spend more time and money in Hawaii, rather than a sheer volume of visitors who stay for short periods of time and spend less.
That is why he supports meetings here such as those of the Pacific Basin Economic Council and the Asian Development Bank, he said.
"Rather than just concentrate on marketing Hawaii as a nice place to go to the beach and sit on the sand and the surf and all that, I think most of us wanted the HTA to develop a plan to take into account what has to be done so that retailers who sell to the tourists benefit also," Cayetano said. "We also wanted the HTA to begin to explore other kinds of tourism -- health, ecotourism, business tourism."
The HTA board's top members have been traveling and were not available for comment, but they have previously said they have been doing all that. They argue, however, that the pressure of just keeping tourism going after a decade of stagnation, followed by a record year in 2000 and the international tourism disaster of late 2001, has not made it easy to pull it all together.
There is widespread agreement that the basis of the HTA structure, dedicated funding coming directly from the hotel room tax, has worked well.
Tourism officials are resigned to the fact that they cannot expect to escape the Legislature entirely. It is funded with tax money, after all. The dedicated funding is capped at $61 million despite the fact that the HTA's share of the 2000-2001 hotel room tax take created a fund of more than $70 million.
Cayetano said the HTA was created to give tourism more flexibility as an industry and separate it from the state government.
Too often in the past, he said, DBEDT directors who controlled the funding were guilty of "micromanaging" the tourism marketers at the Hawaii Visitors Bureau, now the Hawaii Visitors & Convention Bureau.
But he said it nevertheless got dominated to some extent by hotel industry representatives who believed that "what's good for the hotels is good for everyone else."
"The monies that are generated by the TAT (transient accommodations tax) do not belong to the (hotel) industry. These monies belong to the people of Hawaii," said Cayetano.
One of the long-standing hotel representatives on the HTA board, David Carey, president and chief executive office of Outrigger Enterprises Inc., said recently that while hotels do believe that when they do well so does the economy, the role he and other hotel representatives have played on the HTA board has been much broader.
The HTA has been primarily concerned with increasing visitor expenditures, rather than just visitor volumes, he said.
In the end, although the HTA stands to lose one of its most prominent hotelier members, Peter Schall of Hilton Hotels, Keith Vieira, vice president and director of Hawaii operations for Starwood Hotels & Resorts Worldwide Inc., is on the board for two more years.
Carey's term expires at the end of June this year but no replacement has been found, so he stays until Cayetano decides otherwise.
Cayetano said the representatives from the hotel industry on the HTA board have done great work. He just wants to see the authority broaden its attitude and scope.
As for the state "carrying capacity" study, top state economic researcher Pearl Imada Iboshi said nobody should expect it to come up with an ideal number for tourist volume.
It won't do that, she said, but is aimed at identifying infrastructure flaws that might arise in the future, the "bottlenecks" that might create problems as tourism grows, such has how many hotel rooms can or should be built and how the roads and the water supply might be affected.
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Board of directors, and the date their terms expire: Hawaii Tourism Authority
Gary J. Baldwin June 30 W. David P. Carey III June 30 Shari W. Chang 2000* David H. Gleason 2004 Millicent M.Y.H. Kim June 30 Gilbert M. Kimura June 30 Kalowena C. Komeiji June 30 Peter H. Schall June 30 Roy Tokujo June 30 Keith Vieira 2004 Ron Wright 2004
Gov. Ben Cayetano's nominations:
>> Alice Guild former executive director, Friends of Iolani Palace >> Lawrence Johnson former CEO, Pacific Century Financial Corp. >> Mike McCartney former state Senator >> Nadine K. Nakamura planning consultant, vice chairwoman, Housing and Community Development Corp. >> Sharon Weiner VP for business development, DFS Hawaii >> Stephen Yamashiro former Big Island mayor * Holdover
