Visitors bureau coping In the short term, the Hawaii Visitors & Convention Bureau is losing $2 million from this year's tourism marketing contract to a cut by Gov. Ben Cayetano.
with loss of funds
The agency may also lose
its contract to market
the Hawaii Convention CenterBy Tim Ruel
truel@starbulletin.comIn the long term, the bureau is trying to make sure it doesn't lose another $4 million. That's what would happen if the HVCB loses the contract to market the Hawaii Convention Center. A new state law, pushed late in this year's legislative session by Sen. Donna Mercado Kim, requires that the operator of the convention center also serve as its marketer, starting in 2003. SMG Corp. of Philadelphia is contracted to operate the convention center until June 2003.
The new law is not all black and white. Existing contracts could take precedence, according to Rick Humphreys, former executive director of the state Hawaii Tourism Authority. Under that interpretation, SMG can stick to its management contract, without having to market the convention center, through next June.
The result: The Hawaii Tourism Authority has less than five months to find someone to market the convention center during the first half of next year, whether it's the HVCB or another firm.
The board, full of several newly appointed members, hasn't decided on the process for picking the contractor, said Lloyd Unebasami, chief administrative officer of the authority. "We've got to do it in a couple months because it will take time," Unebasami said.
The HVCB would have to cut staff if it loses the convention center marketing contract, said Anthony Guerrero Jr., chairman of the HVCB and executive vice president of First Hawaiian Bank. The bureau employs about 15 to 20 people to market meeting, convention and incentive travel.
The bureau also has a $39 million-a-year contract with the HTA to market Hawaii as a tourism spot. That contract is being cut to $37 million this year, the result of Cayetano's line-item veto.
Cayetano announced in June that he would eliminate $5 million from the HTA's $61 million budget for fiscal 2003. In turn, the HTA has asked the bureau to remove $2 million from its budget for the rest of this year, said Tony Vericella, chief executive of the HVCB.
The bureau's contract to market Hawaii runs out at the end of 2002, though HVCB officials are discussing a one-year extension with the HTA. The goal is to wrap up negotiations by October, said Frank Haas, consultant to the HTA.
For 2003, the HVCB would face a cut of $2.6 million, Vericella said. He emphasized that the numbers haven't been set in stone. The main goal is to decide how much the bureau will cut from marketing Hawaii to visitors in each area of the world.
It's not clear if layoffs will be necessary at the HVCB because of the budget reduction, Vericella said.
HVCB officials, who met yesterday with the Star-Bulletin editorial board, say the new law doesn't make sense. While the HVCB has only been responsible for booking 10 percent of the events at the convention center, its bookings generate 90 percent of the center's revenue, Guerrero said.
Sen. Kim could not be reached for comment yesterday.