RECOVERY CONTINUES AMID WAR FEARS
STAR-BULLETIN / OCTOBER 2002
Hotel occupancy was mostly up around the state in January, but it is still running behind levels seen before the 9/11 terrorist attacks.
State puts war After much debate yesterday, the board of the Hawaii Tourism Authority gave its staff the ability to act immediately to refocus the state's tourism marketing dollars in the event of war with Iraq, without having to wait for approval from the board.
plan in place
The state tourism board OKs
Kauai hotels strong in January
a contingency marketing planBy Russ Lynch and Tim Ruel
rlynch@starbulletin.com, truel@starbulletin.comThe debate revealed a hesitation by some of the board members to give any kind of open-ended approval, even in a time of potential crisis for the state's No. 1 industry. There was a concern about giving state officials "carte blanche" with state funds, said Marsha Weinert, a Maui Visitors Bureau executive who sat on the board yesterday as a representative of Gov. Linda Lingle.
The ever-present talk of war has put local officials in the mode of planning ahead to avoid problems during a crisis.
A war with Iraq, depending on its length and fury, is widely expected to have serious consequences for international travel and leisure travel.
The staff of the tourism authority has written up a contingency plan that calls for the suspension of advertisements to tourists, and for a shift of the advertising dollars to other efforts, such as programs that will encourage airlines not to cancel flights.
The underlying concept is that it doesn't make sense to advertise to tourists in wartime.
But that is about as detailed as the agency's contingency plan gets for now. Too little is known about the size and scope of the pending war, and about the possibility of terrorist attacks on the United States.
The problem is the board needs to give the public six days' notice before it meets.
As such, in the days that follow the outbreak of war or a related crisis, the staff of the authority wants to be able to act, and not wait for the board. Board members Lorrie Lee Stone and David Gleason expressed concern about not being able to review those actions.
At one point in the discussion, HTA Chief Executive Rex Johnson asked whether the staff was going to be able to do its job.
Ultimately the board decided to allow the staff to act, but to keep its actions consistent with the contingency plan, which was approved yesterday by the board.
The board would then have to approve changes in spending retroactively, in a future board meeting.
The tourism authority isn't the only group that is planning ahead.
Yesterday, Ted Liu, director of the state Department of Business, Economic Development and Tourism, told a meeting of businesses that now is the time to talk about payment arrangements with their banks.
"It's better to talk to them now" than when they are really in trouble, Liu said.
Liu and other speakers also said Hawaii is far better prepared for such an emergency now than it was on Sept. 11, 2001.
Liu said the best policy is "stay the course," get on with life and don't overreact to the threat of war.
Tony Vericella, president and chief executive officer of the Hawaii Visitors & Convention Bureau, said there are already some good signs that Hawaii will not suffer as much as after 9/11.
The Japan Association of Travel Agencies promises not to issue a blanket recommendation to Japanese not to travel, as it did after 9/11, "and it will not encourage its members to waive cancellation fees" for Japanese who change their minds about traveling, Vericella said.
As has happened before in times of international crisis, the Japanese and other travelers can be expected to stay close to home and travel within their own regions, Vericella said.
That is likely to help Hawaii with a boost in domestic travel, as Americans opt for Hawaii rather than foreign destinations because it is American and is also recognized as "the essence of peace and harmony," Vericella said.
"We are everything that people are looking for in times of stress," he said.
Brig. Gen. Robert Lee, Hawaii adjutant general and head of the Hawaii National Guard, said businesses should not worry too much about having their employees called up in the event of hostilities in the Middle East or Asia. He said the best approach by concerned small business operators is to talk about to officials who can help.
If a business has a key employee that it completely depends upon for its survival, that person won't need to be called up if arrangements are made in advance, Lee said.
Hawaii Tourism Authority
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Oahu, Maui, and Kauai hotels had occupancy increases in January over last year, but the Big Island's occupancy fell, according to the latest monthly survey by industry consultant PKF-Hawaii. Kauai hotels strong
in JanuaryOverall occupancy also rises,
but the Big Island slipped in JanuaryStar-Bulletin Staff
Kauai hotels had a strong rebound, with January occupancy rising to 63.9 percent, an improvement over 56.5 percent occupancy a year earlier. The Garden Isle's occupancy even fared better than in January 2001, before the terrorist attacks, when occupancy was 63.4 percent.
On Oahu, occupancy rose to 76.8 percent from 69 percent last year. Maui occupancy was up to 74.3 percent from 68.2 percent.
But Big Island occupancy fell slightly to 66.8 percent from 68.6 percent in January 2002. The drop was seen primarily on the Kohala Coast, which had occupancy of 64 percent compared with 68.6 percent last year.
Statewide, overall average occupancy at Hawaii hotels rose 8.3 percent to 73.3 percent from 67.7 percent in 2002, PKF said. Hotels did not fare quite as well as overall state visitor arrivals in January, which rose 11.6 percent from January 2002, but were down from 2001.
The movement in hotel occupancy ultimately had an effect on hotel revenues.
On Kauai, revenue per available room jumped 29 percent to $106.30 per room from $82.66 last year, beating the January 2001 level of $101.91. Room revenue is considered a better financial indicator than posted room rates.
On the Big Island, average room revenue slipped in January from January 2002, down 1.6 percent to $126.07 from $128.05.
Oahu room revenue rose to $81 from $69.73, a solid jump of 16 percent, but revenues still did not approach the January 2001 level of $95.42.
Discounting of room rates after the 9/11 attacks is having lingering effects.
Maui room revenue increased 16.3 percent to $167.33 in January from $143.85 in January 2002. The January 2001 level was $169.55.
Molokai occupancy rose to 64.43 percent from 61.47 percent, while room revenues stayed the same at $56.60.
"The momentum will be needed to help counter the uncertainties of what lies ahead in upcoming months," said Daisy Aio, director of tourism consulting for PKF-Hawaii.
PKF-Hawaii
