Oahu and Big Island
gain from fed grantThey got $772,000 in federal
funds for tourism marketing
A unique federal grant, intended to help Hawaii's economy recover from the effects of Sept. 11, 2001, has been working behind the scenes this year to ease the suffering of Oahu and the Big Island during the downturn in tourism from Japan.
The Economic Development Administration of the U.S. Commerce Department has given the Hawaii Visitors & Convention Bureau $772,000, to which the bureau added $1 million and 16 travel wholesalers added $1.5 million of their combined resources to come up with a multifaceted tourism marketing campaign.
The campaign kicked off in December, picked up full steam in January and will run until the end of next month.
The bureau sought the fund from the Economic Development Administration, which awarded the grant in September 2002 as an economic adjustment project, said A. Leonard Smith, the administration's regional director in Seattle. No other place has received a grant like this, he said.
Common campaign
Travel wholesalers taking part in Hawaii marketing campaign:America West Vacations
American Airlines Vacations
Apple Vacations
Certified Vacations Group
Classic Custom Vacations
Expedia
Funjet Vacations
GoGo Worldwide Vacations
Happy Vacations
MLT Vacations
Pacific Escapes
Pleasant Holidays
Runaway Tours
SunTrips
Travelocity.com
United Vacations
There is no hard data showing the benefits of the campaign yet, since it isn't finished. Anecdotes suggest that Oahu and the Big Island are benefiting from a broad campaign that is reaching Hawaii's strongest market for tourists, North America, said Brigid McDonnell, director of North America travel trade marketing for the Hawaii visitors bureau.
Arrivals from U.S. cities have made up 70 percent of total visitor arrivals to Hawaii this year, according to the state Department of Business, Economic Development and Tourism. World events have caused people to keep their vacations within their country.
The federal program was for Oahu and the Big Island only because those islands have the largest percentages of Japanese visitors, and Japanese arrivals were hammered by the effects of the terrorist attacks, said Tony Vericella, president and chief executive of the HVCB.
The federal funds were meant to aid recovery from the attacks, though the use of the funds coincided with the war in Iraq, the outbreak of severe acute respiratory syndrome, a weak Japanese economy, and other events that have continued to depress Japanese arrivals to Hawaii this year. Last month, Japanese arrivals to Hawaii fell 37 percent from last year, and dropped 43 percent from 2001, according to preliminary state data.
Oahu's visitor arrivals were down 3.2 percent in the first four months of this year compared with 2002. "It might have even showed more of a decline if this campaign hadn't occurred," McDonnell said. The Big Island's arrivals have been nearly flat.
Kauai arrivals have also been flat, but Maui arrivals have risen nearly 10 percent year over year, according to the state.
Japanese visitors made up 31.2 percent of Oahu arrivals this year and 15.4 percent of Big Island arrivals, but only 6.5 percent of Maui arrivals and 6.2 percent of Kauai arrivals, according to state data.
The U.S. Economic Development Administration's Seattle region, which includes Hawaii, Alaska, Arizona, California, Idaho, Nevada, Oregon, Washington, and several Pacific islands, doles out approximately 300 grants a year, totaling $80 million to $150 million, Smith said. Grant projects range from economic adjustment programs, which help areas recover from economic damage, to public works programs. The feds typically fund half of a project's cost.
The grant to the Hawaii visitors bureau is meant to spur jobs for Hawaii's No. 1 industry, tourism, Smith said. "If we can bring the industry back then we can put people back to work," Smith said.
The nonprofit bureau, funded by the state, was required to match the grant, which it did, and then some.
The bureau went to Hawaii tour wholesalers and requested proposals for complete marketing campaigns, including direct mail and online marketing as well as advertising. The bureau received about two dozen proposals, McDonnell said.
Once the individual marketing campaigns were approved, the wholesalers initiated campaigns with their own funds, and will be reimbursed when they show performance results to the visitors bureau after the end of July, McDonnell said. The bureau wants to see 5 percent to 10 percent growth in sales from last year, or that same level of improvement over expected business this year, as a result of the campaign.
Pleasant Holidays estimates that its Oahu and Big Island business is up 15 percent from last year. Ken Phillips, vice president of Pleasant's corporate communications and promotions, said the overall joint campaign has helped Hawaii.
More joint programs would be useful, Phillips said.
Travel wholesalers are increasingly reaching out directly to consumers, Phillips said. Internet-based travel agency Expedia Inc. bought wholesaler Classic Custom Vacations, which sells Hawaii vacation packages, last year for $78 million. The purchase expanded Expedia's position as a marketer of vacation packages, Expedia's chief executive said at the time.
The federal campaign comes on top of the $3 million that Pleasant has budgeted for Hawaii advertising at this time of year, Phillips said.
The Hawaii visitors bureau is spending $20.6 million, or 62 percent of its $33.2 million total marketing funds this year, to market Hawaii to U.S. mainland travelers. The bureau is spending $9 million, or 27 percent of its funds, to promote to Japan. All other markets are receiving a combined $3.6 million.
