HVCB’s
contract shrinksThe tourism authority gives
other agencies the marketing
mission in Europe and AsiaThe embattled bureau retains
its mandate to attract visitors
from North America
The Hawaii Visitors & Convention Bureau, for the first time, will lose its state contract to market Hawaii to Japan, other Asian countries and Europe, though the bureau will keep a contract covering the rest of the world, including North America, according to industry sources.
The state Hawaii Tourism Authority board has split up the state's tourism marketing contract and has awarded parts of it to three separate organizations, as well as the Hawaii visitors bureau, the source said. The state must now negotiate the dollar amount of the contracts with the bidders and establish a transition phase, which will be a critical process.
STAR-BULLETIN / JUNE 2001
Japanese tourists, such as these newlyweds poolside at the Hyatt Regency Waikiki Resort and Spa, are critical to Hawaii's tourist industry. The embattled Hawaii Visitors & Convention Bureau is losing its contract to market Hawaii to Japan, as well as to other key markets.
Dentsu Inc., Japan's biggest advertising agency, was selected to market Hawaii to Japan, the source said. Marketing Garden, another Japanese company, was selected to market to other Asian countries, the source said. The Mangum Group was selected to market to Europe, a separate industry source said. Unlike the nonprofit Hawaii visitors bureau, the other organizations are for-profit companies.
The tourism authority board met for about three hours yesterday behind closed doors and reached a unanimous decision in the afternoon to break up the contract. The authority, which has been notifying bidders, is scheduled to announce its decision this morning at its Waikiki headquarters.
The bureau, a century-old private organization for the tourism industry, has always held the state pact to market Hawaii to the world. Only after the formation of the HTA in 1998 has the bureau faced competitive bidding. This year, the bureau's contract for tourism marketing is worth $33.2 million.
Tony Guerrero, chairman of the bureau, declined comment yesterday afternoon. Les Enderton, the bureau's interim president, could not be reached for comment.
In September the state authority's board approved the process of spinning off separate marketing contracts to cover specific parts of the world.
Ten bidders made it to the final interviews, which occurred behind closed doors last month. The authority's marketing committee made a recommendation to the board which was reached in conjunction with an advisory committee of the tourism industry.
The tourism authority board sided with the marketing committee's recommendation, though it also set up guidelines for the transition process.
The bureau was also selected to keep its contract to market Hawaii to business travelers for events outside of the Hawai'i Convention Center. A state law forced the bureau out of marketing the convention center this year.
The bureau's fate took a turn when it was hit by a damning state audit July 1 that said the HVCB had misspent state funds and awarded a lucrative contract to an insider. The audit, conducted by Nishihama & Kishida for the state, has prompted:
>> A preliminary investigation by the state attorney general's office.Yesterday, the authority's board approved spending up to $300,000 on a more in-depth audit of the HVCB and up to $200,000 to appoint an independent special master.
>> The resignation of Tony Vericella, the HVCB's top executive.
>> A further audit by the Hawaii Tourism Authority.
>> The appointment of a special master to review HVCB's operations.
>> The threat of a joint House-Senate investigative committee, with subpoena powers, which could form during the 2004 legislative session.The move allows the authority to spend $150,000 of its $61 million budget to contract an audit with the same company that worked on the previous audit of the HVCB. If needed, the authority can spend an additional $150,000.
Hawaii Tourism Authority
Hawaii Visitors and Convention Bureau
Dentsu Inc.
Marketing Garden
The Mangum Group
