Monahan to head HVCB

The former president of Liberty
House and the short-lived trustee
of Hawaiian Air takes over for Vericella

The appointment of John Monahan, former chief of the Liberty House stores, to lead the Hawaii Visitors & Convention Bureau represents a shift in the bureau's direction amid intense scrutiny over the use of state funds to promote the islands' No. 1 industry.

The bureau's board picked Monahan as its new president and chief executive, replacing Tony Vericella, who resigned three months ago in the aftermath of a critical state audit.

Monahan will receive a $235,000 base salary, roughly the same as Vericella's, with the potential to receive a bonus of up to 50 percent of his salary, if he meets certain targets and criteria.

Vericella, whose primary background has been in the Hawaii tourism industry, received $391,310 total compensation from the bureau in 2001, including bonus and benefits.

In Vericella, the bureau had an intense tourism marketer at the helm who became a lightning rod for criticism over the audit, which faulted the bureau's spending practices as well as the oversight role of the state Hawaii Tourism Authority.

"What we needed was a CEO that can work very well with clients and also be able to share ideas with everyone else," said Tony Guerrero, bureau chairman.

"Tony got into it. He made the plan," said Guerrero. "Look at the results. It worked."

But the bureau's chief executive, Guerrero said, needs to have broader vision. The bureau also noted that Monahan oversaw a $10 million gross advertising budget for Liberty House.

The role of the bureau is changing, with the state poised to remove the nonprofit agency from marketing the islands to international tourists, leaving the HVCB with a focus on Hawaii's tourism stronghold, North America. A group of contractors were selected to specialize in marketing the islands to other countries, and will be accountable to the state tourism authority.

Monahan, who acknowledged that tourism is not his expertise, is planning to hire a senior marketing officer, who will report to Monahan. "I don't believe in being a one-man show," said Monahan, 52.

David Preece, the bureau's former vice president in charge of marketing to North America, left in May to lead the Travel Institute in Massachusetts, and his job has remained unfilled. Monahan said yesterday he intends to fill the position.

Monahan's appointment comes as the bureau faces further scrutiny from a state-appointed special master, accountant John Candon, who was appointed to review the bureau's operations and effectiveness for the Hawaii Tourism Authority.

The bureau needed someone who can explain its mission, how they will accomplish it, and who will be accountable to several groups, including the Legislature, the governor's office and the public, said Stanley Hong, bureau president from 1984 to 1993.

Monahan, no stranger to controversy, ascended to Liberty House's presidency in April 1997, a time in which a weak isle economy and increasing retail competition caused the company to default on its loans, leading it to file Chapter 11 protection from creditors. Critics faulted Liberty House for focusing too much on tourists, and under Monahan, the company restructured to focus on the local market.

"I think everyone knows John Monahan or has heard of him," said Hong.

Liberty House emerged successfully from Hawaii's largest bankruptcy case in 2001 after a tumultuous three-year reorganization, and was quickly sold to Federated Department Stores Inc., to become part of Macy's.

Monahan joined Liberty House in 1990 from the May Company department store chain in Los Angeles.

Earlier this year, Monahan drew attention when he briefly became trustee for bankrupt Hawaiian Airlines, but he stepped down after about three weeks because of a private "medical concern" that later turned out to be a false alarm, Monahan said yesterday.

"He has a very soothing influence," said Tom Roesser, a local attorney involved in the Liberty House bankruptcy. "Even in a difficult situation, he's very calm and people respond to him."

On current topics, such as widespread public concern that the state relies too much on tourism as its main economic driver, Monahan said he aims to find the middle ground between industry supporters and critics. Tourism should provide jobs while not hurting the island lifestyle, he said.

Monahan also said that Oahu, in particular, needs new tourism products, as he pointed to the high-end resorts on the neighbor islands.

Monahan said the visitors bureau, set up as a trade organization for members of the tourism industry, has to understand that the state is its client. Most of the bureau's funds come from contracts with the state, which were worth $151.7 million between 2000 and 2002, a huge increase from the past.

Monahan may find success in one regard: Hawaii is at the top of the list of destinations where American travelers plan to go in 2004, according to a recent survey of American Express travel agents, and the state predicts total Hawaii visitor spending will grow 7.8 percent to $11.4 billion next year.

Hong, former president of the Hawaii visitors bureau, noted that he came into the job without tourism experience, having previously served as vice president-administration and general counsel for Theo. H. Davies & Co.

"I think I said no three times, and finally, there was a lot of arm-twisting going on. Essentially what they were looking for was someone who had executive administrative skills, which I did," Hong said yesterday.

Hong said he was pleased with Monahan's appointment.

"He seems to have a great business acumen," said Rex Johnson, chief executive of the Hawaii Tourism Authority. "He seems to have been in situations very similar to this one, so we're happy to have someone with a resume like John on board."

Monahan said his goal is to maximize Hawaii's marketing message and build the brand in a joint effort with the outside marketing agencies.

"Hawaii is my home, and I wanted to be in a position where I could contribute to the state," Monahan said.

Les Enderton, who stepped in as the bureau's interim chief after Vericella's departure, will continue to serve as executive director of the Oahu Visitors Bureau, his role since 1997.


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