BY KIP AOKI AND CINDY ELLEN RUSSELL / KAOKI@STARBULLETIN.COM AND CRUSSELL@STARBULLETIN.COM
By putting the vast majority of its
sports marketing budget into the Pro Bowl
and six pro golf events, has the Hawaii
Tourism Authority put too many
eggs into one basket?
As thousands of fans pack Aloha Stadium today to watch the best NFL players compete in Hawaii's big game of the year, tourism officials are throwing their own ball in the air trying to determine which play will help them score big in the highly competitive sports marketing arena.
It's a big stakes game, where only the winning destination sees the money.
If Hawaii's tourism officials successfully negotiate a Pro Bowl contract with the NFL, the state will get all the fans, the hotel bookings, the travel kickbacks and the economic impact that this high-level spectator event brings. Last year, the game brought more than 18,000 visitors to Hawaii and generated as much as $28 million in visitor spending, as well as $2.7 million in state taxes, according to the Hawaii Tourism Authority.
But hosting the big name event comes with a big price.
This year, officials will pay $5.3 million to host the Pro Bowl -- that's about double what they spend on any other event. The state also will spend $2.1 million to bring six PGA golf tournaments to Hawaii and will divide an additional $585,000 among 10 other events.
If the HTA funds a large Pro Bowl contract; it means the authority will have less to spend on developing new sports tourism products. Events like the Honolulu Marathon and soccer tournaments attract more visitors by offering amateur athletes the chance to play their sport against Hawaii's coveted backdrop of blue skies, clear water, and swaying palm trees.
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Some argue the state should do more to promote events like the Nissan Xterra World Championship, which takes place on Maui, that showcase Hawaii as a destination.
"The Hawaii Tourism Authority is really doing a lot of soul searching," said member Stephen Yamashiro. "What is the role of the Tourism Authority and what direction should we be taking as far as the expenditure of our funds? A lot of people are asking questions because there is a lot of money at stake."
It's the $5.6 million question, Yamashiro said, citing the Pro Bowl's 2005 price tag, as HTA officials attempt to formulate a strategic plan that capitalizes on the increasing popularity of sports tourism, yet also includes NFL and PGA level signature sports.
Lifestyle sporting events like marathons, bike races and surfing contests and amateur group contests like AYSO soccer, which last year brought more than 200 teams to Hawaii during a soft month, are all part of a $60 billion plus global interactive sports market that offers Hawaii tremendous tourism potential, said Tom Kiely, chief executive officer of Team Unlimited, which runs the Nissan Xterra World Championship triathlon.
Kiely, former vice president of marketing for the Hawaii Visitors & Convention Bureau, developed the privately funded Xterra eight years ago to boost Maui's tourism by bringing more visitors to the island during a traditionally soft season. Last year, the 450-participant event brought 2,200 visitors to Maui and contributed $5 million to the island's economy.
"Hawaii is unique on earth and the growth of Xterra has a lot to do with that," he said. "People wouldn't care if it was in Cleveland. It's the same with the Honolulu Marathon."
The Honolulu Marathon, which has brought as many as 22,000 visitors to Hawaii in the past, has been estimated to have an $81.6 million impact on the state's economy by Hawaii Pacific University, said Pat Bigold, marathon spokesperson.
The marathon is not only a premier world sporting event, but it attracts Japanese tourists, the state's highest spending visitors, at a soft travel time, he said.
Despite its size and importance to the state, Honolulu Marathon officials have not sought state funding since the 1990s, said Jim Barahal, president and CEO of the event.
"We have a positive relationship with the HTA and we have had intermittent talks, but there is no urgency on their part to work with the marathon," Barahal said. "The state is fearful of losing the Pro Bowl, but they are not fearful of losing the marathon. It can't move to Orlando."
The Pro Bowl and golf create such a sports marketing monopoly that it's almost too much trouble to apply for what little funding is left, Barahal said.
GEORGE F. LEE / GLEE@STARBULLETIN.COM
Miami Dolphin Ricky Williams flashed the shaka sign after scoring his first touchdown of the afternoon in last year's Pro Bowl at Aloha Stadium. While hosting the game brings enormous exposure to the state, some question the cost in light of Hawaii's total budget for sports marketing.
While it's true that a large chunk of the sports funding is already committed by contract, the HTA gets dozens of requests for funding, said Frank Haas, HTA marketing director.
"We just don't have a lot of discretionary funds," Haas said, adding that deciding where sports dollars should go is a challenge.
"At the end of the day, it's all going to come down to numbers," said Marsha Wienert, Gov. Linda Lingle's tourism liaison.
The state has to balance its big-name sports spending against a need to seek out opportunities to create sporting events that will bring more first-time visitors to the state and can be timed to boost travel during May, June, September and December, which are traditionally the state's slower months, Wienert said.
"My personal thought is that there should be a mixture of spectator events and participatory sports," Wienert said. "Participatory sports put heads on beds when we need heads on beds and help the state to generate new business during soft times."
Some members of the authority and tourism industry think the decision is too big a job for the entity. With more than 276 sports commissions located throughout the United States vying for a piece of this market, it's time Hawaii stepped up its game by creating its own agency, said Mark Rolfing, a former HTA member who is helping negotiate the Pro Bowl contract.
"The reality of the situation is that some of the bigger sports marketing destinations around the country are very proactive right now, and we are dealing with increased costs for sporting events and revenues that are fairly flat," Rolfing said.
"It's difficult out there. It takes experience and money to make things happen," Rolfing said, citing a 45 percent drop in the number of golf events televised since 1987.
With nearby destinations like San Diego courting and winning major NFL and PGA tour events, Hawaii needs to form a sports commission to protect the state's interests. And the entity needs to be in place quickly so the state benefits when the Olympics come to Beijing in 2008, Rolfing said.
"There's enormous competition out there," he said. "Sports marketing is an entrepreneurial business."
A sports commission would help leverage the state against competitors by giving contract negotiators the latitude to deal with public and private funds, he said.
"We can't rest on our reputation. Audiences are getting younger and more active. They want to play golf where Tiger Woods played, they want to surf where the stars have been," Rolfing said. "The more big name sports stars we get out here, the more confirmation that Hawaii is a great place."
Forming a sports commission, which the HTA discussed previously, has come up again as the authority puts together it's next five-year plan, which is due mid-year, said Nadine Nakamura, chairwoman of the HTA planning committee
"We are recognizing that if we really want to work with this market, that we need a separate entity," Nakamura said, adding the HTA sees potential in sports events that generate longer stays and more spending for the industry.
HTA member Sharon Weiner said she's not sure if adding another layer of government would benefit the authority.
"I'm not entirely convinced it's what we need, but if it's what people want, I would explore the concept," she said.
The Pro Bowl is important, but so is attracting sports events that bring families to the islands. There is also merit in developing international events like a round-robin elimination baseball tournament that could draw participants from Japan, China, Taiwan, Korea, Mexico and the mainland, said Steve Bretschneider, the state Department of Business, Economic Development & Tourism's chief marketing officer.
"If you look at the sports we already have, we need more variety and more diversity," Bretschneider said, adding the state's quest to develop new products should not obscure the importance of its commitment to the Pro Bowl, the PGA tour or downplay the impact of events like the Honolulu Marathon.
"There's always a question about where to put your resources when they are limited, but Hawaii doesn't want to step away from the Pro Bowl, because the state would never get another chance to get it back," he said. "It's the cost of being a leader -- it's the opportunity to be the No. 1 destination hosting the No. 1 sport in America."
