Amid upheaval, Hawaii’s tourism company restructured: Journey Weekly

The Hawaiian word huliau roughly translates to a time of transformative change, especially a time when progress results from remembering lessons from the past.

The Hawaii Tourism Authority (HTA), as the representative for the tourism industry of the state of Aloha, is deep in a phase of Huliau. This summer, the agency has repositioned itself under new management, with a focus on the balance between destination management and destination marketing.

The biggest shock, however, came from state legislation, which completely redesigned the agency’s funding.

In 2019, a year that Hawaii welcomed a record 10.4 million visitors, calls were already mounting to combat the impact of tourism on residents. Then Covid-19 struck and tourism practically stopped for seven months. Residents basked in traffic-free streets and unimpeded access to beaches and hiking trails.

Then, driven almost entirely by mainland tourism, the visitors rushed back to the islands. In June, monthly attendance was 84% ​​of its 2019 level. But pandemic logs meant fewer shops and attractions were open, and those with limited access created long lines and frustration.

John De Fries

John De Fries took over as CEO and President of HTA in September and began implementing a 2020-2025 strategic plan based on four pillars: natural resources, Hawaiian culture, community and brand marketing. One initiative that has already started is to create community-based action plans for destination management for each district.

In July, De Fries announced a reorganization in the top echelons of HTA to better focus on destination management, including the creation of a position as Chief Brand Officer and a new position as Director of Planning to oversee the execution of management plans.

While plans and reorganizations were underway, state lawmakers heard from residents about the headache of tourism. There were protests against traffic to a popular Oahu beach, community gatherings over traffic collisions along Maui’s Hana Highway, and outrage over social media posts of tourists harassing an endangered Hawaiian monk seal.

The return of visitors to Hawaii was accompanied by renewed complaints from tourists harassing wildlife such as sea turtles and Hawaiian monk seals. Photo credit: HTA / Tor Johnson

For years, the state legislature has been discussing the containment of HTA, which was financed by a fixed payment from the Transient Accommodation Tax (TAT). It now had the momentum and votes to pass a new funding bill and lift a governor’s veto.

“There are many people in the public who are calling for HTA to be reduced, even to be phased out and forced to market to the private sector,” State Representative Richard Onishi said at an HTA meeting in April. “It goes back to this edition of what HTA is supposed to do, and that’s a message that I don’t think is getting well communicated.”

While the finances for the current financial year are largely unchanged thanks to a combination of pandemic aid from the federal government and the continuation of part of the TAT, the HTA needs legal approval for its annual budget from next year.

“Now that it has become law, the staff and I are determined to make it work,” said De Fries. “Fiscal 2023 is going to be a whole new ball game. Nothing has been used for HTA and we need to get our arguments through as we intend.”

Those associated with the hospitality industry refer to the steps as short-sighted as HTA’s marketing efforts will be important as the state works to win back its international and group visitors.

“Two of your key high-spending customer segments are still new to travel and it makes sense to cut resources on HTA now,” said Keith Vieira, hospitality consultant who is one of the original HTA board members. “We take our hands off the steering wheel.”

Legislators have also stripped the HTA of its power to award, which has limited its ability to launch new contracts and campaigns or to address sudden developments like the pandemic.

“It will really tie their hands together in terms of their ability to deal with any crisis they face, human or natural,” said Mufi Hannemann, president of the Hawaii Lodging and Tourism Association.

Photo credit: Hawaii Tourism Authority

The pandemic shutdown gave the islands time to tackle overtourism and the hotels the space to implement customer-centric technology. The result is a new visitor experience in Aloha State.

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The state legislature has also deleted part of the TAT that went to individual counties. Now every county is allowed to charge an additional TAT of 3%. When this happens, the combined TAT and General Excise Tax for Hawaii will exceed 18%, one of the highest rates in the country. “That makes Hawaii less competitive,” said Vieira. “Everyone goes online, everyone buys prices. It’s about the value proposition and what you think is fair.”

While the HTA lacks the power to improve access to trails or alleviate traffic problems, it can help coordinate between authorities and demonstrate value by driving progress, De Fries said. To this end, the HTA will launch a call for proposals for a program to integrate reservation systems in state and regional parks in one application later this year.

Hannemann said such efforts and regulation of the illegal vacation rental industry, which is blamed for many of the negative impacts on residents, will go a long way in helping the HTA lobby for funding.

“HTA will not go away anytime soon, the legislature will not go away, and the industry is the largest in the country, with no economic diversification initiative in sight,” said Hannemann. “Like it, love it, or loathe it, tourism is here to stay. So let’s do better and work for everyone.”