The Hawaiian word oil roughly translates to a time of transformative change, particularly a time when progress comes from remembering the lessons of the past.
The Hawaii Tourism Authority (HTA), as the agent of the Aloha State tourism industry, is in a huliau period. This summer, under new management, the agency reorganized with a focus on balancing destination management and destination marketing.
But the biggest shake-up came from the state legislature, which completely overhauled the agency’s funding.
Calls to address the impacts of tourism on residents were already growing in 2019, a year in which Hawaii welcomed a record 10.4 million visitors. Then Covid-19 hit and for seven months tourism all but ceased. Residents enjoyed traffic-free roads and unhindered access to beaches and hiking trails.
Then, driven almost entirely by mainland tourism, visitors flocked to the Islands. In June, monthly attendance was at 84% of 2019 levels. But pandemic protocols meant fewer businesses and attractions were open, and those with limited access, generating long queues and frustration.
John De Fries took over as CEO and President of the HTA in September and set to work implementing a 2020-2025 strategic plan based on four pillars: natural resources, Hawaiian culture, community and brand marketing. An initiative already underway is to create community-based Destination Management Action Plans for each county.
In July, De Fries announced a restructuring at the upper levels of the HTA to better focus on destination management, including the creation of a brand director position and a new planning role director, to oversee the execution of management plans.
As plans and restructuring were underway, the state legislature was hearing from residents about tourism headaches. There have been traffic protests to a popular Oahu beach, community meetings held over the traffic jam along the Hana Highway in Maui, and outrage over social media posts describing tourists harassing an endangered Hawaiian monk seal.
The return of visitors to Hawaii has been accompanied by new complaints of tourists harassing wildlife like sea turtles and Hawaiian monk seals. Photo credit: HTA/Tor Johnson
For years, the state legislature had debated the idea of curbing the HTA, which was funded by a fixed disbursement of the Transient Accommodation Tax (TAT). Now he had the momentum and votes to pass a new funding bill and override a governor’s veto.
“Many people in the public are calling for the reduction of HTA, even calling for the elimination of HTA and forcing the commercialization requirement on the private sector,” State Representative Richard Onishi said during of an HTA meeting in April. “It comes back to this question of what HTA is supposed to do, and that’s a message that I think isn’t communicated well.”
While current-year finances are largely unchanged, thanks to a combination of federal pandemic assistance and the continuation of part of the TAT, the HTA will need legislative approval for its annual budget from next year.
“Now that it’s become law, the staff and I intend to make it work,” De Fries said. “Fiscal 2023 will be a whole new ballgame. Nothing has been affected at HTA, and we’ll have to go and plead our case, which we intend to do.”
Those connected to the hospitality industry call these measures short-sighted, as HTA’s marketing efforts will be significant as the state strives to recoup its international and group visitors.
“Two of your biggest spending core customer segments aren’t traveling yet, and it defies logic to cut HTA resources right now,” said hospitality consultant Keith Vieira, who is an early member of the HTA Board of Directors. “We take our hands off the wheel.”
The legislature also stripped the HTA of its procurement power, limiting its ability to launch new contracts and campaigns or deal with sudden developments such as the pandemic.
“It will really tie their hands in terms of their ability to deal with the crisis they are facing, man-made or natural,” said Hawaii Lodging and Tourism Association President Mufi Hannemann.
Photo credit: Hawaii Tourism Authority
The pandemic shutdown has given islands time to combat overtourism and hotels space to implement guest-centric technology. The result is a new visitor experience in the Aloha State.
The state legislature also cut off some of the TAT that went to individual counties. Now each county has the power to impose an additional 3% TAT. If this happens, the combined TAT and general excise tax for Hawaii will exceed 18%, one of the highest rates in the country. “It makes Hawaii less competitive,” Vieira said. “Everyone goes online, everyone buys prizes. It’s about the value proposition and what you think is fair.”
While the HTA doesn’t have the power to improve trail access or alleviate traffic issues, it can help coordinate agencies and demonstrate their value by driving progress, De Fries said. To that end, the HTA will issue a request for proposals later this year for a program to integrate reservation systems at state and county parks into a single application.
Hannemann said such efforts and regulating the illegal vacation rental industry, which is responsible for many negative impacts on residents, will go a long way in helping the HTA build its funding case.
“HTA isn’t going away anytime soon, lawmakers aren’t going away, and the industry is the largest in the state with no economic diversification initiative on the horizon,” Hannemann said. “Love it, love it or hate it, tourism is here to stay. So let’s make it better and work for everyone.”