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The Hawaii Tourism Authority’s contract to provide destination management services and promote Hawaii to the U.S. market, the islands’ largest source of visitors, is still pending at a time when world travel venues around the world are competing to tap into booming travel demand.
A new five-year contract valued at more than $100 million was due to kick off Jan. 1; however, State Department of Business, Economic Development, and Tourism Director Mike McCartney rescinded an offer HTA had made to the top candidate.
McCartney said in a statement that DBEDT determined that the solicitation “did not provide for the consideration of all factors material to the agency, therefore it is in the best interests of the State of Hawaii to rescind the offer and re-solicit the (request for proposals).
“We are starting the process over again to find a definitive winning proposal to move forward in the best interest of the state,” he said. “The continental United States is the largest source of visitors to Hawaii, making effectively managing this market one of our most important efforts to strengthen our state’s economy.”
The Honolulu Star-Advertiser made a formal request to HTA for the top runners-up proposal, scorecards, and complaint that led to the cancellation of the tender. But so far, HTA has not revealed which candidate received the contract or what went wrong with the agency’s first public tender. In 2021, lawmakers removed HTA’s sourcing exemption, citing the need for greater transparency from the agency.
McCartney said in December that a new US request for proposals would be issued in the coming weeks. However, as the new year enters its third month, a new tender has yet to emerge.
Frank Haas, president of Marketing Management Inc., said the delay in releasing a new RFP is concerning given that it shortens the time candidates have to provide a thoughtful response.
“They’re getting to the point where there will be less than 90 days from tender to contract,” said Haas, who is a former HTA vice president and chief marketing officer. “It hurts the state in terms of being able to carefully deliberate about it.”
Haas said the state may take longer to avoid another upheaval with the DP, “but that’s no excuse, in my opinion. Because it’s a big, complicated base contract, they really need to release it.
HTA created a stopgap by awarding the Hawaii Visitors and Convention Bureau, its longtime contractor and a competitor in the failed bidding process, a six-month contract extension. The extension, valued at $8.5 million, began Jan. 1 and ends June 29. Because the plans require a lengthy approval process, the timing of the extension prevented HVCB from starting to market to US travelers in January, when the majority of destination decisions are made. .
Jay Talwar, HVCB’s senior vice president and chief marketing officer, said that as part of its current communications plan, HVCB is sharing “appropriate behavior messages (with aloha) to visitors.”
Talwar said the messaging works on Waze, Facebook, Instagram and is distributed through aircraft/airline communication tools such as confirmation emails, websites, blogs, social, digital and personal video players. It also works in select hotel rooms in Hawaii, and additional messages will soon be available at airports and at Volta electric vehicle charging stations around Oahu, he said.
Jeff Wagoner, president and CEO of Outrigger Hospitality Group, said HTA and HVCB have done a tremendous job during the pandemic, but he questions the effectiveness of any organization operating within the confines of a contract. six months.
“Not having a longer-term opportunity to plan and market doesn’t lend itself well to creating a strategy that will educate or bring consumers to Hawaii,” Wagoner said. “We are one of the greatest resort destinations in the world. For us, not having a cohesive, well-thought-out plan that we all stick to and work hard for our state puts tourism, in general, in a position where we may not be as competitive as other major destinations in resort.
John De Fries, President and CEO of HTA, said he expects HTA to issue a new RFP for the US contract soon.
“My crystal ball tells me … we’re eight days away from releasing the RFP,” De Fries said during a March 11 interview with the Star-Advertiser.
Kalani Ka’ana’ana, HTA Brand Director, said that “there are a lot of moving parts. This is our biggest supply, so we need to make sure we take the time to do it right.
“I understand that a lot of people are eager to hear what’s going on and what’s going on, and that the uncertainty of not knowing what’s going on is definitely something we want to address, but I also have to deal with it. face within the bounds of the public procurement code,” Ka’ana’ana said. “My commitment to you is to always be absolutely transparent when everything is available. I want you to know what happened. I want you to my neighbors know what is going on.
Ka’ana’ana, who is writing the revised RFP for the US contract, said he expects there will be changes to the document.
There is much to be done on HTA’s first sourcing under its new paradigm that is more focused on destination management, which requires a pivot towards “regenerative tourism”.
US sourcing also sets the tone for sourcing HTA’s international contractors. While Korea, China and Oceania are still within the terms of their five-year contracts, new contracts are to be concluded for Japan and Canada.
Keith Vieira, director of KV & Associates, Hospitality Consulting, said HTA should have delayed awarding a new US contract given the pandemic.
“You have to go with success. Now is not the time to make such changes,” said Vieira, who was a member of the Hawaii Tourism Authority’s first board of directors. “I feel like HVCB is the right entity. They have a good relationship with airlines, travel distribution system and social media.
“They have to be creative in the future. They must be profitable. I’m not saying they don’t need change or improvement, but there’s a reason they’ve been doing this for all these years.
HVCB is HTA’s longest-serving contractor and was preferred to win the new contract, although it faced stiff competition early in the process. At the start of last year’s procurement process, 27 entities, some of which had ties to Native Hawaiians, had registered their intent to apply for the U.S. market contract.
HVCB, whose roots go back more than 100 years, predates the establishment of HTA by the state legislature in 1998. HVCB is so intrinsic to HTA that the agency has awarded the bureau 10 contracts since 2016 totaling more than $155 million.
With the end of the lucrative US contract, HVCB has five contracts with HTA totaling $25.6 million, including the six-month US contract extension, a $4.5 million global meetings/convention contract, a $2.4 million for island chapter support services, a $750,000 contract for HTA support services, and a $9.4 million contract for destination management and community support.
Without the US contract secured, and with three of the five contracts HVCB holds expiring in 2022, the future of the tourism powerhouse is uncertain. It’s also likely to be decided without full sun unless the state reverses its decision to withhold public records.
HTA told the Star-Advertiser it won’t tell the newspaper what went wrong in the procurement process until the next one is complete.
HTA spokeswoman Ilihia Gionson said in an email on Thursday that the state’s director of procurement has ruled that none of the public documents sought by the newspaper can be released until HTA has assigned a new contract.
Gionson said the state’s chief purchasing officer viewed the transaction as a singular process since the original request for proposals had been canceled and had to be reissued.
“According to the (Procurement Director), it would not be in the interest of the State and the procurement process in general for information of the type you are seeking to be made available to the public (which would include other potential bidders for the next reissue) until the process is closed,” he said.
