Hawaii tourism

Hawaii Tourism Authority reorganizes as politicians ponder its fate

July 6 – The Hawaii Tourism Authority has eliminated two high-level positions in a reorganization that focuses on destination management at a time when politics is about to decide the fate of the beleaguered agency.

Kalani Kaanaana was promoted to brand director on July 1. Kaanaana, who joined HTA in 2016, was previously its Director of Hawaiian Cultural Affairs and Natural Resources and is a highly respected member of the Hawaiian community.

At the same time, HTA cut jobs for veteran hospitality executive Pattie Herman and longtime TV presenter Marisa Yamane. Herman had served as Vice President of Marketing and Product Development for HTA since December 2019. Yamane, who left KHON2 to join HTA in May 2019, served as Director of Communications and Public Relations. Both women were recruited by former HTA President and CEO Chris Tatum, a 40-year veteran of the hospitality industry who retired at the end of August.

HTA President and CEO John De Fries, who started at HTA in September, is the first native Hawaiian to take over the leadership of the agency.

De Fries explained the changes in an email to the Honolulu Star-Advertiser: “As HTA moves toward a more efficient destination management organization that puts our community first and focuses on regenerative tourism, we are revamping our structure and operations so that we can more effectively meet the needs and objectives set out in our 2020-25 strategic plan.”

HTA’s reorganization comes as discontent grows among residents and visitors, which has sparked legislative criticism of the agency. It also comes as Hawaii lawmakers are due to meet today to consider veto waivers, including Bill 862, an hypertension measure.

HB 862, which Gov. David Ige said he could veto, would make functional changes to the Hawaii Tourism Authority and eliminate distribution of the transient lodging tax to the agency as well as to individual counties.

The measure, passed this legislative session through an 11-hour delete-and-replace effort, sought to eliminate the county’s $103 million annual share of revenue from the Transient Lodging Tax, or hotel tax. Instead of sending the money to the counties, the state would keep it. However, counties would be empowered to impose their own TAT increases of 3 percentage points.

The changes outlined in HB 862 would also remove the transitional lodging tax funding dedicated to HTA since its inception. The bill replaced HTA’s normal $79 million annual TAT distribution with $60 million in funding from this year’s American Rescue Plan Act. The bill would eliminate HTA’s procurement exemption, a measure that would have required HTA to obtain state approval for all future contracts and purchases.

Ige said he was concerned that the “funding and functional changes” in HB 862 would “severely damage HTA’s move into destination management”.

By putting HB 862 on their possible waiver list on Friday, lawmakers signaled that they expect to have enough votes for a waiver, which requires a two-thirds majority of the House and Senate.

However, the reorganization of HTA could add to the uncertainty by making the supporters hesitate, on each side.

The reorganization could appease some lawmakers, who wanted to see more destination management from HTA. However, it could alienate other lawmakers, particularly some senators, who earlier this year’s session had proposed language in the law that would have refocused HTA on marketing and branding.

There are those who see the reorganization as a continuation of the pivot to destination management that emerged from the turmoil of 2018, when lawmakers proposed a bill to slash $30 million from HTA’s marketing budget and wanted to use the funds to offset the impacts of tourism.

However, some view the current changes as a knee-jerk reaction and are skeptical that HTA will ensure that targeted marketing to high-spending visitors remains part of destination management.

Prominent members of the Hawaii visitor industry are still working to get the support Ige needs to reverse the measure. They only need a one-house majority, either 18 representatives or nine senators, to agree with them.

However, some of them are now torn.

A majority agrees the state should not empower counties to increase TAT taxes at a time when tourism is recovering. But some are wary of HTA’s abrupt decision to cut its marketing and communications specialists during a pandemic when educating residents and visitors is key to resuming tourism.

Keith Vieira, director of KV & Associates, Hospitality Consulting, and original HTA board member, said HTA should have been much more open with the visitor industry about its intentions.

“It’s scary that everyone went through everything they went through to maintain hypertension, which was the right thing to do, and now they’re going to dump it,” Vieira said. “Why are we keeping it?”

Waikiki Improvement Association president Rick Egged was more comfortable with the changes.

“I have always believed that the management of our destination is just as important as the marketing component,” Egged said. “We need to focus on the kind of marketing that makes sense for us as a destination. I think it’s a shift in focus, not an elimination.”

The changes, which were approved during a lengthy executive session, were not publicly announced by HTA, which had been criticized in the last legislative session by some lawmakers for a perceived lack of transparency and accountability.

Anna Elento-Sneed of law firm ES&A Inc., which was awarded an $80,000 sole-source contract by HTA, helped lead HTA’s reorganization.

De Fries told the Star-Advertiser in an email that “Contract 21027 was sole-sourced due to the complex nature of the change management strategy outlined in Authority Resolution No. 2021-2-1. of Hawaii Tourism, as approved by the HTA Board of Directors, the short period of time to complete this work, and given that the contractor is uniquely qualified for the necessary tasks based on previous work by Anna Elento-Sneed on HTA’s first major reorganization in 2009.”

De Fries said the contract will cover seven months during which specialists will assist “in the development of training and coaching programs for staff to acquire and maintain the skills necessary for HTA to become a more effective destination management organization and achieve our overall goal of Malama Kuu Home (taking care of my beloved home) through regenerative tourism.”

At a June 11 HTA board and staff retreat related to the reorganization, Elento-Sneed said of the state legislature, “They sent a giant missile down your bow with a timer on it.”

HTA plans to replace Yamane’s old job with a position called Public Affairs Officer, which the organization says would play a more strategic communications role, with a focus on government relations, media communications, issues management, social and corporate responsibility and information dissemination.

HTA said it will soon begin recruiting for the public affairs officer. But De Fries said the position of brand manager was not advertised because it was directly inspired by “Kaanaana’s commitment to the regenerative tourism model”.

“His knowledge of state government systems and his experience working with our global marketing team are key skills he will leverage to support the proposed components in HTA’s change management plan,” said De Fries. “As a Hawaiian cultural practitioner and native speaker, her awareness and respect for our natural environment shapes HTA’s approach to destination management and stewardship. Kalani is a rare talent who has earned the respect of her peers and many community leaders throughout our state.”

De Fries said HTA is also moving staff into new cross-functional teams that will work with Kaanaana on brand management and regenerative tourism.

“These changes, and others we hope to implement, will allow HTA to do the job of managing destinations that Hawaii residents rely on us to do.”

De Fries said that as of July 1, HTA had 25 authorized positions, compared to 32 before the start of the exercise. De Fries said this year’s Legislative Assembly moved seven HTA positions to the Research Division of the Department of Business, Economic Development and Tourism.

De Fries said that by the end of July, HTA expects to have 18 positions, assuming the seven vacant positions are not filled.

De Fries said annual salaries for the 25 authorized positions before the reorganization totaled $2,271,972. Annual salaries after the reorganization will total $2,152,620.

“This equates to a total savings of $119,352, partly due to voluntary pay cuts for three senior executives to support the reorganization plan totaling approximately $36,500,”

he said.