hawaii tourism authority budget

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• Friday, April 19, 2024
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Hawaii News

Hta seeks additional funds for destination management.

• By Allison Schaefers [email protected]
• Feb. 12, 2024

CRAIG T. KOJIMA / [email protected]

A family of visitors Thursday set up their spot on Duke Kaha­na­moku Beach to enjoy the sun and sand in Waikiki.

The Hawaii Tourism Authority seeks $69 million for fiscal year 2025 to help continue generating a robust tourism industry in the state. The Patel family from Pennsylvania took photos Thursday at Duke Kahana­moku Beach. Nilesh Patel, left, Sunil Patel, Bimal Patel, Jagdish Patel, Parul Patel and Renuka Patel dressed in matching pareaus and aloha shirts.

The Hawaii Tourism Authority is still fighting for its life in the state Legislature but has come out swinging with a request to increase its budget by $9 million, add 14 more staff positions and raise salaries for its top executives. Read more

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The Hawaii Tourism Authority is still fighting for its life in the state Legislature but has come out swinging with a request to increase its budget by $9 million, add 14 more staff positions and raise salaries for its top executives.

Newly elected HTA board Chair Mufi Hannemann said, “We really believe now than ever that a robust tourism industry is needed. We need a state agency to lead that charge on behalf of government but also to be a strong interface with the industry.”

That’s why HTA seeks $69 million for fiscal year 2025, which is up from the $60 million that it received for fiscal year 2024 and was approved in Gov. Josh Green’s administrative budget for fiscal year 2025.

“We want to make a case given what has happened in Maui and other things that have come about, such as discovering that the Legislature would like us to do things (like destination stewardship) that require additional resources,” Hannemann said.

Hannemann and interim HTA President and CEO Daniel Naho‘opi‘i said HTA’s major goals for the legislative session include:

>> Attaining lump sum budget funding for HTA, preferably at the $69 million level.

>> Opposing any effort to have HTA eliminated, diminished or put into another state department.

>> Codifying destination stewardship responsibilities.

>> Focusing on workforce development.

>> Expanding sports-related activities.

>> Supporting the Hawai‘i Convention Center’s repairs and capital improvements, and seeking additional revenue for the center by urging passage of a bill that would allow the center to pursue revenue through a naming rights agreement with a partner.

Naho‘opi‘i said the increase in staff is to fill in personnel, support audit fiscal recommendations, bring Destination Management Action Plan team members in-house, and support HTA’s July reorganization, which created a new destination stewardship department now led by Kalanai Ka‘ana­‘ana, who is serving as both chief brand officer and chief stewardship officer.

Naho‘opi‘i, who is HTA’s chief administrative officer, also works two jobs. He also has been serving as interim HTA president and CEO since John De Fries, who formerly held the job, retired in September.

“We currently have 25 authorized positions, and we only have 19 employed right now,” Naho‘opi‘i said. “We know that we are short-staffed now. We had 32 before the pandemic when we were fully staffed.”

Ka‘ana‘ana said as HTA approached the end of 2019 and people were feeling the pressure of the 10 million visitors, it caused HTA to shift its view of the work.

“What we embarked on and were interrupted by the pandemic a bit was, What does destination management or stewardship look like?” he said. “At that very moment the number of positions was decreasing, but the work and the scope was also increasing.”

Naho‘opi‘i said HTA is now requesting five destination managers and three administration assistants to build its stewardship team. He said on the fiscal side, HTA wants to add a quality assurance manager, a contracts manager and three additional administrative and accounting support team members. Naho‘opi‘i said HTA also seeks to add a government affairs person to assist with public affairs.

The HTA board during its January meeting authorized a search to fill the chief brand officer position and directed staff to update criteria so that it would be ready to begin a search for the president and CEO when appropriate.

Competitive salaries

Hannemann said in the interest of staying competitive and attracting the best employees, the recommendation is to increase the annual salary for the HTA’s president and CEO position to $300,000 from $250,000 and the chief brand officer’s annual salary to $225,000 from $175,000.

HTA’s goals, especially for budget and salaries, will likely meet with debate given the financial constraints that the deadly Aug. 8 Maui wildfires have put on the state. But it’s not just its budget that HTA must monitor vigorously. HTA Public Affairs Officer Ilihia Gionson told the HTA board at its January meeting that the agency is tracking at least 86 bills this legislative session, some that deal with HTA directly and others that “cover the gamut from travel and visitor experience to transparency and accountability, environmental protections, Hawaii-made products and the like.”

Gionson said some early flagged priorities for HTA include reviewing bills having to do with “the green fee, the Hawai‘i Convention Center such as naming rights, bond funding opportunities, coupling the (convention) center’s management and marketing, and transferring management of the (convention) center from HTA to the Department of Accounting and General Services.”

“There are a few measures about HTA itself clarifying the appointment for board members, reducing the number of board members and so on. There’s one bill (House Bill 2563) about a smart destination platform — a concept that we have discussed internally in the past and haven’t had the budget to go and pursue — and so we look forward to vigorous discussions throughout the session,” he said.

Still looming are powerful carryover bills from last session that sought to repeal or reorganize HTA. While action has not been taken on them so far this year, they are a reminder that HTA still has a lot of ground to make up with legislators if it hopes to make it through this session intact — and possibly, if Hannemann has his way, even stronger.

Budget cuts

The agency was under fire long before 2023. Lawmakers trimmed HTA’s budget in 2018. Then, in 2021, HTA experienced major changes after legislators overrode Gov. David Ige’s veto of House Bill 862, which took away the tourism agency’s dedicated funding source and cut its annual budget to $60 million from $79 million.

HTA was left without funding in 2023 when lawmakers couldn’t agree on House Bill 1375, which contained the only funding for the agency. The bill had sought to replace the agency with a new tourism governance model.

HB 1375 made it all the way to the end-of-session conference committee and stalled as House Draft 3, which would create the Office of Tourism and Destination Management within the Department of Business, Economic Development and Tourism and take over HTA functions.

At the end of that conference committee, state Sen. Lynn DeCoite (D, Hana-East and Upcountry Maui-Molokai-Lanai- Kahoolawe), chair of the Senate Committee on Energy, Economic Development and Tourism, or EET, said in a statement, “During negotiations the Senate proposed that the HTA continue to exist with a reduced governing board consisting of only nine members and a primary focus on marketing and promoting tourism.”

“As part of our proposal, we also recommended establishing the Office of Destination Management under the Department of Business, Economic Development, and Tourism (DBEDT),” she added. “The primary objective of this new agency would be to engage and involve local communities in destination management planning, which would provide valuable insight and feedback to help guide the state’s overall tourism strategy.”

HB 1375 carried over to this year’s session along with Senate Bill 1522, which would have repealed the HTA and established an Office of Destination Management within DBEDT. It would have required the Office of Destination Management to implement certain county destination management action plans. It also would have established and funded a tourism liaison officer within the office of the governor.

DeCoite was not immediately able to respond to a request for comment on her current views regarding whether HTA should stay autonomous, as well as its funding and staffing requests.

State Sen. Glenn Wakai (D, Kalihi-Salt Lake-Pearl Harbor), majority floor leader and EET vice chair, opined that more legislators were dissatisfied with HTA in 2023 and 2022. Wakai said he does not expect discussions to upend HTA will get much traction this year; however, he said that there is still an appetite to guide HTA toward more efficiency.

“Last year, HTA’s procurement difficulties had a lot to do with the legislative angst toward HTA,” Wakai said, adding that leadership changes at HTA, the HTA board and DBEDT also have given lawmakers more confidence.

Procurement problem

HTA last spring finally moved past nearly two years of procurement controversy after splitting its top U.S. tourism award into two separate contracts when it selected the Hawaii Visitors and Convention Bureau to handle U.S. brand marketing and the Council for Native Hawaiian Advancement to handle destination stewardship. Prior to that, HTA faced protests from both entities. which had both been awarded the U.S. tourism contract and both had it rescinded by former DBEDT Director Mike McCartney.

Though he cannot speak for other legislators, the views of state Rep. Sean Quinlan (D, Waialua-Haleiwa-­Punaluu), House Tourism Committee chair, are critical to tourism bills and to HTA. He told the Honolulu Star- Advertiser on Friday, “It is not my intention to bring back the carryover bills,” and that he supports an independent HTA.

“I don’t think it would be prudent for us to move HTA to DBEDT,” he said. “DBEDT has enough on their plate already. We’ve already given them too much. How much more can we give to one agency?

“At a certain point we’ve gone past the capacity to manage all of this under the current structure without just completely burning people out. I’d really prefer for HTA to stay as an independent agency.”

Quinlan said he agrees with building capacity in destination management, which he views as managing the physical flows of people.

“What I would like HTA to do is help those communities that have been most inundated to get the most relief,” he said. “I think the smart app (bill) is the future of destination management, to convert county and state parks and destinations into a system that requires visitors to make a reservation and pay for it. For locals, we can use this endeavor to carve out more parking spots than normally would have been available to just locals, and, of course, it would be free for us.”

Moreover, he said, “The smart app bill is my absolute favorite in my career. If we do this, other places will follow.”

Quinlan said he understands that HTA will need to add more bodies, especially if the smart app progresses, and he’s a fan of more sports marketing.

“I won’t quibble with them saying that they would like to do more things, but $69 million is a lot of money and I’m not sure that we can afford that right now,” he said. “I’m not sure it would be prudent to appropriate that amount given the other challenges that we are facing at this time.”

Quinlan added that he also has concerns about HTA’s plan to raise salaries “at a time when the state has a cash flow problem.”

He said salaries fall under the purview of the HTA board, but noted that DBEDT Director James Kunane Tokioka has come out forcibly against large raises.

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Hawaii Tourism Authority decries budget allotment

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HONOLULU — Just hours after the state House Finance Committee unanimously approved the operating and capital budget for the 2023-24 and 2024-25 fiscal years, Hawai‘i Tourism Authority’s President and CEO John De Fries issued a statement citing “extreme concern” with his agency’s allocated funding.

The $18.9 billion state budget measure, formally House Bill 300, appropriates $35 million for the Hawai‘i Tourism Authority. DeFries said the agency is “grateful” for the money, but noted it is $40 million less than their budget request of $75 million for the 2023-24 fiscal year.

“This will cause significant across-the-board funding cuts that will impact HTA’s operations, destination management and visitor education programs we fund in our communities and in markets around the world, and the cultures events, festivals and sporting events we support,” said De Fries.

De Fries called the decision to cut funding “not a prudent approach,” given predictions of a global recession and its potential impact on Hawai‘i.

The Hawai‘i Tourism Authority is also requesting $60 million for fiscal year 2024-25 and beyond. DeFries says the funding is necessary to continue the implementation of the agency’s 2020-25 Strategic Plan and Destination Management Action Plans.

“We will continue to work with our legislators to demonstrate the importance of having a well-funded, comprehensive program for destination management and visitor education to serve the people of Hawai‘i,” he said.

The March 8 statement from the state House, announcing the Finance Committee’s approval of the state budget, did not mention the Hawai‘i Tourism Authority.

Instead, it emphasized “deferred maintenance and natural resources,” which will prioritize projects including repairing facilities and restoring parks, forests and ocean resources. “Additionally, Medicaid, health care, kupuna care, homeless services, climate change and affordable housing remain priority issues for the residents of Hawai‘i,” said Finance Chair Kyle Yamashita (D-District 12).

HB 300 is now headed to the House floor, and is anticipated to crossover to the Senate on March 15, according to the statement.

Other legislation, introduced earlier this year, asks to dissolve the Hawai‘i Tourism Authority to change the way tourism is handled throughout the state. The two bills, one from the House and one from the Senate, propose replacing the Hawai‘i Tourism Authority with a new office.

House Bill 1575, introduced by state Rep. Sean Quinlan (D-District 47), would restructure the Hawai‘i Tourism Authority as the “Hawai‘i Destination Management Agency.” It asks to transfer the duties and positions to a new office, dissolve the Hawai‘i Tourism Authority, and appropriate funds.

Similarly, Senate Bill 1522, introduced by Sen. Donovan M. Dela Cruz (D-District 17), states “the Hawai‘i Tourism Authority has failed to effectively execute its duties to manage the tourism marketing plan for the State.” The bill says that “due to mismanagement,” the agency’s $34 million contract has been in a state of uncertainty since 2021.

SB 1522 also states it “is necessary and appropriate to dissolve the Hawai‘i Tourism Authority,” and replace the agency with an “office of tourism and destination management.”

DeFries was not immediately available for comment on the proposed measures.

•••

Why are any taxpayer dollars allocated to the HTA? It should be 100% funded by the resorts and other private businesses that directly benefit from tourism. Further, do they really need to promote Kauai or Hawaii as a tourist destination anymore? I think the word is out.

We definitely have zero need to be handing out that kind of money to some BS authority when there are a million better ways that money could be spent in hawaii like towards Affordable housing and mental illness.

“The $18.9 billion state budget measure, formally House Bill 300, appropriates $35 million for the Hawai‘i Tourism Authority. ” Sorry, but that appropriation for HTA is $35 million too much.

Visitor social media posts of beautiful scenics, food and events sells Hawai`i with hundreds of thousands of views. HTA budget can withstand the cuts. And we are already over flowing with visitors.

Cut the pork. Yes!

It’s a joke how the money has been squandered.

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Hawaii pushes tourism agency to better manage visitor hordes

House Speaker Scott Saiki, center, speaks to Rep. Luke Evslin, right, and Rep. Justin Woodson, left, on the floor of the Hawaii House of Representatives on the last day of the 2023 legislative session in Honolulu on Thursday, May 4, 2023. Hawaii lawmakers ended their 2023 legislative session on Thursday without allocating money for the tourism agency that manages the state’s biggest industry and employer but legislators said some money would likely be made available to the Hawaii Tourism Authority through a process that will have Gov. Josh Green’s administration and lawmakers vetting its funding requests. (AP Photo/Audrey McAvoy)

The Hawaii House of Representatives convenes on the last day of the 2023 legislative session in Honolulu on Thursday, May 4, 2023. Hawaii lawmakers ended their 2023 legislative session on Thursday without allocating money for the tourism agency that manages the state’s biggest industry and employer but legislators said some money would likely be made available to the Hawaii Tourism Authority through a process that will have Gov. Josh Green’s administration and lawmakers vetting its funding requests. (AP Photo/Audrey McAvoy)

House Finance Committee Chair Kyle Yamashita speaks to reporters in Honolulu on Thursday, May 4, 2023. Hawaii lawmakers ended their 2023 legislative session on Thursday without allocating money for the tourism agency that manages the state’s biggest industry and employer but legislators said some money would likely be made available to the Hawaii Tourism Authority through a process that will have Gov. Josh Green’s administration and lawmakers vetting its funding requests. (AP Photo/Audrey McAvoy)

• Copy Link copied

HONOLULU (AP) — Hawaii lawmakers ended their 2023 legislative session on Thursday without allocating money for the tourism agency that manages the state’s biggest industry and employer.

But legislators, the governor and the lieutenant governor agreed to make some money available to the Hawaii Tourism Authority as the agency transitions from its traditional work advertising Hawaii to managing tourism so it doesn’t overwhelm local residents.

Gov. Josh Green, a Democrat, said in a statement that the state needs to figure out “how we can shift this agency from its focus of marketing tourism to more strategically looking at destination management that would attract and educate responsible visitors.”

Under the agreement, the Hawaii Tourism Authority will have to request funds from the state Department of Budget and Finance. Lawmakers and Green’s administration will vet the requests.

“We’re not just going to give them, you know, X dollar amount and say good luck, call it a day,” Rep. Sean Quinlan, the chair of the House Tourism Committee and a Democrat, told reporters.

The Hawaii Tourism Authority was founded in 1998.

In recent years, as the number of annual tourists hit a record 10 million in 2019 and resident complaints about excess tourism have grown, the agency has also been charged with managing travelers upon their arrival. The aim is to alleviate the effects of too much tourism by better handling the hordes that have clogged some hiking trails, beaches and country roads like the Hana Highway.

Some lawmakers have been unsatisfied with the agency’s work on tourism and destination management.

“I look forward to working with them, but at the same time making sure that the needs of the community and responsible tourism is addressed,” Sen. Lynn DeCoite, the Democratic chair of the Senate’s tourism committee, said about the new funding mechanism.

Sen. Gilbert Keith-Agaran, vice chair of the Senate Ways and Means Committee, told a news conference that the House and Senate both want accountability for the agency’s spending.

“They will have to show the two chairs that there is a reason why they want the money and what they’re going to use it for,” said Keith-Agaran, a Democrat. “It’s not going to be a blank check to them.”

The funds for the Hawaii Tourism Authority will come from the $200 million lawmakers set aside to address a variety of deferred maintenance projects, said Rep. Kyle Yamashita, the Democratic chair of the House Finance Committee. The governor will have flexibility in how he chooses to spend this part of the budget, Yamashita said.

John De Fries, the agency’s CEO, said in a statement released by the governor’s office that the funding approach will allow his organization to continue its important work in destination management and visitor education.

“We understand that our spending will be more scrutinized, and we recognize that we have a lot of work ahead,” De Fries said. “We are confident that we can find a way to balance the various needs of the people we serve.”

In January, the governor requested $75 million for the agency in the upcoming fiscal year ending June 2024 and $60 million for the following fiscal year.

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Budget bill allocates much less to the Hawaiʻi Tourism Authority than requested

The state house of representatives, Committee on Finance passed the stateʻs budget bill on Wednesday.  House Bill 300 includes a $35 million appropriation to the Hawai‘i Tourism Authority–thatʻs $40 million less than what was requested. 

HTA President and CEO, John De Fries said the lack of funding will cause significant across-the-board cuts that will impact operations, destination management and visitor education programs.

The budget bill is still making its way through the legislature and is expected to crossover to the Senate next week.

De Fries said the the limited budget is cause for “extreme concern.” He said that in addition to programs that the HTA supports in communities markets around the world, its funds are also used to support cultural events, festivals, and sporting events.

He said the limited funds come at a time when there is an anticipated softening of the global economy with potential impacts on Hawai‘i as forecasted by the Council on Revenues and University of Hawai‘i Economic Research Organization.

“To continue our progress and implementation of our  2020-2025 Strategic Plan  and  Destination Management Action Plans , we requested an operating budget of $75 million for fiscal year 2023-2024 and $60 million for fiscal year 2024-2025 and beyond,” said De Fries in an email update.

“We will continue to work with our legislators to demonstrate the importance of having a well-funded, comprehensive program for destination management and visitor education to serve the people of Hawai‘i,” he said.

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Hawaii Tourism Authority Awards Big Contracts To Former Rivals

The Council for Native Hawaiian Advancement and Hawaii Visitors and Convention Bureau will each get deals worth tens of millions of dollars.

State officials awarded separate contacts — for tourism marketing and management — to organizations that had been fighting over what previously was to be a single contract. Now, instead of battling over one big pot of money, the Council for Native Hawaiian Advancement and Hawaii Visitors and Convention Bureau could each get its own multiyear deal worth $65.5 million in total.

In its statement released on Monday, the Hawaii Tourism Authority said a third player, VoX International, was awarded a $2.4 million contract “to educate Canadian visitors about traveling mindfully and respectfully” while in Hawaii.

Hawaii Tourism Authority officials on Monday declined to make public the winning proposals, including details of what the organizations will do to earn tens of millions of dollars over 2.5 years. The officials said documents including the details would be available after the procurement is completed.

“Contract terms, conditions, and amounts are subject to final negotiations with HTA and the availability of funds,” the authority said in its announcement. “The state procurement process allows for a period of protest that will expire no later than June 14, after which contracts may be finalized.”

“For now, it is appropriate to reserve further comment until we have completed these active procurement processes,” said John DeFries, HTA’s chief executive.

These processes include getting approvals from executive agencies including the Department of Budget and Finance and Department of Business, Economic Development and Tourism, as well as Gov. Josh Green and legislative leaders, said Jimmy Tokioka, the DBEDT director. It’s an unusual process, a result of the Legislature cutting the HTA’s funding during the session.

Green has said he will use discretionary money to fund HTA. And Tokioka said he is confident the money will be there to pay for the contracts.

“One step at a time,” he said.

The announcement marks the third time in more than a year that the authority has awarded contracts to market and manage tourism from the mainland. The previous two stalled amid protests by the two entities now picked to share the pot.

Initially, in December 2021, the Hawaii Visitors and Convention Bureau landed what was going to be a single tourism marketing and management contract. But after the Council for Native Hawaiian Advancement protested the award, the Hawaii Tourism Authority rescinded the contract and awarded it to the council. That led to a protest by the visitors and convention bureau.

Invoking Hawaii’s “Aloha Spirit” statute , state officials tried to satisfy both sides by splitting the single contract into two . But the plan, which was devised by then-Gov. David Ige’s economic development chief Mike McCartney, violated Hawaii procurement law. Officials could not simply divide a contract between two competing bidders by edict, even if it was in the spirit of the aloha law, state lawyers said. So in a parting act before leaving office, McCartney rescinded the contract again, this time cutting out CNHA.

For the latest procurement, the tourism authority issued two requests for proposals: one for destination stewardship, the other for brand management and marketing services in the United States, Hawaii’s largest tourist market. These requests for proposals followed the outline of McCartney’s plan. So did the contracts announced on Monday.

The Council for Native Hawaiian Advancement was awarded the destination stewardship conract, worth $27.1 million for the initial 2.5 year-term with an option for two one-year extensions. The Hawaii Visitors and Convention Bureau’s marketing contract is worth $38.4 million for the initial 2.5 year term, with an option for a two-year extension.

Both are scheduled to begin in late June.

Council Hopes Tourism Can Benefit Culture and Environment

For the council, the contract marks a major leap for an organization previously known primarily as a community development financial institution providing economic opportunities for Native Hawaiians. An opportunity to administer federal Covid-19 rent relief funds during the pandemic allowed the council to build capacity. Eventually the organization made a bid for the state’s U.S. tourism marketing contract, which the HVCB had held for more than a century.

Now, through its newly formed Kilohana division, the council will be in charge of programs designed to manage tourism so it can provide benefits for local businesses, culture and environmental and conservation organizations.

For example, the council also will take over management of the authority’s Aloha Aina program, which provides grants to environmental organizations such as The Nature Conservancy in Hawaii , the state Division of Forestry and Wildlife, Malama Pupukea-Waimea and the Molokai Land Trust .

The program in 2022 was managed by the Hawaii Community Foundation , which awarded grants worth $1.6 million to 31 organizations in 2022.

The council will also take over administration of the authority’s Kukulu Ola program, which provides grants for Native Hawaiian cultural activities and organizations. The authority awarded $1.5 million to support 30 community-based programs in 2022.

CNHA’s chief executive, Kuhio Lewis, said he does not expect a protest this time. Kilohana’s chief administrator, Tyler Iokepa Gomes, said the contract is the culmination of three years of work by CNHA. The goal, he said, to build bridges and spread tourism’s benefits widely in the community.

“Economic self-sufficiency is really a great way to empower the community and to see the benefits the industry can have,” he said.

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Hawaii Tourism Authority left out of state budget

Apr. 27—State lawmakers approved $64 million for the state-owned Hawai 'i Convention Center to fix its leaky roof, but left operational funding for the center and for the Hawaii Tourism Authority out of the final version of the state budget measure House Bill 300 CD1, which was approved Tuesday by conferees, and will head to both chambers for a final vote before it is sent to Gov. Josh Green for consideration.

It's down to the wire.

State lawmakers approved $64 million for the state-owned Hawai 'i Convention Center to fix its leaky roof, but left operational funding for the center and for the Hawaii Tourism Authority out of the final version of the state budget measure House Bill 300 CD1, which was approved Tuesday by conferees, and will head to both chambers for a final vote before it is sent to Gov. Josh Green for consideration.

HB 1375, introduced by Rep. Sean Quinlan (D, Waialua-­Kahuku-Waiahole ) along with other House members, now appears to be the most viable vehicle to fund operating budgets for the HTA and the center, whose annual budget of $4 million to $4.5 million comes from HTA's annual appropriation. The catch is that Friday is the decking deadline so to keep moving, these bills must be scheduled for a Friday conference hearing by 10 :30 a.m. today. Also, the bill in its current form would repeal HTA.

A similar bill, Senate Bill 1522, introduced by Sen. Donovan Dela Cruz (D, Wahiawa-Whitmore-­Mililani Mauka ), who chairs the Senate Ways and Mean Committee, is technically still in play, but unlikely to move forward as of Wednesday evening because House conferees had not been assigned.

The House Conference Committee for HB 1375 will be chaired by lead chair Quinlan and co-chairs House Finance Committee Chair Rep. Kyle Yamashita (D, Spreckelsville-Upcountry Maui ), Rep. Linda Ichiyama (D, Salt Lake-Moanalua Valley ) and Rep. Daniel Holt (D-Kalihi-Chinatown-Sand Island-Honolulu ). They will be joined by Rep. Lisa Kitagawa (D, Kahaluu-Ahuimanu-Kaneohe ) and Rep. Kanani Souza (R-Kapolei, Makakilo ).

The Senate on Monday appointed Sen. Lynn DeCoite (D, Lanai-Molokai-Paia-Hana ), chair of the Senate Committee on Energy, Economic Development and Tourism, to head the Senate conferees. She will be joined by co-chairs Dela Cruz and Sen. Glenn Wakai (D, Kalihi-Salt Lake-Aliamanu ), as well as Sen. Donna Mercado Kim (D-Kalihi Valley-Moanalua-Halawa ) and Sen. Kurt Fevella (R, Ewa Beach-Iroquois Point ). The appointed Senate conferees all have been critical of HTA's ongoing procurement for its U.S. tourism contract.

The preamble to HB 1375 states, "Due to mismanagement by the Hawaii Tourism Authority, the award of a $34, 000, 000 contract for the marketing of Hawaii as a tourism destination to the United States major market area has been in a state of uncertainty since 2021. This situation has been widely publicized and has demonstrated the Hawaii tourism authority's noncompliance with the Hawaii public procurement code. The legislature finds that it is necessary and appropriate to dissolve the Hawaii Tourism Authority."

HTA originally selected longtime contractor the Hawaii Visitors and Convention Bureau for the multimillion-­dollar U.S. tourism award on Dec. 2, 2021. Former Department of Business Economic Development and Tourism Director Mike McCartney, acting as HTA's head of purchasing agency, rescinded the contract award in 2021 following an unresolved protest from the Council for Native Hawaiian Advancement.

When HTA embarked in 2022 on a second round in the request-for-­proposals process, HVCB lost to CNHA and filed its own protest. McCartney rescinded CNHA's award on his last day on the job, Dec. 5, citing the "best interest of the state "—the same reason he gave for HVCB's earlier rescission.

In February, HTA kicked off a third procurement for a U.S. tourism contract by soliciting bids for a contractor to provide Hawaii tourism destination brand management and marketing services for the U.S. market. At the same time, it also issued a request for proposals to provide support services for destination stewardship across all markets.

The current version of HB 1375 repeals HTA in favor of establishing an Office of Tourism and Destination Management within the state Department of Business, Economic Development &Tourism. The change would take place July 1 and the new agency would be governed by a nine-member board and an executive director.

Lawmakers still have to address the bill's funding designations. HTA needs funding if they decide to keep the status quo or postpone repealing the agency. If they create a new entity, it would need funding, too.

Conference committees can take on a life of their own so what happens next could include many scenarios, from lawmakers keeping HTA to a major shake-up that upends what has been the state's key tourism agency for 25 years. To be sure, negotiations on the earlier HB 300 budget were fierce.

DeCoite said she was disappointed that HTA did not adequately prioritize fixing the Hawai 'i Convention Center's leaky roof, and supported HB 300's appropriation.

"If this is a priority market, then why do we have these conferences operating under a leaky roof while they have to put rubbish cans ? It just doesn't send out a good message, " she said. "You can't market a basically defunct, inoperable facility."

Furthermore, DeCoite said that she plans to introduce a conference draft for HB 1375 that would provide $60 million to HTA, and recommend lifting the spending cap on the $28.5 million Hawaii Convention Center fund to allow for further repairs.

Quinlan said that "negotiations are ongoing, " and that he has not yet reviewed DeCoite's proposed conference draft.

Quinlan said Wednesday that several steps must happen for the bill to keep advancing, including meeting today's deadline notice. He said if the bill goes to conference, lawmakers will only have hours to reach agreement due to Friday's decking deadline.

HTA board vice-chairman Mike White said, "We are very passionate about what HTA is doing for the people of Hawaii. At this point, we are comfortable that the Legislature will do what's best for the people of Hawaii. We are very hopeful that they will give us time to work on our governance and move forward in a really positive way."

White said the HTA board meets today and will consider a proposal to conduct its own study to identify the best tourism governance model for Hawaii. He said in addition to seeking input from other destinations, HTA staff has recommended getting feedback from residents.

Hawai 'i Convention Center General Manager Teri Orton said she is grateful that HB 300 conferees approved money to fix the leaky roof at the center, where for years water has been penetrating the rooftop terrace deck, causing water leaks into other parts of the building, where there are now cracks, rust and calcium leaching from the concrete.

Orton said she hopes that lawmakers also reach consensus on HB 1375 so that HTA and the center will have operating budgets.

"If we weren't able to get any funding, we might have to use capital improvement funds for operations, which would cause further deferral of critical projects, especially those related to leaks, " Orton said.

It's deja vu. Last year, lawmakers left HTA out of the state budget bill and then couldn't come to terms on the bill that contained HTA's funding. State lawmakers attempted to fund HTA through capital improvements, but Gov. David Ige vetoed the bill due to so-called "gut and replace."

The stakes seem even higher this year, and lawmakers are nearly out of time, said Colin Moore, associate professor at the University of Hawaii Economic Research Organization.

"I don't think I've ever seen it this chaotic around tourism, " Moore said. "They've got to fund the convention center and if there is nothing to replace HTA then HTA would need to be funded."

Moore said even if the proposals for change are solid, a major overhaul of public policy needs more time than is left in the session.

"You have both sides playing hardball and no one flinched, so here we are, " he said. "It's a mad scramble."

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UH gala honors Hawaii tourism leaders, raises record $517K for scholarships

HONOLULU (HawaiiNewsNow) - The University of Hawaii at Manoa’s School of Travel Industry Management honored leaders in Hawaii Tourism at the Sheraton Waikiki on Wednesday.

Holden Lim, the president of Hospitality Link international, was inducted into the Alumni Hall of Honor, and former Honolulu Mayor Mufi Hanneman — president and CEO of the Hawaii Lodging and Tourism Association — received the Legacy in Tourism Award.

“This is a school that has trained, educated so many of our leaders in the past, and some, many of them have taken great positions of prominence in the industry,” Hannemann said.

“It’s not about me, it’s about the industry, all coming together.”

On Thursday, state senators will hear testimony and discuss whether to confirm Hannemann as chair of the Hawaii Tourism Authority’s board of directors.

Meanwhile, officials explained the purpose of the 22nd annual “Celebrate a Legacy in Tourism” gala. The event raises money to support future leaders in travel industry management. UH said it raised a record-breaking $517,000 to help support student scholarships.

The gala also marked the 75th anniversary of UH’s Shidler College of Business, in which the School of Travel Industry Management falls under.

Copyright 2024 Hawaii News Now. All rights reserved.

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Why Hawaii is scrambling to spend last of its federal COVID funds before end of 2024

Hawaii intends to spend $200 million in federal pandemic funds following concerns raised by the U.S. Treasury that the Aloha State had not fully committed to their use.

In 2021, Hawaii received $1.64 billion in federal aid to mitigate the impacts of COVID-19 and bolster economic recovery efforts. However, a September report from the feds revealed that only $1.44 billion had been earmarked for expenditure.

Sabrina Nasir, Deputy Director of Hawaii’s Department of Budget and Finance, explained that the state had until the end of the year to allocate the funds or risk returning them to the federal government.

“We are committed to utilizing the full award, and we are grateful to the federal government for this vital support,” Nasir confirmed.

The process involves the Hawaii Department of Budget and Finance submitting requests for Governor Josh Green (D), with subsequent review and approval by the governor’s office.

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“This particular allocation was directed to the governor’s office, and we are managing it on his behalf,” Nasir clarified. “This is standard practice across all states.”

The decision not to spend the remaining funds would have been contentious, particularly given Hawaii’s tourism-dependent economy, which continues to struggle in the aftermath of the devastating wildfires that ravaged Lahaina in August, eight months ago.

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How did Hawaii spend the money? 

According to the Department of Budget and Finance’s master project list, Hawaii’s most substantial project involved allocating $800 million to cover unemployment insurance benefits— a necessity after the state’s unemployment trust fund was depleted during the pandemic.

Other critical projects funded: substantial investments in homeless services, government operations, and operating subsidies for crucial entities such as the Department of Education, the University of Hawaii, and Hawaii State Hospital.

Sabrina Nasir highlighted the versatility afforded by the federal government, stating, “Something really beneficial from the federal government is the flexibility they’ve granted.”

“Many of these funds were already allocated before Governor Green took office, and numerous projects and programs were already in progress,” Nasir explained. “Should there be a need to reallocate funds, we would do so in alignment with statewide priorities determined by the governor.”

A modest $29.1 million was allocated for Maui wildfire recovery efforts, according to the state's Office on Budget and Finance. Although most of the funds were obligated before the wildfires struck Lahaina on Aug. 8, 2023, the state did have some flexibility in re-appropriating them later.

“Those funds can be redirected as needed,” Nasir said. “They do reach a redirect if the funds aren’t being spent promptly.”

The federal timeline required states to commit funds within four years (2024) and spend them within six years (2026).

Jeremy Yurow is a politics reporting fellow based in Hawaii for the USA TODAY Network. You can reach him at [email protected] or on X, formerly Twitter @JeremyYurow.