Legislation aims to help tourism recover

HONOLULU — Hawai‘i’s hotel booking pace is in the red through December, but legislative funding has allowed the Hawai‘i Tourism Authority to support a new multimillion-dollar marketing campaign aimed at U.S. visitors.

The new campaign highlights the local people and places making the Hawaiian Islands an unforgettable destination.

While the Maui fires have created challenges for the visitor industry statewide, other factors also have dampened tourism. They include uncertainty in the U.S. economy, the strength of the dollar against some international currencies, increased competition from other destinations and the community-driven push toward managing rather than growing tourism.

It didn’t help that HTA spent the prior two years defunded by the Legislature and at times fighting not only for money but for its existence. A procurement battle over the awarding of the state’s top U.S. tourism award took energy out of the market.

The importance of the U.S. market to Hawai‘i cannot be understated. In 2023, about 7.42 million visitors came to Hawai‘i from the U.S., which represented about 77 percent of all the visitors that came to Hawai‘i. They spent $15.9 billion, which also was about 77 percent of the $20.7 billion in total visitor spending across all markets.

In the meantime, the Hawai‘i Visitors &Convention Bureau, HTA’s contractor for its top U.S. market, kept running COVID-19-era malama (take care of) Hawai‘i campaigns. Research shows that HVCB’s malama campaigns were effective compared with other campaigns from other destination marketing organizations. Still, industry critics said it grew tired after COVID-19 and the Maui wildfires, and it left some visitors confused about whether Hawai‘i really wanted them to visit.

Now HTA and the messaging in its latest U.S. multi­million dollar marketing campaign is trying to pivot. HTA began the state legislative session tracking 135 measures, including several carryover bills that would have eliminated the organization but have since died.

The agency is now looking to emerge from this session with an appropriation in House Bill 1800 that funds 30 positions and a $63 million recurring budget, ensuring the agency’s funding will continue without specific legislative approval.

Mufi Hannemann, HTA board chairman and Hawai‘i Lodging &Tourism Association president and CEO, said, “This is a significant, significant achievement for HTA and I want to thank all of you that had a part of this. Yes, there were some of us out there leading the charge, but at the end of the day it required all of you to help us make the case to enable us to get $63 million for an operating budget. We’ve gone through two years of being defunded and gone through some very stormy discussions about if we should even exist anymore. All of that is past us, in my opinion.”

Funding

The finance bill goes to a full vote this week, but it’s looking good for HTA since conferees from the Senate and House agreed to fund HTA at the higher of the two levels proposed. That funding would allow the agency to support HVCB’s new campaign called The People. The Place. The Hawaiian Islands.

Jay Talwar, HVCB senior vice president of marketing and chief marketing officer, shared the new campaign with the HTA board Thursday. Funding for the new campaign comes out of HVCB’s total U.S. market budget for 2024, which is more than $18.9 million, including phase two of the Maui Marketing Recovery Plan and grant money from the U.S. Economic Development Administration.

HVCB’s total contract from HTA to market the U.S. is nearly $38.4 million for the initial 2-1/2-year term, with an option for one two-year extension.

The contract came after HVCB, the only agency ever to market the U.S. contract for HTA, initially won an award and then lost it to the Council of Native Hawaiian Advancement, whose contract was eventually also rescinded.

Both entities protested, but those protests ended when the HTA board split the contract and awarded the U.S. branding piece to HVCB and awarded CNHA with a stewardship contract that runs across all markets.The compromise ended the distractions and allowed the contractors to respond to new market conditions.

New campaign

HVCB’s new campaign keeps many of the values of the malama campaign, which was evaluated highly by SMARInsights as part of HVCB’s return on investment in 2023.

Alisha Valentine, SMAR­Insights vice president, told the HTA board Thursday that for every marketing dollar spent by HVCB in 2023, about $407 was returned to the state.

“This (return on investment) is 43 percent above average. Post-COVID, the average return on investment for state (destination marketing organizations) is $285,” Valentine said. “However, for state offices with paid media investment over $5 million since 2021, the average ROI is $219, making the return on the 2023 media buy 86 percent higher than the average competitor.”

HVCB’s newest campaign is similar to the malama campaign; however, it shifts from the COVID-19-era tone of telling visitors how to act and instead conveys that caring is expected by having locals and visitors model it.

“You can feel a difference. There’s a welcoming here,” Talwar said as he highlighted images and videos from the campaign. “There are people smiling and happy to see you. We are looking to allow the benefits of tourism to reach a broader part of the community — the chefs, the agricultural producers, the farmers, the fisherman, the ranchers, culturalists, musicians, the lei makers, the fashion designers, the artists. (It’s) a large group of people who need support from tourism to allow them to continue their crafts and their lifestyle here on the islands. They are all coming to life in the campaign.”

On Maui, chef Kyle Kawakami of Maui Fresh Streatery is shown feeding and interacting with residents and visitors against the backdrop of the lush greens of upcountry Maui.

On Oahu, Meleana Estes, author of “Lei Aloha,” shares the cultural significance of the lei.

On Kauai, Hanalei Strings, a small music shop owned by Kirk and Tora Smart and their son Eli Smart, shows the magic of the small island where visitors might walk into the store and have an impromptu jam session, then later run into the participants on the beach.

HTA said additional ambassadors are in the pipeline.

“I actually know most of the ambassadors,” said ‘Iwalani Kuali‘i Kaho‘ohanohano, the HTA senior brand manager who has oversight for the U.S. contract. “It’s really special for me to be able to see them sharing their stories in this capacity in the tourism industry to our market and beyond. That’s what I grew up with. That’s what living in Hawai‘i means to me.”

Keith Vieira, principal of KV &Associates, Hospitality Consulting, who was among the industry reviewers on Wednesday, said overall feedback was positive, and those in attendance liked that the campaign highlighted that each island is a separate and special place and has its own beauty.

However, Vieira said, some industry leaders expressed concern that a long-form video of Maui was too focused on the past fire rather than its current recovery. He said some leaders also wanted to see more of Hawai‘i’s beaches and ocean featured.

Josh Hargrove, general manager of the Westin Maui Resort &Spa, said he loved that the upcountry Maui imagery was lush and green because it counteracts the perception that some people have that all of the Valley Island was on fire. He suggested subsequent campaigns could focus on beaches and waterfalls and other parts of Maui.

“We need visitors to come and realize that Maui is as beautiful as it’s ever been,” Hargrove said.

Hannemann said, “We are listening to their feedback and HVCB is making tweaks.” He said the new campaign is expected to roll out soon to address expected shortfalls in bookings not just on Maui but everywhere.

“We have been hearing from the industry that it is going to be a soft summer, so the sooner we get this kind of messaging out the better that we will be,” he said.

Talwar showed the board a slide of the hotel booking pace for all islands and pointed out that as of April 14, the hotel booking pace for Hawaii this month is in the red by single digits for every month except August up until December. Maui was up slightly for April, but is in the red by double digits well into the first quarter of next year, and West Maui is even worse.

“(The numbers) are consistently negative. So we are really appreciative of what’s been going on with the legislative session and your leadership that allowed us to get the funding. It looks very solid,” he said.

Funding wasn’t HTA’s only legislative win this year.

Senate Bill 3006, which would allow the agency to sell or lease naming rights of the Hawai‘i Convention Center facility, stalled. However, House Bill 2563, which started as a bill to develop a mobile app, was passed out of conference with the naming rights provision. Funding for the mobile app, which HTA supported, was taken out of the bill; however, it now exists in House Bill 1800 so the project can move forward.