The Hawai‘i Tourism Authority’s attempt to dip into another $5 million from its Tourism Special Emergency Fund after declaring a continued tourism emergency related to the softness following the Aug. 8, 2023, Maui wildfires has been blocked.
Business, Economic Development and Tourism Director James Kunane Tokioka, who is a voting member of the HTA board that voted to seek emergency funds for the second time since its creation in 1998, said the application to release the funding needs his signature to advance, and ultimately he doesn’t believe that the continued downturn rises to the level of an emergency.
“Nobody wants to say that we are not all in anymore — because we still are. We are doing a lot of different things that are all in with housing and other things, but if you ask me if it’s an emergency, it’s not. An emergency is when somebody is hanging off a cliff and we have got to save them right now,” Tokioka said. “This is 18 months later, and it would be hard for me to support something that says that it’s still emergency funding that is needed.”
HTA first used its emergency fund in 2023 after Gov. Josh Green declared a state of tourism emergency through his sixth emergency proclamation related to the Maui wildfires.
HTA interim President and CEO Daniel Naho‘opi‘i detailed in an email the uses of HTA’s first dip into the Tourism Special Emergency Fund, and its plans if a request is approved for the release of additional funds under the same tourism emergency.
“Our marketing recovery efforts through special Maui marketing campaigns, the Los Angeles market saturation activation, and working with industry partners on Maui Special Offers in 2023 and 2024 has helped to lessen the decline in the short term,” Naho‘opi‘i said. “With promising signs in the beginning of 2025 and some softness further into the year, overcoming market hesitancy to visit Maui can only be accomplished through continued contact, frequent viewership, and relationship building through 2025. Additional emergency funding will allow us to continue these focused, strategic efforts.”
Tokioka said if the HTA board disagrees with his oversight, members may petition state Budget and Finance Director Louis Salaveria or Green, or ultimately the state Legislature to appropriate emergency funding.
“I’m taking the side of being fiscally conservative with the government’s money,” he said.
Meanwhile, the newly appointed chair of the House Committee on Tourism, Rep. Adrian Tam (D, Waikiki), on Friday introduced House Bill 447, which cuts the minimum balance maintained in the Tourism Emergency Special Fund to $3 million from $5 million and amends the types of occurrences for which HTA may request the governor to declare a tourism emergency.
Tam says when the fund was created by former House Committee on Tourism Chair Rep. Ryan Yamane, the intent was to use it for relocating visitors in a natural disaster, and over the years its allowable uses have become too broad. His bill strikes specific language from Hawaii Revised Statutes 201-B9, which applies to a tourism emergency, including “world conflict” and “national or global economic crisis,” and eliminates a clause that allows funding for a “substantial interruption in the commerce of the State and adversely affecting the welfare of its people.”
Tam said the current statute allows HTA to use emergency funds for marketing, although it already has budget funds available for marketing.
“I think it’s a bit inappropriate to declare a marketing emergency for tourism in this manner because that wasn’t the intent of the fund to begin with,” he said.
David Arakawa, who sits on the HTA board and chairs its Budget and Finance Committee, said Tokioka’s and Tam’s interpretations about the emergency fund are “consistent with the the specific ‘use’ language of the tourism emergency statutes, outlined in Hawaii Revised Statutes 201-B9(b), about “measures to respond to the tourism emergency including providing assistance to tourists during an emergency.”
Arakawa also noted that Hawaii Revised Statutes 201-B10(b) says, “Moneys in the special fund shall be used exclusively to provide for the development and implementation of emergency measures to respond to any tourism emergency pursuant to HRS 201-B9(b), including providing emergency assistance to tourists during the tourism emergency.”
Arakawa said he believes the HTA Emergency Special Fund should be replenished to $5 million, in case there is another emergency. However, he recommends that HTA establish a contingency fund within its budget to respond to “‘emergencies’ that do not meet the criteria of HRS 201-B9(b) and HRS 201-B10(b).”
“I proposed a $10 million contingency fund in 2023 and 2024,” Arakawa said.
Keith Vieira, principal of KV &Associates, Hospitality Consulting, called Tokioka’s position irresponsible given that the “overall marketing number is less than it was 20 years ago. It’s important that we have emergency funds so that we can put people back to work, drive tax revenues and make sure that tourists know they are welcome in Hawaii.”
He added that “it’s confusing to think that the legislator in charge of overseeing tourism in the House doesn’t understand that driving employment and tax revenue is very important to us and it’s important that we are growing back markets that have never rebounded since the pandemic and were slowed even more from the Maui fires.”
Vieira, who was on the original HTA board, said he originally thought that a direct affiliation between DBEDT and HTA was worth considering. But he’s changed his mind given the frequent squabbles between the two entities, which have led to strife at a time when the industry needs solutions.
This is the third instance in recent times where Tokioka has disagreed with the vote of the overall board. The HTA board voted 7-3 on Sept. 13 to support an $80 million budget, but Tokioka recommended a $70 million budget.
Tokioka also recently paused an executive search that was underway for a new HTA president and CEO. An executive search has been underway with Bishop &Co. based on a $300,000 salary, a $50,000 hike that was approved in the budget worksheets for House Bill 1800, the finance bill state legislators passed in May and Green later signed into law.
Tokioka said Green made it clear that he would not approve a new HTA president and CEO who makes more than $188,800, which aligns with the salary parameters for lieutenant governor. The governor’s office said the new limit is based on the changing role of HTA and what is appropriate to support HTA’s current needs and operations.
Arakawa, who is vice chair of the HTA’s President and CEO Selection Committee, said, “The issue of the salary will probably resolve itself after HTA gets its house in order, and we agree on the various policy issues and we work with our consultants and we come to a common vision on the future of tourism.”
Better Destination LLC, a contractor hired by HTA to conduct a tourism governance study, recommended last summer that HTA restructure into a destination stewardship organization, or DSO, with a new name.
The contractor’s final report addressed the quest by some to shore up HTA leadership by hiring a permanent HTA president and CEO and filling the vacant HTA chief brand officer position.
“The question is: Who would want to take on these roles? In the current situation, even the strongest and most seasoned crisis manager has a high chance of failure,” the final report said. “The necessary changes are structural, and the required interventions are drastic. Leading HTA to success will require significant changes in systems, culture, and governance.”
Tam said he expects conversations will occur this legislative session about the right tourism governance model for HTA, and said, “I look forward to it.”
Tokioka, who reports directly to the governor, has been more involved in the inner workings of HTA since July 1, when Senate Bill 3364 went into effect, repealing HTA’s exemption from the administrative supervision of boards and commissions. He said the removal of the exemption, which was instituted by legislators who had lost confidence in HTA, makes it “an attached agency that needs approval for expenditures, the budget and (spending categories).”
The exemption from the administrative supervision of boards and commissions was the last one HTA had since it was founded in 1998. The Legislature took away its procurement exemption in 2021, and in 2022 the agency lost its special fund status.
The loss of exemptions and other cutbacks by the Legislature followed a crisis of confidence that threatened HTA’s existence.
Tam said: “I want to help the industry. I want to help tourism, but I also need to make sure that there is some accountability. People have asked for that over the last several years.
“My focus right now is not on the squabbles. I’m mostly trying to see how we can continue our efforts to grow regenerative tourism and keep our efforts on that,” he said.
