Legislature moves to tighten oversight of Hawai‘i Tourism Authority

State lawmakers took swift action Friday to amend a bill to tighten oversight of the Hawai‘i Tourism Authority, which is undergoing more leadership shake-ups, while dealing with allegations that procedural deficiencies allowed for inappropriate freebies at the Hawai‘i Convention Center.

The House Finance Committee is moving Senate Bill 1571 forward with a new amendment that requires that the governor appoint the HTA CEO and that the Senate confirm the choice. The bill also downgrades the HTA board to an advisory board, which continues the trend of increasing the state Department of Business, Economic Development and Tourism’s oversight of HTA.

Rep. Adrian Tam (D, Waikiki), chair of the House Committee on Tourism, said he proposed the amendment to SB 1571, which was supported by the House Committee on Tourism and the House Committee on Labor before it was relayed to the House Committee on Finance.

“We just feel that we need to start the discussion of having legislative oversight on who becomes CEO of HTA given what has been happening recently at the HTA board,” Tam said. “We’ve seen in the past where the Senate has rejected gubernatorial nominees. These checks and balances will ensure that the CEO truly does work for the people of Hawaii.”

Tam said improving oversight of HTA has been a hot topic since the HTA board met Tuesday and Thursday to discuss the findings of a financial audit of HTA’s fiscal year 2024 by Accuity LLP, a firm contracted by the State Auditor’s Office.

Mufi Hannemann resigned Thursday as chair of the HTA board, saying he wants to end distractions after allegations surfaced that two of his nonprofits, the Hawai‘i Lodging and Tourism Association and the Pacific Century Fellows, received Hawai‘i Convention Center freebies.

Hannemann, a former Honolulu mayor who is also the longtime president and CEO of HLTA and the founder of the Pacific Century Fellows, told the Honolulu Star-Advertiser, “Recent questions surrounding unpaid invoices at the Hawai‘i Convention Center have cast unnecessary scrutiny on two highly respected organizations I am affiliated with — distractions that risk overshadowing the facts and the important work we are all committed to.”

“Allegations were raised regarding unpaid invoices totaling approximately $14,000 for events held at the Hawai‘i Convention Center. However, the state deputy attorney general assigned to HTA stated that there was not enough information to warrant an investigation at this time, and the State Auditor found no fraud,” he said. “The auditor did recommend that HTA strengthen its internal policies to ensure more accurate and timely billing. I fully support this recommendation.”

Hannemann’s resignation follows other key HTA staff leadership departures and changes, as well as board changes.

Caroline Anderson was recently appointed as HTA’s new interim president and CEO following the resignation of its previous interim top leader, Daniel Naho‘opi‘i, who had been in the role for 18 months and had been the agency’s 11th top leader since the state Legislature created the HTA in 1998.

Kalani Ka‘ana‘ana, HTA chief stewardship officer, also has taken over as interim HTA public affairs officer after the departure of T. Ilihia Gionson.

Anderson also serves as HTA’s planning director and interim chief administrative officer. But the HTA chief brand officer position is vacant until a decision is made on how to reallocate an already overburdened staff.

Ka‘ana‘ana said HTA is budgeted to have 30 full-time equivalent positions, but currently only 23 are filled.

The staff shortages have weighed heavily on HTA staff, as has mounting confusion about the chain of command since 2024’s Legislature took away HTA’s exemption from administrative boards, which made it less autonomous from DBEDT.

Todd Apo, who was elected to take Hannemann’s place as HTA chair, and Anderson represented HTA at the SB 1571 hearing Friday.

Anderson stood on her written testimony, which offered comments on the implications that the bill would have on HTA’s governance and the State Planning Act.

“HTA’s role as a ‘policy-­making and advisory board’ needs clarification. We are already experiencing confusion and difficulties with the recent changes that have blurred some lines between the Authority and the Department,” Anderson wrote. “Adding the word ‘advisory’ would create additional confusion and uncertainty. The high importance of industry and community input to HTA’s work is vital to the purpose, mission, and impact of the Authority’s work. Moving that to an advisory duty should first include greater discussion with all stakeholders.”

HTA was not immediately able to respond to the latest amendment regarding the changes to how a CEO is appointed.

HTA in recent years has grown more politicized. But Better Destination LLC, a third-party contractor hired by the HTA, recommended last summer that HTA should restructure to a community-driven nonprofit destination stewardship organization rather than a government entity under the state Legislature. HTA had formed a Governance Study Permitted Interaction Group to review the findings, but so far, the PIG has not presented a recommendation.

University of Hawaii at Manoa political scientist Colin Moore said the governance changes proposed by SB 1571 seem reactive. But Moore added, “It’s obvious that the status quo isn’t working, so more conversation is warranted.”

“You either want to take the politics out of it, like the consultant suggested, or there’s probably an argument to put the politics back,” he said. “Having the governor appoint the CEO and the Senate confirm the choice in some ways elevates the position and makes the governor and the Senate more directly responsible — that’s not necessarily a bad thing.”

Jerry Gibson, president of the Hawaii Hotel Alliance, said the bill’s changes are worth considering, but noted that HTA’s advisory board must include members who are savvy about tourism and marketing.

“We are very fortunate to have a governor that is very in tune with tourism and also in tune with what it does for the economy and for the 200,000 jobs that revolve around tourism,” Gibson said. “I have confidence that the governor and the Senate would hire the very best.”

Keith Vieira, principal of KV & Associates, agreed with Gibson but said the change could prove challenging if the political landscape changed.

“The governance study was concerned about politics, and this adds more politics,” Vieira said. “You want to leave it up to the logic of the board and the intent of the board to do the right thing, whereas we know that certainly hasn’t always been the case in the Legislature where it’s politics and power.”