Hawaii Tourism Authority board fires CEO George Szigeti

The Hawaii Tourism Authority voted Thursday to fire the agency’s president and CEO, George Szigeti, without cause — a decision that could leave HTA rudderless at a time when the state’s tourism industry is finally seeing some softening in its nearly seven-year growth trajectory.

The agency already was grappling with the abrupt resignations of former Chief Operating Officer Randy Baldemor, who left in March, and former Chief Marketing Officer Leslie Dance, who left in May, when rumors started circulating that Szigeti might not survive one of the agency’s most contentious legislative sessions in recent history.

Despite record-setting tourism arrivals and growth in nominal spending, some key Senate members were displeased with the agency’s destination management and with a February finding by the state auditor that the agency suffered from “lax oversight (and) deficient internal controls.”

State Sen. Laura Thielen (D, Lanikai-Waimanalo) said HTA needed a new plan to manage tourism under Hawaii’s current tourism paradigm, where more visitors are coming but adding less in inflation-adjusted dollars and causing resident satisfaction to plummet to a historic low. Nominal spending refers to spending that has not been adjusted for inflation.

The Senate’s dissatisfaction resulted in HTA getting a $13 million legislative budget cut in May. It also caused state Sen. Glenn Wakai (D, Kalihi), who chairs the Committee on Economic Development Tourism and Technology, and Thielen to vote against confirming HTA Chairman Rick Fried for another term. In May, Gov. David Ige withdrew his nomination to extend Fried’s HTA term, which expires Sunday.

Fried said he doesn’t know his own status at HTA, but understands that he can remain on the board as a carryover until someone else is selected to take his place in a future legislative session.

According to several off-the-record sources, Fried was offered an opportunity to get enough Senate votes to stay on the board if he would spearhead Szigeti’s firing.

“If the rumor had any truth, obviously I didn’t do it,” Fried said.

However, Fried was part of a six-member permitted interactive group that was assembled days before HTA’s May board meeting to evaluate Szigeti’s continued employment at HTA. Fried said the permitted group, which also included HTA board members Sean Dee, Fred Atkins, George Kam, Kelly Sanders and Craig Naka­mura, recommended Szigeti’s firing.

Fried said Thursday’s full-board vote “to go in a new direction” regarding Szigeti was unanimous.

“One of the major reasons that we are doing this is the difficulty in the current political climate and the difficulty in keeping our budget through the Senate,” Fried said. “There also was some concern from some of the stakeholders in the broader tourism industry, although some were fine with him, about his institutional knowledge of tourism.”

The board has agreed to pay Szigeti six months of pay in a lump sum on the day after his termination, which is set for Oct. 31. The severance amount was outlined in Szigeti’s contract, which had been slated to run through 2020. Szigeti’s annual salary is $297,684, with a $15,000 protocol fund and the use of a car for state business.

Szigeti described the board’s decision as “mutual.”

Szigeti said that he agreed to stay at HTA long enough to help the agency fill its top three positions and to run the Global Tourism Summit, which is expected to draw 2,500 attendees to Oahu in early October. Next up, he’ll try to find the balance for himself and his family that was hard to find while leading HTA.

“I’ll be taking a deep breath. I haven’t been able to do that in three years,” Szigeti said. “This team has really accomplished a lot; 2016 and 2017 were supposed to be flat to down. Instead we hit all the numbers. The challenge for the next CEO will be how to balance the numbers with managing the destination.”

Szigeti’s firing is only the most recent personnel shake-up for HTA, which has yet to hire replacements for Baldemor and Dance. At least 11 HTA staff members, including Miki Wakai, who is married to Sen. Wakai, have left the organization since 2015. That’s a high turnover rate considering that the agency has 20 full-time employees and 10 contract workers.

Fried said the agency has selected a new chief operating officer to replace Baldemor but is waiting for the candidate to make it through the state’s vetting process. He said HTA is reviewing resumes for candidates to fill Dance’s previous job.

Fried said an HTA administrative committee — including Nakamura, Sanders and himself — plans to talk today about finding a new CEO and president. It’ll form an executive selection committee, which would include HTA board members and stakeholders, he said.

“I’m confident once we get through this properly that things will go well,” Fried said.

But former HTA board member Keith Vieira, principal of KV & Associates Hospitality Consulting, said finding a replacement for Szigeti could prove difficult given the highly politicized nature of the job. After all, it took HTA about six months to find Szigeti to replace Mike McCartney, when he left HTA in 2015 to join Ige’s executive team.

“HTA was created by the Legislature. If you lose the support of key legislators, it’s hard to get past that,” Vieira said. “I think George and Rick did a good job, but these kinds of jobs aren’t really meant to go for more than three years or so — after that it’s almost impossible not to run into legislative issues.”