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Summit unlikely to attain expected $123M local boost

By Dan Nakaso

LAST UPDATED: 2:26 p.m. HST, Nov 12, 2011

Sales remained sluggish throughout Waikiki and drivers continued to suffer traffic delays Friday as some people across Oahu began to wonder whether the inconveniences of the Asia-Pacific Economic Cooperation summit will result in the predicted $123 million economic boost for Hawaii.

"$123 million? At this point it doesn't seem like it'll be that high," said former Mayor Mufi Hannemann, president and chief executive officer of the Hawaii Hotel & Lodging Association. "Certainly, it hasn't been as busy as anticipated, and we haven't seen the billings of 20,000-plus people."

Yet Hannemann and others in the visitor industry insist that the state will benefit from the high-profile exposure and guests that come with APEC.

The APEC Host Committee expected up to 20,000 people -- including 2,000 journalists -- would pour into Honolulu this week, but have been unable to produce numbers on how many dignitaries, delegates and staff actually showed up. By Friday, 1,100 journalists had picked up media credentials. An additional 150 White House journalists were expected to arrive late Friday along with President Barack Obama and first lady Michelle Obama, host committee spokeswoman Dawn Hirai said.

With both APEC business and attendance seemingly down, drivers such as Bob Hoevel questioned whether APEC is worth the mental and physical toll on Oahu residents.

Hoevel normally drives around the island for his boat repair business, but booked jobs close to home in Kailua this week to avoid traffic. Then on Thursday, Hoevel chose not to drive his daughter to her school near Honolulu Airport to avoid the delays caused by the arrival of Chinese President Hu Jintao, which included heavily armed soldiers and Humvees blocking major intersections.

"I hope somebody gets that $123 million," Hoevel said, "but it's not going into my pocket."

Security checkpoints set up Friday slowed traffic into Waikiki to a one-lane crawl.

All of the security to guard the heads of APEC nations has turned Waikiki into a "war zone," said Waikiki Neighborhood Board Member Les Among. "Was it worth it?" Among asked. "No. This isn't worth it at all."

State Sen. Sam Slom (R, Diamond Head-Hawaii Kai), who is also president and executive director of the Smart Business Hawaii organization, does not believe that APEC will give Hawaii the $123 million economic boost that was promised. "From the beginning those predictions were overly optimistic," he said. "I predict we'll actually lose money, particularly down in Waikiki."

APEC heads of state and their staffs are in town for serious work, not to shop, Slom said. And all of the security designed to protect Obama and other world leaders has kept local residents from spending money in Waikiki, which has resulted in some businesses temporarily closing this week, he said.

"The bottom line is there is very little -- if any -- economic benefit," Slom said. "At worst, we have lost a lot of business."

Lt. Gov. Brian Schatz said he and other APEC supporters have long been telling Hawaii residents that APEC will produce important long-term -- rather than short-term -- benefits.

"APEC exposes us to hundreds of millions of people across the globe who otherwise wouldn't realize the opportunities Hawaii has to offer," Schatz said Friday. "People understand that we have to more directly engage throughout the Asia-Pacific region in order for Hawaii's economy to thrive. This meeting is part of a strategy that has to be undertaken over time, and we have to show that we're committed to this strategy that extends well beyond (APEC's) Leaders Week."

By the middle of next week, the Hawaii Tourism Authority will have an estimate on the dollar value of Hawaii's media exposure from APEC, Schatz said.

"We expect it will be into the tens of millions of dollars," Schatz said. "Needless to say, it's good international exposure."

By the end of the year, Schatz hopes that the actual money generated by APEC will be calculated in a study commissioned by the HTA and state Department of Business, Economic Development and Tourism.

Keith Vieira, senior vice president and director of operations for Starwood Hotels & Resorts in Hawaii and French Polynesia, said APEC has attracted a more sophisticated group of visitors who are spending money in ways unlike Hawaii's typical leisure tourists. "The revenue will be what we expected," Vieira said. "It's just going to be in a less traditional way."

Starwood's room service business, for example, is up "significantly" this week because APEC staff are ordering working meals in their hotel rooms as early -- or as late -- as 4 a.m.

Waikiki hotels are generating additional revenue by hosting APEC functions and dinners, Vieira said.

"These are the types of individuals that tell their friends, higher peer groups, about what a wonderful place Hawaii was both for business and for vacation," Vieira said. "There couldn't be a better example of Hawaii situated to handle more international business, especially from the Pacific Rim."

After five days of APEC events, sales at ABC Stores' 38 Waikiki shops "are still a little soft," CEO Paul Kosasa said Friday. Although ABC Stores loaded up on merchandise, Kosasa was focusing on bigger, future benefits.

"It's the post-APEC that's going to really benefit our economy," Kosasa said. "We just have to suffer a little pain, but it'll be beneficial in the long term."

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