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APEC boosts isles' image as serious meeting place

By Andrew Gomes

LAST UPDATED: 1:58 a.m. HST, Nov 15, 2011

Early indications are the Asia-Pacific Economic Cooperation conference might not have drawn 20,000 visitors nor added $165 million to the economy as forecast, but it likely gave Hawaii something of more value: a new image.

The state showed it can handle a conference of global political and business leaders that dispels a common notion that Hawaii is no place for serious meetings.

"That's the primary payout," said Leroy Laney, an economics and finance professor at Hawaii Pacific University. "I think in that regard it's a success."

Even the decision by President Barack Obama to forgo wearing aloha shirts for a photo of leaders from 21 nations, which some bemoaned as a blow to Hawaiiana, may have been just what the state needed.

"That was a good move," said Jerry Agrusa, a travel industry management professor at Hawaii Pacific University. The decision produced a picture in an oceanfront setting of serious-looking leaders in suits instead of aloha shirts.

"That said we're here for business," Agrusa said.

Efforts to analyze costs versus benefits for hosting the conference are under way, but a quick accounting won't be available and a definitive answer might possibly never be obtainable.

Hawaii's APEC host committee said it was gathering data on arrivals but didn't have figures Monday. The U.S. State Department wasn't able to provide that information either on Monday.

State figures show visitor arrivals to Hawaii in November through Sunday were up by only 0.4 percent, or 1,112 people, compared with the same 13-day period last year.

The state never competed to host APEC to make money, said Lt. Gov. Brian Schatz.

"This is a long-term investment," he said, emphasizing that Hawaii's meetings and conventions market will benefit most from thousands of media reports around the world that let people know serious international business and political issues were discussed in Honolulu.

"Hawaii is beautiful -- everybody knows that," he said. "I'd rather be in The Wall Street Journal (with Hawaii) just mentioned as a location."

A Google News search returned just over 8,000 stories mentioning APEC and Hawaii on Monday. However, the APEC Hawaii host committee reported that about half the 2,500 expected journalists, or 1,200 registered media, covered the summit.

Peter Ho, APEC host committee chairman and chief executive of Bank of Hawaii, said worldwide media coverage far exceeded committee expectations.

"From the beginning we have always understood that the short-term economic gain was not the primary benefit of hosting APEC," he said. "Our goal was to strengthen our image as an attractive place to do business."

Mark Dunkerley, chief executive of Hawaiian Airlines, suggested that concentrating on the short-term view or traffic expense is shortsighted, saying, "If you believe (APEC was) not worth it, what kind of aspiration do you have for your community?"

At the short-term level, some local businesses and workers cashed in on APEC, while others lost money. Agrusa said negative effects mainly tied to security barriers that excluded customers and workers from routines amount to a relatively small loss.

Schatz said it's possible that direct spending by APEC visitors could turn out to be lower than projected, but he said state expenditures to host the event also might be lower.

The original estimate that APEC might bring as many as 20,000 people was made by the State Department. An August 2010 study commissioned by the state used a more conservative figure of 17,355 to project the economic impact of APEC.

The study produced by local firm OmniTrak Group estimated that people visiting Hawaii for APEC would spend $73.7 million, which when combined with trickle-down spending, income and state taxes, would have an estimated total positive impact of $165.1 million.

The city budgeted $44 million for APEC, including $18 million for police and $10 million for contingency expenses.

Honolulu Police Department spokeswoman Michelle Yu said it could be a week or more before payroll figures are calculated and APEC-related spending can be tallied.

Honolulu Fire Department spokesman Terry Seelig also said it's too soon to figure out how his department's $7.8 million budget for APEC compared with actual spending.

Infrastructure improvements to Waikiki hotels, Honolulu Airport, Nimitz Highway and other things were made leading up to APEC at a cost of $137 million.

But government and tourist industry officials have said those projects, dominated by $74 million from the private sector, were planned without specific regard to APEC but were, in some instances, started sooner to be done before the event.

While the complete cost analysis may be months away, many business leaders in Hawaii say the long-term benefit was worth it no matter how much it cost.

APEC drew CEOs from some of the biggest companies in the world, who were shown that Waikiki isn't just a leisurely vacation destination.

Now "they see this as a potential future business meeting destination," Agrusa said.

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