Business trips account for about 9 percent of all travel and the segment is growing, so the state’s opening of the Hawai‘i Convention Center 15 years ago was expected to be a big boost in Honolulu receiving a large share. The result, however, has been disappointing.
A fresh approach — and perhaps new center operator — is needed, and overdue, in order to hoist overall business travel to Hawaii well above its dismal 5 percent average.
Philadelphia-based SMG, which operates more than 40 convention centers in the country, has managed Hawaii’s $350 million center since it opened. It now is among four companies proposing for a contract through 2018. SMG Hawaii and its competitors need to explain what has gone wrong and how they intend to double the amount of business travel, which many in the industry deem possible.
In the past decade, the Hawai‘i Convention Center reached its annual goal of 700,000 related room nights booked only once — in 2005 — and dropped last year to a low of 356,515. The convention market nationally has grown over the past two decades through new construction and expansion, which peaked a decade ago. "Significant pick-up" is expected nationally in 2014 and 2015, according to the Center for Exhibition Industry Research.
Hawaii must reposition now, and quickly, to capture some of this business.
"Competition among convention locations and cities is fierce," Los Angeles Administrative Officer Miguel Santana noted in a report last August.
That reality along with "savvy and sophisticated meeting planners led to an expansion and renovation boom in the convention center market," he added.
Clearly, Hawaii’s marketing for convention center business has not kept up with that of other destinations. While SMG gets high marks for running conventions once they are in Hawaii, it’s chronically fallen short in attracting business here to begin with. Recognizing this, there’s an attempt to be more aggressive with the just-formed "Meet Hawai‘i" effort, which combines the sales and marketing teams of the convention center and Hawaii Visitors and Convention Bureau and taps the Hawaii Tourism Authority’s international marketing contractors.
The approach holds promise — or at least, puts some needed attention on drumming up more business travel.
Of course, another perennial battle, unique to tropical destinations like Hawaii, is the misguided perception that the 50th State is a place of fun and sun only.
Wrong. Hawaii is an ideal place to meet and do real business, particularly in this refocused Asia-Pacific era.
That’s the business message that constantly needs to go out, as evidenced last week when only 650 delegates attended the annual meeting of the National Conference of Public Employee Retirement Systems, compared with the 1,000 at last year’s meeting in New York. Detroit’s emergency manager went berserk upon learning that four public pension trustees attended the Hawaii meeting at the city’s expense, researching whether he could fire them.
In actuality, attending the New York meeting had been more expensive, with room costs twice the rate in Honolulu. A pension trustee at Peoria, Ill., explained that he stayed away from New York but attended the Honolulu meeting because of the cost-saving.
It is the boondoggle-in-paradise image that the Hawaii convention manager must address. While convention hosts on the mainland may look for ways to enhance regular activities on their agendas such as city tours, sightseeing, sports and entertainment events, Hawaii faces the opposite problem.
The convention and meetings industry tends to lag 12 to 18 months behind the broader economy, so a rebound should occur soon. The company chosen to operate the center through the next five years cannot rely on that prognosis. It must find a creative way to counter the exotic junket reputation and nurture the reality of Hono-lulu as a worthwhile location for business and government people to convene. The chosen manager must bring a game plan to ensure that the Hawai‘i Convention Center, which opened with such high hopes 15 years ago, lives up to its potential.
