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The Hawaii Tourism Authority is cutting marketing budgets for Canada and Europe and reinvesting funds into other priorities, including diversifying and managing tourism and programs that benefit the community.
HTA will reduce its Canada marketing budget from $2.2 million to $800,000, with plans to deploy some $1.4 million of the market’s unencumbered funds into career development for Hawaii’s youth and marketing the islands in Southeast Asia again. HTA also cut its marketing budget for Europe from $850,000 to $400,000 and is working on a plan to redeploy the extra $450,000.
Visitors arrivals from Europe, including the United Kingdom, France, Germany, Italy and Switzerland, increased in 2018 by more than 3 percent to 144,182, but the market historically has a small Hawaii footprint.
Canada, Hawaii’s fourth-largest visitor market behind the U.S. West, U.S. East and Japan, ended 2018 with arrivals up almost 3 percent to 533,879 and a spending rise of nearly 6 percent to almost $1.1 billion. However, arrivals and spending from Canada fell in December. The market also began this year with a 1 percent drop in arrivals to 68,462 and a greater than 2 percent dip in spending, which fell to $167.6 million.
HTA President and CEO Chris Tatum told the HTA board Thursday that last year the agency tripled its Canada marketing investment without seeing improvement.
“Our expenditure prior to tripling was $800,000, which is about where we are now. I believe it’s enough to be positioned in that market. A lot of things that we do in North America also impact Canada,” Tatum said.
In 2016, a prior HTA administration controversially took Canada away from the Hawaii Visitors and Convention Bureau, which had marketed the mainland U.S. and Canada together for years, and awarded the marketing to VoX International. Over time, HTA poured more money into the contract.
The latest reductions come as economic growth is slowing in Canada and the nation’s consumer confidence ratings are weak compared to 2017 and 2018. HTA reports “key Canadian air and vacation partners have reported a sluggish booking pace starting from the fourth quarter of 2018 with an improvement not expected until later in the first quarter of 2019.”
HTA plans to reallocate $500,000 of the unencumbered funds from the Canada market to partner with the Hawaii Lodging & Tourism Association to start a public high school scholarship program. It will target students interested in pursuing careers in the visitor industry by attending college within the University of Hawaii system.
Mufi Hannemann, HLTA president and CEO, said the program is a response to a desire to see more tourism executives come from Hawaii.
HTA also plans to reallocate $200,000 in unencumbered funds from the Canada market to renew a lapsed contract with AviaReps to begin marketing in Southeast Asia again. Under the prior HTA administration, the Southeast Asia marketing program had been cut.
“We recently attracted AirAsia out of Kuala Lumpur. They’re not 100 percent full and they’ve been struggling,” said Rick Fried, HTA board chairman. “They were somewhat unhappy we pulled out (marketing dollars). This will appease them and we hope it will help their occupancy.”
Tatum said HTA needs to continue investing in emerging markets and opportunities because “we can’t expect them to turn when they are needed.”
HTA will reappropriate the remaining $700,000 in unencumbered funds from the Canada market as needed.
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