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EditorialIsland Voices

Column: How to bring back tourism

CINDY ELLEN RUSSELL / CRUSSELL@STARADVERTISER.COM
                                Keith Vieira is principal of KV & Associates Hospitality Consulting.

CINDY ELLEN RUSSELL / CRUSSELL@STARADVERTISER.COM

Keith Vieira is principal of KV & Associates Hospitality Consulting.

Monday’s announcement by the governor to open the state to interisland travel on June 16 is an important first step. It’s clear that putting processes in place to protect our community are well underway.

While this work needs to continue, the commitment to a firm date for reopening inbound tourism coordinated with removing the 14-day quarantine does NOT need to wait, unnecessarily prolonging the devastating damage to our economy. Government leaders need to trust in the visitor industry’s collective capacity and resolve to intelligently work through the details, and allow for a refocus to aggressively reshape tourism and our economy for a healthier Hawaii.

Our industry, with its numerous visitor- reliant small businesses, is at a tipping point. Beyond the obvious revenue crash — with cash and credit bottoming out and the end of eight weeks of the Paycheck Protection Program imminent — too many businesses have made the devastating decision to shut down. The volume of businesses on that decision edge is expo- nential: do they close, release employees, or try to hang on for reopening?

We also are dependent on a labor-intensive ecosystem of employees and partners outside of Hawaii, from airlines and airports, to travel agencies, wholesalers and group producers.

Resorts, the equivalent of “mini-cities,” need time for massive detailed communication and re-training, and highly integrated inter-departmental coordination to ensure meticulous implementation of extensive sanitation and COVID-19 safety measures crucial for employees and guests. We also cannot forget that long-haul travel is not a quick buying decision — turning on the spigot is not immediate. The industry needs a minimum of 30-45 days to simply function, and more notice allows us to reach out to consumers who already are making the decision to travel to destinations like Las Vegas, the Caribbean and Greece, which have already announced reopening dates. We need a date now.

This pandemic presents us with an unwelcome yet unique opportunity to address decades-old issues: the need for sustainable tourism and a more balanced economy. The slow pace at which tourism is projected to return provides a rare opportunity to implement strategies at a manageable pace.

Diversification of our economy is not an issue that can be solved by the visitor industry. Still, visitors generated $1 billion in general excise taxes on an estimated $18 billion in spending, and the transient accommodations tax generated $600 million of state revenue in 2019 (only $79 million went to tourism marketing). With these, the visitor industry provides a foundation to support investment in diversification initiatives.

We have long made concerted efforts to weave initiatives into business plans that directly support industry outside of tourism: buying and promoting local products, and supporting natural resources and nontourist sectors such as cultural immersion programs.

Sustainable tourism

Designing structural change to build a sustainable future for tourism lies in initially focusing on three areas: reassessing our measures for success, transient vacation rentals (TVRs), and managing visitor impact.

We need to reassess the wealth of data we collect on those measures that drive decision-making and best reflect the values and goals of our community. The most traditional measures of industry success have been to count visitor arrivals and how much an average visitor spends each day. The latter remains highly relevant; however, visitor arrival counts require a serious re-look.

>> Average dollars spent per person (visitor) per day, or PPPD, should continue as a key impact measure: understanding a visitor’s financial contribution to support our economy is fundamental to how we weigh the cost-benefit of tourism. When visitor arrivals increased from 7 million to 10 million between 2009 and 2019, traditional hotel inventory remained relatively flat. The increase was largely attributable to TVRs and, to a lesser extent, timeshares. PPPD data then tells us that the TVR PPPD is notably lower than that of a guest staying in a traditional resort hotel. From a decision standpoint, PPPD helps us to invest marketing dollars to attract the higher-value resort consumer.

Visitor arrivals, the infamous 10 million mark that we hit in 2019, is a relevant data point but a distraction from more useful measures. Does knowing that 10 million people arrived in Hawaii mean as much as knowing the daily visitor census — how many people are traversing our roads, beaches and hiking trails on any given day?

And let’s drill deeper into the daily visitor census: How many visitors are in any given place and at any given time? Identifying specific measures to address high-challenge areas is probably the most important and practical solution to building a sustainable industry that contributes economically and balances the needs of our community and natural resources.

>> Knowing that the last 3 million in visitor arrivals primarily came by way of uncontrolled TVR growth points to a need to distinguish TVR issues and solutions from that of the traditional hotel resort. While a part of tourism, TVRs warrant greater focus by government leaders and neighborhoods to find a healthy place for them in our economy. They are, by nature, difficult and costly to control, and reopening tourism to TVRs should be delayed until there is a structure for management and enforcement.

>> The projected trickle of visitors as we recover makes the implementation of strategies and tools far more manageable, and there will never be another time when we all will be as motivated and acutely aware of how much we need tourism to return, while safeguarding our infrastructure and natural beauty.

As explained by Frank Haas and James Mak of the University of Hawaii Economic Research Organization in their April 29 report, “Can Hawaii Rise from the Ashes of Covid-19 as a Smart Destination?”: “The problem isn’t so much that Hawaii has ten million visitors, but that we have, for example, a few hundred people congregating in a site that can only accommodate a handful.” They discussed the use of smart technology and best practices already used in destinations around the world as possible solutions to influence the flow of visitors to manageable levels at select sites. It’s an excellent resource, if not a roadmap, citing numerous examples requiring visitors to make appointments and pay ahead. This is also an ideal time to implement programs that allow our natural resources to renew and perhaps allow days limited to residents only.

No reason to wait

There is no reason to wait any longer to commit to a date for reopening inbound tourism, with coordinated removal of the 14-day quarantine for visitors. There indeed are crucial details that will require resolution, but we ask leadership to trust in our capacity to navigate through the fine points, and in our ability to evolve in alignment with government.

This singular decision — the commitment of a target date — would trigger concerted efforts to rebuild our economy, give our employees and community hope, and reshape tourism for the long-term health of our islands.


Keith Vieira is principal of KV & Associates Hospitality Consulting.


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