The Hawai‘i Convention Center has lost a lucrative 17,000-person American Association of Orthodontists meeting to Miami because the state could not guarantee what its COVID-related travel restrictions and social distancing requirements would look like next spring.
Teri Orton, general manager of the Hawai‘i Convention Center, said the facility had been on track to have its best year ever in 2020, and then COVID hit, instantly decimating the market. Among the losses was the Rotary International Convention, which had been expected in June 2020 to bring 20,000 attendees, making it the state’s largest piece of group business that year.
Orton said the convention center was able to push most of 2020’s group business into new dates. However, she said the closer a group gets to its date, the more that lingering uncertainty about requirements matters. The convention center will have to rebid on the orthodontist association’s annual meeting, which had been slated to meet in Honolulu from April 27 to May 4 and was the biggest piece of scheduled business on the center’s books through 2035, Orton said.
“AAO was a huge loss for our state. Their meeting planner needed to know today what she needed to plan for in April,” Orton said. “I couldn’t guarantee her, nor could anyone in government, that there won’t be restrictions.”
So the orthodontists are taking their convention to Miami.
Brian Lynx, area director of sales and marketing for the Outrigger Waikiki collection, said Hawaii’s track record with COVID safety should have given it an advantage in the risk-averse group business travel market. Also, Lynx said ease of access to the islands from North America has never been better thanks to an influx of airline seats, the most ever supporting the domestic market. Planners also have a greater pick of hotels at a range of prices since Hawaii’s leisure market is still recovering, too, he said.
“There’s never been a better time to negotiate because hotels need the business, too,” Lynx said. “We’re beginning to see interest. Our group leads are up 1,500% from the previous month. But they are just inquiries; very few are looking to confirm contracts.
“I think we need to get our act together in the next two months max so that we have no more limbo, so the destination message is crystal clear and that the world knows we are open for business again.”
It’s difficult for Hawaii to compete when other U.S. destinations already have removed COVID testing requirements for fully vaccinated travelers, and most have removed masking and social distancing requirements, especially those that apply to professionally organized meetings, conventions and incentive travel.
Added to that is the fear that the counties could implement a 30% hike, or 3-percentage-point increase, in the transient accommodations tax, which could drive up hotel prices, hitting the group business segment hard, said Stephanie Donoho, administrative director of the Kohala Coast Resort Association.
Orton said a reason Hawaii lost the orthodontist convention to Miami is that Florida doesn’t have any travel restrictions, which is in sharp contrast to Hawaii.
Trans-Pacific travelers still have to comply with the requirements of Safe Travels Hawaii, which requires a negative COVID test from a trusted travel partner. Gov. David Ige has said the state would end Safe Travels when 70% of Hawaii’s population is vaccinated for COVID, but it’s not certain when or whether that will occur.
Oahu finally created a pathway for group business to begin returning to the island on March 11, when it moved into its Tier 3 reopening strategy, which allowed restricted gatherings, meetings and events. But Orton said that’s also the point where Hawaii started to fall behind other competitive destinations, since most were already lifting group business travel restrictions. Even Los Angeles, one of the slower destinations to open back up to group business travel, got the green light in April, she said.
The movement into Tier 4 on Friday provided some additional ability to recoup group business travel since it would finally allow groups to host trade shows and exhibits at 50% capacity instead of just holding static events, which are those where participants reserve a seat, attend the event and leave without intermingling.
Tier 4 is much less restrictive than Tier 3, but meeting planners still may have to contract larger spaces to accommodate groups than they would have prior to the pandemic, and they’re not always available or in the budget. Orton said some meeting planners, who had business on the books before the pandemic, now have to change venues completely or redesign their programs.
Orton said the convention center’s first offshore citywide conference since the pandemic began is Best Western, which will bring about 2,200 delegates to Hawaii in October.
“We’ve had to redo their entire program because of social distancing and food and beverage requirements,” she said. “They are needing more space now: Where they would normally need one meeting room, they now need two.”
Orton said the convention center is doing the same for the three other small meetings — a convention or event that is large enough to fill multiple lodging and other venues — that make up the remainder of 2021.
Hawaii’s visitor industry has invested heavily in improving the state’s positioning as a business destination.
Business travel is historically a small segment, accounting for only 467,231 of the 10.4 million visitors who came in 2019. However, it’s a far more important segment for Hawaii’s overall visitor recovery than the numbers suggest. It builds a base of business that allows lodging to leverage leisure prices. It’s also one of the most labor- intensive segments of Hawaii’s visitor industry, so its recovery is necessary to bring back more workers.
Establishing Hawaii as a place to do serious business has always been a challenge, given the strength of Hawaii’s leisure tourism brand, which has led some to perceive it as a “boondoggle destination.”
A major pivot in Hawaii’s bid to be perceived as a serious group business venue came in 2011 when the Asia-Pacific Economic Cooperation brought 21 member economies to Hawaii. The high-profile international business and government event helped establish Hawaii as a crossroads of the Pacific.
The event, which was the first APEC summit to be held in the United States since 1993, brought about 15,000 world government and business leaders and an entourage including support staff, security, media and friends and family to the isles. It also filled hundreds of thousands of hotel room nights during Hawaii’s off-season.
APEC helped Hawaii become the first U.S. venue to play host to the World Conservation Congress, which brought conservationists from 160 nations to Hawaii when it was held in September 2016. That was the same year that the Hawai‘i Convention Center, which opened in 1998, turned its first profit.
HCC is far from turning a profit this year.
Duke Ah Moo, Hilton vice president and commercial director for Hawaii and French Polynesia, said that during the height of the pandemic, most groups on the books canceled or re-booked, and the number of new, prospective groups slowed down significantly. Ah Moo said weddings and small social groups are traveling now, and group business travel is in recovery mode, with lots of interest for arrivals beginning in fall 2021 and beyond.
But he said Hawaii’s group business segment has been coming back “much slower relative to other locations with fewer restrictions.”
“There are no clear guidelines on the ability to hold large group gatherings yet,” Ah Moo said. “Groups are hesitant to confirm due to quarantine and restrictions on gatherings.”
Ah Moo said Hawaii still has many more restrictions than alternate destinations such as Florida, Las Vegas and California. And, Safe Travels’ entry requirements and the lack of travelers from international destinations, which love to reward their employees with incentive travel to Hawaii, continues to be a challenge.
Ah Moo said recovery of the group travel market “is important to drive demand during off-peak period such as during the fall,” and because it “provides job opportunities for all of the banquet-related activities.”
Still, there are signs that there is potential in the group business group travel market,which is doing better at some neighbor island venues, said Brad Doell, director of sales and marketing at Mauna Kea Resort.
Doell said the visitor industry on Hawaii island worked with Hawaii island Mayor Mitch Roth to create a process to allow group business travel to return, and results have been building since April.
“Companies are loosening their travel restrictions, and Hawaii has definitely been designated as a place that’s being approved to travel to,” Doell said. “The appeal is there, outside of having to take a COVID test before you get to the islands, which some companies may have found kind of a hindrance in the past. Other companies are finding (testing) as a positive to ensure that their group is COVID-free on their way over to the island.”
TIER 4 RESTRICTIONS
Honolulu Mayor Rick Blangiardi on Friday announced the move to Tier 4. Some of the guidelines:
>> Social gatherings outdoors allowed with up to 25 people.
>> Social gatherings indoors allowed with up to 10 people.
>> Indoor organized sports are allowed; spectators are allowed at up to 33% capacity (subject to Department of Parks and Recreation permitting and availability of the facility).
>> Commercial recreational boating allowed without capacity limit. (Restaurant/bar rules apply if food/beverage consumption is allowed.)
>> Social establishments such as dance/nightlife/karaoke are allowed up to 50% capacity if all attendees are tested or show proof of full vaccination.
>> Outdoor weddings are allowed with up to 200 people.
>> Indoor events such as concerts, meetings and conventions are allowed with a mitigation plan and 50% capacity if all attendees are tested or show proof of full vaccination.
>> Outdoor events at venues with defined capacity limits are allowed with a mitigation plan, 33% capacity or 67% capacity if all attendees are tested or show proof of full vaccination.
>> Outdoor events at venues without defined capacity but have controlled ingress and egress are allowed with a mitigation plan, at 30 individuals per 1,000 square feet or 60 individuals per 1,000 square feet if all attendees are tested or show proof of full vaccination.
>> Arcades are allowed without capacity limit. (Restaurant/bar rules apply if food/beverage consumption is allowed.)
>> Road races and triathlons allowed with a permit; starting group size subject to gathering size limit.
For more detailed information on the movement to Tier 4, please view the City and County of Honolulu’s Reopening Strategy at oneoahu.org/reopening-strategy.
Source: City and County of Honolulu