The Hawaii Tourism Authority (HTA) reported this week that occupancy at Hawaii hotels topped 61% in May — the highest statewide monthly occupancy since February 2020, when the COVID-19 threat was just surfacing and occupancy was holding steady at nearly 85%.
The outlook for next month — about 30,000 visitors arriving daily, after the Fourth of July weekend — could return Hawaii to a pace matching pre-pandemic visitor arrival counts, finally. That’s highly encouraging for Hawaii’s devastated economy, even as the Hawaii Hotel Alliance noted that this spring’s occupancy figures still fell below the level that most Hawaii hotels need to address pandemic-related losses.
So the notion of remaking HTA at this critical moment is misguided, as the agency is engaged in a long-term strategic plan, unveiled in 2020, for tackling valid concerns that started emerging during the pre-COVID years of record-breaking tourism. Among them: infrastructure burdens, overcrowded beaches and sites, and illegal vacation rentals in residential neighborhoods.
In announcing his intent-to-veto lineup Monday, Gov. David Ige rightly included House Bill 862, which would hamstring the agency’s ability to fund its ongoing shift to “destination management” built around four pillars: natural resources, Hawaiian culture, community and brand marketing.
At the core of the HTA’s efforts, Ige said, is an effort to mitigate resident-visitor “friction points” to strike a more sustainable balance in affected communities.
In a meeting with the Honolulu Star-Advertiser’s editorial board on Tuesday, Ige said changes at Haena State Park serve as a model.
In response to the park’s popularity among visitors — which resulted in rampant illegal parking along a narrow highway — the state, in tandem with Kauai’s north shore community, drafted a plan for a reservation-voucher system. Launched in 2019, it limits entry to a more-manageable daily count of about 900 visitors, down from previous all-comers counts of up to 3,000.
If HB 862 becomes law, it would strip HTA of its dedicated source of annual revenue, which complicates the securing of funds needed for current work and long-range planning.
The measure would make functional changes to the tourism authority and eliminate transient accommodations tax (TAT) distribution to the agency as well as Hawaii’s counties. It would replace HTA’s normal $79 million annual TAT distribution with $60 million in federal funding from this year’s American Rescue Plan Act. The bill also would eliminate a useful procurement exemption, thereby requiring HTA to get state approval at each turn on future contracts and purchases.
Another negative upshot: The bill would limit HTA’s authority in operating the Hawai‘i Convention Center to a $11 million ceiling — far below the estimated $54 million needed annually to attract events, which can further advance recovery from tourism’s flat-lining months at the height of the pandemic.
At the start of the 2021 legislative session, lawmakers were grappling with economic fallout tied to the shuttering of most of Hawaii’s tourism industry for the better part of a year, which had depleted TAT and general excise tax revenues. The Legislature appears to have advanced HB 862, in part, as a means to help stabilize state finances.
However, due to brighter economic projections for the state, along with new federal guidance restricting the use of COVID-19 relief money — both surfacing after the session wrapped up last month — HB 862 is among several measures now in need of veto or revisions.
State officials are poised to soon ease COVID-19 testing and quarantine requirements for fully vaccinated mainland visitors, thereby further opening the gates for a surge in tourism. Rather than undermining HTA’s efforts, the state should give the agency opportunity to fully execute its blueprint for improved tourism management.