Hawaii Tourism Authority reorganizes as politicians consider its fate

The Hawaii Tourism Authority has eliminated two high-profile positions under a reorganization that emphasizes destination management at a time when politics is about to decide the fate of the beleaguered agency.

Kalani Kaanaana was promoted to chief brand officer July 1. Ka­anaana, who joined HTA in 2016, was previously its director of Hawaiian cultural affairs and natural resources, and is a much-respected member of the Hawaiian community.

At the same time, HTA eliminated jobs for veteran hospitality executive Pattie Herman and longtime television anchor Marisa Yamane. Herman had served as HTA vice president of marketing and product development since December 2019. Yamane, who left KHON2 to join HTA in May 2019, was director of communications and public relations. Both women were recruited by former HTA President and CEO Chris Tatum, a 40-year veteran of the hospitality industry who retired at the end of August.

HTA President and CEO John De Fries, who started at HTA in September, is the first Native Hawaiian to assume leadership of the agency.

De Fries explained the changes in an email to the Honolulu Star-Advertiser: “As HTA pivots towards being a more effective destination management organization that prioritizes our community and focuses on regenerative tourism, we are reorganizing our structure and operations so we can more effectively meet the needs and goals outlined in our 2020-25 Strategic Plan.”

HTA’s reorganization comes as dissatisfaction grows among both residents and visitors, prompting legislative criticism of the agency. It also comes as Hawaii legislators are set to meet today to consider veto overrides — including House Bill 862, a measure pertaining to HTA.

HB 862, which Gov. David Ige said he might veto, would make functional changes to the Hawaii Tourism Authority and eliminate transient accommodations tax distribution to the agency as well as individual counties.

The measure, passed this legislative session through an 11th-hour gut-and-replace effort, sought to eliminate the $103 million annual county share of revenue from the transient accommodations tax, or hotel tax. Instead of sending the money to the counties, the state would keep it. However, the counties would be empowered to impose their own 3-percentage-point TAT increases.

The changes outlined in HB 862 also would take away the dedicated transient accommodations tax funding HTA has had since its founding. The bill replaced HTA’s normal $79 million annual TAT distribution with $60 million in funding from this year’s American Rescue Plan Act. The bill would eliminate HTA’s procurement exemption, a move that would have required HTA to get state approval for all future contracts and purchases.

Ige said he was concerned that the “funding and functional changes” in HB 862 would “severely damage HTA’s shift to destination management.”

By putting HB 862 on their possible override list Friday, legislators have signaled that they expect to have enough votes for an override, which requires a two-thirds majority of the House and Senate.

Still, HTA’s reorganization could add to the uncertainty by causing supporters, on either side, to waffle.

The reorganization could appease some legislators, who wanted to see more destination management from HTA. However, it might alienate other lawmakers, especially some senators, who early in this year’s session had proposed language in the law that would have refocused HTA on marketing and branding.

There are those who see the reorganization as a continuation of the pivot toward destination management that emerged from the turbulence of 2018, when lawmakers proposed a bill to cut $30 million from HTA’s marketing budget and wanted to use the funds to offset tourism impacts.

However, some view the current changes as a knee-jerk reaction and are skeptical that HTA will ensure that targeted marketing to higher-spending visitors remains a part of destination management.

Prominent members of Hawaii’s visitor industry still are working to get Ige the support that he needs to overturn the measure. They only need a majority of one chamber — either 18 representatives or nine senators — to agree with them.

However, some of them are now torn.

A majority agree that the state should not empower the counties to raise TAT taxes at a time when tourism is recovering. But some are leery of HTA’s abrupt decision to eliminate its marketing and communications specialists during a pandemic when educating residents and visitors is critical to tourism’s recovery.

Keith Vieira, principal of KV & Associates, Hospitality Consulting, and an original HTA board member, said HTA should have been much more open with the visitor industry about its intentions.

“It’s scary that everybody went through all that they went through to maintain HTA, which was the right thing to do, and now they are going to gut it,” Vieira said. “What are we maintaining it for?”

Waikiki Improvement Association President Rick Egged was more comfortable with the changes.

“I’ve always been a firm believer that managing our destination is just as important as the marketing component,” Egged said. “We need to concentrate on doing the kind of marketing that makes sense for us as a destination. I think it’s a change in emphasis, not an elimination.”

The changes, which were approved during a lengthy executive session, have not been publicly announced by HTA, which had come under fire during the last legislative session among some lawmakers for a perceived lack of transparency and accountability.

Helping to spearhead HTA’s reorganization is Anna Elento-Sneed of the legal firm ES&A Inc., which was awarded an $80,000 sole-source contract by HTA.

De Fries told the Star- Advertiser in an email that “Contract 21027 was sole-sourced due to the complex nature of the change management strategy outlined in Hawaii Tourism Authority Resolution No. 2021-2-1 as approved by the HTA Board of Directors, the short period of time to accomplish this work, and given the contractor is uniquely qualified for the tasks needed based on Anna Elento-Sneed’s previous work on HTA’s first major reorganization in 2009.”

De Fries said the contract will cover seven months during which specialists will assist “with the development of training and coaching programs for staff to gain and maintain skills needed for HTA to become a more effective destination management organization and achieve our all-encompassing goal of Malama Kuu Home (caring for my beloved home) through regenerative tourism.”

During a June 11 HTA board and staff retreat tied to the reorganization, Elento- Sneed said of the state Legislature, “They sent a giant missile across your bow that has a timer on it.”

HTA expects to replace Yamane’s former job with a position called public affairs officer, which the organization has said would take a more strategic communications role, with an emphasis on government relations, media communications, issue management, corporate and social responsibility, and information dissemination.

HTA has said it would begin recruiting for the public affairs officer soon. But De Fries said the job of chief brand officer wasn’t advertised as it was directly inspired by Kaanaana’s “commitment to the regenerative tourism model.”

“His knowledge of state government systems and experience in working with our Global Marketing Team are key skill sets that he will leverage to support the components proposed in HTA’s change management plan,” De Fries said. “As a Hawaiian cultural practitioner and native speaker, his awareness and respect for our natural environment is shaping HTA’s approach to destination management and stewardship. Kalani is a rare talent who has earned the respect of his peers and a host of community leaders throughout our state.”

De Fries said HTA also is transitioning staff into new cross-functional teams who will work with Kaanaana on brand management and regenerative tourism.

“These changes, and others we hope to implement, will enable HTA to accomplish the destination management work Hawaii residents are counting on us to do.”

De Fries said as of July 1, HTA has 25 authorized staff positions, down from 32 prior to the start of the fiscal year. De Fries said this year’s Legislature moved seven positions from HTA to the Department of Business, Economic Development and Tourism’s Research Division.

De Fries said that at the end of July, HTA expects to have 18 staff positions, assuming that the seven vacancies go unfilled.

De Fries said the annual salaries of the 25 authorized positions prior to the reorganization totaled $2,271,972. The annual salaries after the reorganization will total $2,152,620.

“This equates to a total savings of $119,352, in part due to voluntary salary reductions by three senior executives to support the reorganization plan totaling approximately $36,500,” he said.