Competition heating up for Hawaii Tourism Authority’s U.S. contract

Hawaii Tourism Authority’s longest-running contractor, the Hawaii Visitors and Convention Bureau, may face strong competition for a lucrative contract to supply tourism destination brand marketing and management services for the United States Major Market Area, the islands’ largest visitor source market.

Ronald Rodriguez, HTA procurement officer/senior contract specialist, told the Honolulu Star-Advertiser in an email that 27 entities have registered their intent to apply to a request for proposals for the United States Major Market Area contract, (RFP) 22-01.

Rodriguez clarified that “this may include those registering as a partnership or subcontractor of a primary contractor. Registrants were not required to disclose partnership or subcontractor status when submitting their intent to apply.”

The deadline for proposals is Nov. 12 at 4:30 p.m. Finalists will be selected and notified the week of Nov. 22. Finalists will do oral presentations the week of Nov. 29. HTA expects to issue a notice of award the week of Dec. 6.

Not all of those expressing interest may complete the process. Still, early interest is significant given that in 2016, the last time that HVCB submitted an RFP for HTA’s largest contract, it was the only applicant for the five-year contract worth more than $104.9 million.

HVCB, whose roots go back more than 100 years, predates the creation of HTA by the state Legislature in 1998. The nonprofit HVCB is so intrinsic to Hawaii tourism that HTA has awarded 10 contracts to the bureau since 2016 totaling $145.9 million. HVCB and its island chapters currently employ about 48-1/2 full-time workers, down from 66 before the pandemic.

HVCB told the Star- Advertiser earlier this month that it intended to apply for the most recent U.S. contract, which is opening because the statutory limit on its current contract ends this year.

While the new scope includes destination management, HVCB’s island chapters have been involved in destination management for some time. HTA also awarded HVCB a $9.4 million sole-source contract earlier this year to oversee new destination action management plans and community enrichment programs, and to develop a universal reservation system.

HTA President and CEO John De Fries said the new RFP will be the first procurement under HTA’s new paradigm, and as such has been modified to align with its new vision of “Malama Kuu Home” (“Caring for My Beloved Home”) through the principles of “regenerative tourism.”

“Because (the U.S. market) is such a substantial market, it’s going to be essential that we establish the right mindset in the visitor prior to them getting here and once they are on the ground here,” De Fries told the Star-Advertiser during an interview late last month. “This is not an easy task. We are talking about kind of reshaping human behavior. But one of the things that we have learned during this pandemic is that the community has a higher expectation and standard that the community would like to see in visitors when they come to our home. The contractors are now bound by our intent in keeping the management and the marketing together and linked.”

The new U.S. contract, which will help HTA complete its pivot to a greater focus on destination management than brand marketing, is expected to commence Jan. 1 and run through Dec. 31, 2025. However, it could end Dec. 31, 2026, if HTA exercises a one-year option.

The RFP says that HTA is seeking a destination management contractor who, in addition to providing brand marketing in the major market area, can also provide communication, facilitation, collaboration, and promotion in Hawaii for initiatives produced by the community through the Destination Management Action Plans (DMAPs) which were published in 2021.

HTA Chief Brand Officer Kalani Ka‘ana‘ana told the Star-Advertiser during an interview late last month, “If the Hawaiian Islands are continued to be portrayed as a playground in paradise, we’re going to get that kind of expectation in the minds of potential travelers.

“But if you look at what we’ve done, we are really trying to reshape the Hawaiian Islands to a place of authenticity, deep cultural heritage, one of sustainability,” he said.

Ka‘ana‘ana said the branding or the marketing piece is an incredible tool for destination management as “we start to shift in the visitors’ minds or potential visitors’ minds who we are, the values we hold, and why this place is so unique and special and why it needs their protection and how they can join us in the effort.”

Fulfilling those goals will be a tall order, according to a recent blog post on the University of Hawaii Economic Research Organization website called, “Hawaii Needs to Focus on Developing Good Governance in Managing Tourism.” The post was authored by local economist Paul Brewbaker, UHERO researcher James Mak and former HTA marketing director and tourism consultant Frank Haas.

They write in the blog, “Hawaii has been very good at crafting tourism plans that involve broad community input. The problem has been ineffective implementation due to ineffective governance.”

The three said in the blog that “the action plans don’t consider what it would cost to implement the proposed actions or where the funding will come from. That makes it hard to evaluate the benefits versus costs of implementing these actions. It is a serious shortcoming as State lawmakers passed legislation during the last session requiring HTA to compete for funding from the general fund; moreover, there is no guarantee that other agencies have funds available for DMAP projects.”

The three said a system is needed “that is able to govern tourism across jurisdictions, agencies, functions and stakeholder groups.”