Hawai‘i Tourism Authority faces critical week

The Hawai‘i Tourism Authority faces its most critical week since its 1998 creation as lawmakers consider a state budget that could zero out its funding or drastically reduce it, and begin the final push in advance of Friday’s decking deadline on two bills that could repeal the agency.

The state budget bill, House Bill 300, is slated to go to conference today at 4:30 p.m. in Room 309. The current appropriation in the Senate version of the budget bill is zero, while the appropriation in the House version is $35 million, but that’s a cut of more than 50% from the $75 million that HTA requested this legislative session.

If the budget bill gets passed without an adequate appropriation for HTA, the stakes would get higher as the bills to repeal HTA would become the vehicle to fund state tourism marketing and destination management. HTA got only $35 million of its $60 million request from 2022 after lawmakers left HTA out of the state budget bill and then couldn’t come to terms on the bill that contained HTA’s funding.

HTA could find itself in a similar predicament this year, too, if all of the moving parts this week fail to align. What happens next could include many scenarios, from lawmakers keeping HTA at the status quo to a major shake-up that upends what has been the state’s key tourism agency for 25 years.

HTA Vice Chair Mike White, a former state legislator, told the Star-Advertiser on Sunday, “This is a very critical week. Even if HB 300 is involved in a hearing tomorrow (Monday), I don’t think you’ll see resolution of the HTA situation this early in the week.”

Colin Moore, associate professor at the University of Hawaii Economic Research Organization, said, “The Legislature clearly wanted to make a big change this year. Both of these bills seemed like the kind that are introduced to kind of force a conversation, but now they are at the end and I think neither one of them has been vetted the way it ought to have been and there’s a whole lot of confusion.”

He said he hopes lawmakers fund HTA in the budget bill and fail to reach consensus on the bills to repeal HTA. Moore added that revising tourism governance deserves a more thoughtful process like the governance study bill that failed to advance this year or a blue- ribbon commission similar to what state lawmakers designated for ethics reform.

White said HTA plans to discuss conducting its own governance study at its monthly board meeting Thursday. He said HTA is hopeful that lawmakers will see “the incredible amount of positive things that HTA has done” and see their way clear to leaving HTA in place and fully funding its request for $75 million for the HTA and $64 million to repair the Hawai‘i Convention Center’s leaky rooftop.

The Senate has appointed conferees to hear Senate Bill 1522, introduced by Senate Committee on Ways and Means Chair Sen. Donovan Dela Cruz (D, Wahiawa- Whitmore-Mililani Mauka), which under the current version would repeal HTA to create an Office of Destination Management within the Department of Business, Economic Development and Tourism. The new agency would be governed by a nine-member board, an executive director and a tourism liaison officer. The bill does not yet appropriate funding for the new agency or the Hawai‘i Convention Center, and it doesn’t address the number of positions that the new agency should have.

Lynn De Coite (D, Lanai-Molokai-Paia-Hana), chair of the Senate Committee on Energy, Economic Development and Tourism, who will head a group of SB 1522 conferees, said in an email, “Over the past few days, I have heard from many community members and industry stakeholders with varying viewpoints on HTA. I appreciate everyone reaching out to share their concerns. In the Legislature, just like in the community, there are also varying viewpoints. This coming week I’m committed to working with my colleagues on a path forward.”

HB 1375, introduced by Rep. Sean Quinlan (D, Waialua-­Kahuku-Waiahole) and other House members, did not have any appointed conferees Sunday. That bill in its current form provides a $60 million appropriation to establish an Office of Tourism and Destination Management within DBEDT. It adds destination management jobs. The new agency would be governed by a nine-member board and an executive director. It also provides a $64 million appropriation to the Hawai‘i Convention Center to fund repairs for its rooftop, which was leaking so bad after rain Wednesday that HTA had to change its meeting room.

Quinlan told the Star- Advertiser on Sunday, “It’s gratifying to see so many folks from the tourism industry come out in support of HTA, but there are also a number of folks from the communities that have come out in opposition to HTA.”

Quinlan said lawmakers are deep in negotiations, and declined to discuss specific details. However, he said, “I do believe that we can get (to the middle ground) by making changes to HTA without repealing it. But I also believe that if it’s the will of the Legislature to create a new agency, I think the new agency can do it, too.”

Opinions run the gamut. Fred Atkins, general partner of Kilohana Kauai and a former HTA board member, said he’s been among those meeting with politicians, community members and industry leaders to stand up for HTA, which he believes has pivoted to a regenerative tourism focus.

“I’m encouraged by the amount of positive letters in support of HTA that show that the community does see the progress that HTA has made since it came out with the 2o2o five-year plan, followed by island-specific Destination Management Action Plans,” Atkins said.

Hawaii Lodging and Tourism Association President and CEO Mufi Hannemann said HLTA supports HTA but has taken the pragmatic view to support the bills to repeal HTA if that’s the only alternative to tourism ending up without adequate funding.

“Unfortunately, if that’s what we have to do to salvage the money, that’s what we have to be supportive of. But our preference is to keep HTA as is,” Hannemann said.

Malia Hill, Grassroot Institute of Hawaii policy director, said in an email, “This year, the Legislature has toyed with replacing the HTA with a very similar ‘Destination Management’ office. Both bills on this issue are premature, as both try to force a solution on an ongoing and unsettled debate about the future of tourism in our state.”

Hill added, “Ideally, government will get out of the tourism business altogether and state funds would no longer be used to promote visitor arrivals, which as we all know have become a sore point in Hawaii anyway. In the meantime, however, we hope that legislators will look at these bills and realize that they create more questions than answers.”