Hawaii Tourism Authority awards over $67M to 3 contractors

The Hawaii Tourism Authority made three multiyear procurement awards Monday valued at more than $67.8 million collectively to manage the brands and market Hawaii to the United States and Canada, and to offer support services for destination stewardship.

HTA extended another award to the Hawaii Visitors and Convention Bureau, the only contractor ever to handle its largest U.S. market, where last year visitors spent $16.2 billion in Hawaii, an average of $231 per visitor per day. HVCB’s new contract, slated to begin June 22, is worth nearly $38.4 million for the initial 2-1/2-year term with an option for one two-year extension.

HTA also retained VoX International, which already had been working as Hawai‘i Tourism Canada. The new contract, beginning June 22, is worth $2.4 million for the first 2-1/2 years, with an option for a two-year extension. Canada is one of Hawaii’s most mature international markets. Last year visitors from Canada to Hawaii spent $928.2 million, an average of $188 per visitor per day.

HTA selected the Council for Native Hawaiian Advancement for its first stewardship services award, which HTA said will include post- arrival visitor education; administrative support for HTA community programs, technical assistance and capacity building for community organizations and businesses, and technology-enabled solutions to manage tourism hot spots. CNHA’s contract, worth more than $27.1 million for an initial 2-1/2-year term with an option for two one-year extensions, is slated to start June 20.

The state procurement process allows for a period of protest that expires June 14. If contracts are finalized without additional fanfare, it likely would create a pathway toward ending the controversy that began in 2021 when difficulties with the procurement for the U.S. tourism contract pitted HVCB and CNHA against each other, creating discord that carried over into the community and the highest levels of government and threatened HTA’s future.

HTA’s prior solicitation attempts for the U.S. tourism contract drew strong criticism from the state Legislature, where House Bill 1375, which sought to repeal or reform the agency, lived until House and Senate conferees failed on the last day to reach consensus.

HTA originally selected HVCB for a multimillion-­dollar U.S. tourism award on Dec. 2, 2021. Former Department of Business Economic Development and Tourism Director Mike McCartney, acting as HTA’s head of purchasing agency, rescinded the contract award in 2021 following an unresolved protest from CNHA.

When HTA embarked in 2022 on a second round in the request-for-­proposals process, HVCB lost to CNHA and filed its own protest. McCartney attempted to broker a deal between HVCB and CNHA, but that option was not approved by officials from the state Procurement Office or the Department of the Attorney General. Ultimately, McCartney rescinded CNHA’s award on his last day on the job, Dec. 5, citing the “best interest of the state” — the same reason he gave for HVCB’s earlier rescission.

HTA also faced strong criticism from some lawmakers and community members, who wanted a quicker pivot to destination management. To some extent, the HTA board of directors’ Dec. 22 decision to broaden procurement was an outgrowth of this pushback. The board voted to seek a contractor for the U.S. market, while also approving a request for proposals to seek support services for destination stewardship across all markets.

HVCB President and CEO John Monahan issued a statement Monday thanking HVCB’s membership for its “professionalism, hard work and unwavering support through three procurements.”

“As your neighbors, friends, and ohana, we look forward to continuing the development of HTA’s regenerative tourism model that is consistent with our community’s desires, economic goals, cultural values, preservation of natural resources, and the visitor industry needs,” Monahan said.

CNHA CEO Kuhio Lewis said in a statement, “Today marks the start of a new beginning. While it has been a long journey, we are ready to hit the ground running and focus on the future of Hawaii, and its people.”

Lewis said Tyler Iokepa Gomes was recently appointed as chief administrator of Kilohana, CNHA’s tourism division.

“Kilohana, CNHA’s tourism division, looks forward to working with HTA, industry officials and the community to place Hawaii’s people, culture and aina at the center of how the state stewards these islands as a visitor destination,” he said.

HTA said contractors are expected to advance a regenerative model of tourism, and resident sentiment will be a key performance indicator in evaluating contract performance.

Keith Vieira, principal of KV &Associates, Hospitality Consulting, said marketing, especially to higher-spending visitors, should have been prioritized higher in the contract allotments.

“Native Hawaiian groups deserve a seat at the table. But this is about driving visitor spending to drive taxes and employment and I don’t see how putting almost half of the money into the destination of Hawaii within Hawaii is a logical split.”

HTA said contract terms are subject to final nego­tiations and availability of funds. The deferral of HB 1375 left HTA without dedicated funding; however, HTA may petition up to $60 million from a $200 million appropriation to the state Budget and Finance Department, where securing the funding will be subject to a five-point system of checks and balances.

HTA President and CEO John De Fries said in a statement, “HTA would like to thank all offerors for submitting their proposals, and to the respective evaluation committees whose members brought a high level of professionalism and expertise to this review process. Additionally, my gratitude is extended to our HTA staff for their dedication and commitment in advancing the best interests of the Hawaii visitor industry and the well being of our local communities statewide.”