Arnie Weissmann
The Hawaii Tourism Authority (HTA) is unlike any other state destination management organization. It is charged by the state legislature to not only manage tourism and conventions but also to safeguard Hawaiian culture, monitor airlift, provide crisis relief for visitors and residents, create a digital reservation system for parks and natural areas across the state and grow employment (the last two were added during this year's legislative session).
In a state where 40% of the economy is powered by tourism, the legislature takes more than a passing interest in the funding and performance of the organization. Simultaneous to piling responsibilities on the HTA, it has been playing politics with its financing, having recently withheld its allocations for three years.
The HTA's current $63 million budget is less than when it was founded in 1998; it had once been touted as a model, well-funded state destination marketing organization (its budget was typically the largest or second largest) but has recently lost ground to California, Florida and Puerto Rico.
Making its job harder still, the legislature, in the name of exercising oversight responsibility, hamstrung HTA leadership by removing statutory provisions that allowed the organization to make independent decisions.
The HTA board was permitted to undertake an exhaustive independent study of its structure and governance, and Better Destinations, a Denver-based tourism consultancy founded by Cathy Ritter, who had headed state tourism boards in Illinois and Colorado, was chosen in December to do the work.
The report itself runs around 150 pages, but a 36-page situational analysis titled "Governance With Aloha: A Case for Reinventing Hawaii Tourism Oversight" summarizes the conclusions drawn from interviews with more than 60 tourism stakeholders, 11 workshops, 619 responses from individuals with an interest in tourism and 11 U.S. and global case studies. (Travel Weekly permitted Better Destinations to observe a roundtable that we held with travel advisors and suppliers following our Hawaii Leadership Forum in April.)
The key recommendations are both radical and reasonable: The organization should be predictably funded and be permitted independence. It should be converted into a nonprofit, a more typical structure for a DMO. Following the loss of credibility that the HTA has suffered over the years, the report advises that the organization focus on improving transparency, building trust, fostering collaboration, empowering stewardship and recognizing the specific challenges of each island.
The recommendation that I feel will go a very long way to restoring confidence in the HTA is also the most politically charged and would require the legislature to cede one of its most lucrative and veiled sources of power: The report calls for more transparency in how revenue generated by the state's Transient Accommodations Tax (TAT) is spent. The tax pulled in $1.1 billion in 2023, with $846.3 million put into state general fund coffers and $275.2 million disappearing into county general funds.
For the governance study recommendations to move forward, it would require the support of state legislators, who may be resistant to giving up even partial control of the more than $1 billion in annual TAT funds. Yet, owing to the opacity of those expenditures, there is less understanding among residents of how tourism directly benefits them.
In my opinion, it's critical to forge a stronger connection between tourism revenue and resident benefits. It may well be that the general funds are spent on improving the lives of citizens, but because of the general nature of the allocations, improvements funded by tourism dollars may not be recognized as such.
The study recognizes that Hawaiians' resentment of some tourism activity, and by extension of the HTA itself, is not based solely on a lack of understanding of tourism's positive financial impact. As the extended drama in the awarding of funds to promote tourism to both the incumbent Hawaii Visitors & Convention Bureau and the Council for Native Hawaiian Advancement demonstrated, many Native Hawaiians value educating visitors and having them understand and respect the Islands' unique culture as much as, or more, than resulting economic benefits.
To accomplish all that's being proposed, the study notes that the HTA needs to nurture (and in some instances, build or restore) relationships with other state agencies as well as establish a permanent collaborative structure in the form of stewardship councils that include members from the public, private and nonprofit sectors.
Stewardship is a cornerstone of the recommendations, going so far as to say the HTA should change its model from a DMO to a DSO (Destination Stewardship Organization) and change its name to reflect its new direction. The study calls for creating a Hawaii Destination Stewardship Council to provide strategic oversight and encourage collaboration between the state and individual islands.
Tourism is down in Hawaii in 2024, and its general operating environment is not favorable. It is still recovering from the fires in Lahaina, which have had an impact not only on Maui but on the state as a whole. Additionally, the strength of the U.S. dollar is making an Islands vacation more expensive for international visitors.
I commend the HTA and the state for having the courage to give the report's writers independence to draw their own conclusions. The result is a report that basically calls for a complete overhaul of the governance and operations of the very organization that commissioned the study. Although many of the proposed changes have been floated before in one form or another, the atmosphere in Hawaii is so politically charged that it was necessary to bring in a neutral party.
The ball is in the governor's, HTA's and the legislature's court. The governor has weighed in, telling the Honolulu Star-Advertiser that the report "sets the stage by amending the way we do HTA's work."
The Star-Advertiser endorsed most recommendations, with the notable exception of the HTA going nonprofit.
State Sen. Glenn Wakai, vice chair of the Senate Committee on Energy, Economic Development and Tourism, was quoted by the Star-Advertiser as saying, "I think what is suggested [in the report] provides some level of continuity and proper governance that we don't have now."
But while state Rep. Sean Quinlan, chair of the House Tourism Committee, said he was "very glad" the study was done and that "it identifies a lot of problems that we have," he also said, "In a lot of ways, the plan ... is not consistent with the political realities of today. ... I just don't see us being able to move in that direction in the near future."
If there's a disconnect between the "political realities of today" and the aligned will of both the residents and tourism stakeholders, I think it may be incumbent upon those who create political realities to listen a little more carefully.