Tourism board
lays groundwork
Duty Free's Reed is elected
By Russ Lynch
chairman as the authority
gets down to business
Star-BulletinThe new Hawaii Tourism Authority got down to work yesterday, scheduling as many weekly meetings as is needed to get started on charting the future of the state's No. 1 industry.
Several members said their employers have told them to take all the time they need away from the office to do the important work that revolves around the biggest budget Hawaii tourism promotion has ever had.
John Reed, chairman of Pacific retail development for DFS Hawaii Inc., the state's duty-free sales concession, was elected the authority's chairman by a vote of 7-to-4 at the group's first meeting yesterday. The panel has 11 voting members and two nonvoting members. The other two chairman nominees were Shari Chang of Castle Hotels and Resorts and David Carey of Outrigger Enterprises Inc.
Reed played a key role in creating the authority, as a leading member of the governor's Economic Revitalization Task Force.
After yesterday's two-hour first meeting of the authority in the lieutenant governor's conference room at the state Capitol, Reed said the board's main challenge is to get a quick grip on all the available data about what really makes up Hawaii tourism.
"We have to get our hands around all the data," he said.
Reed said he sees no conflict in the fact that DFS is behind in its airport concession fee payments to the state. The company and the state have agreed on a new schedule of payments, he said.
Reed, who came to Hawaii in 1988 as the top executive of DFS, no longer runs the day-to-day business of the company, since Edward J. Brennan took over as president in August 1997.
The unpaid board elected Diane Quitiquit, director of research and development for Hawaii county, as vice chairwoman and picked her and three other members to form a subcommittee to hire an executive director.
The other subcommittee members are Keith Vieira, vice president and director of Hawaii operations for Starwood Hotels & Resorts Worldwide Inc.; Chang, who is senior vice president for sales and marketing at Castle Hotels, part of Castle Group Inc.; and Roy Tokujo, president and chief executive officer of Cove Marketing Inc. who recently resigned as chairman of the Hawaii Visitors & Convention Bureau to take the authority position.
Vieira, who will lead the selection group, said he expects that an executive director will be appointed before the state Legislature convenes in January. The group agreed to meet weekly until it gets the authority up and running.
One of the joys of the new tourism promotion structure, several members said, is that the board does not answer directly to the Legislature and does not have to go there for its funding.
After selecting an executive director, the board's next priorities include selecting a business or businesses to conduct the marketing of Hawaii tourism, a job held for decades by the HVCB.
The HVCB has said it is the best qualified to do that work but the authority will make its own choice and has the right to parcel the work out to several contractors.
While that is a significant demand on the authority, it is not an immediate one because the legislation that set up the Hawaii Tourism Authority specified that the HVCB continue in that role at least through June 1999. The board yesterday authorized Reed to negotiate and sign a new contract with the HVCB that will carry it through that period.
Before yesterday's meeting, Gov. Ben Cayetano signed a contract with the HVCB that covers the first half of the state's current fiscal year, July through December 1998.
Budget estimates presented at yesterday's meeting showed the HVCB will get $13 million for the current six months and $22.4 million for the six months of January through June. The second part of the money comes directly from the hotel room tax, which rises to 7.25 percent Jan. 1, from 6 percent.
The authority is allowed to spend up to 3 percent of its room-tax income on administration costs and that is estimated at $730,000 for the second half of the current fiscal year. Another $500,000 will pay for research, which will shift from the HVCB to the Department of Business, Economic Development & Tourism on Jan. 1.
The Hawaii Tourism Office, still part of DBEDT, has essentially been shifted over to be the staff arm of the tourism authority and that will cost the authority $644,000 for the current six months and $750,000 for the next six months.
The bottom line is that the authority is expected to spend $13.8 million this year and $24.3 million in the first half of next year, much more than the HVCB's budget of about $25 million a year. The Hawaii Tourism Authority budget is expected to rise to $59.5 million in fiscal 2000 and $60.8 million in fiscal 2001.
Board member Carey, who is president of hotel operator Outrigger Enterprises Inc., urged the board to work hard to stay on track and not wander from its primary task, creating and directing Hawaii's tourism policy. "It's going to be a real challenge to this group to manage this process," Carey said, shortly before the meeting ended. "We need to maintain as much of a strategic focus as we can."
