Hawaiʻi Tourism Authority navigating its future following deferral of HB1375

Fears faced by the Hawaiʻi Tourism Authority were tempered on Friday when House Bill 1375 was deferred in conference committee. The measure would have transferred functions, duties, appropriations, and positions of the Hawaiʻi Tourism Authority to the Office of Tourism and Destination Management. But the HTA does not emerge on solid ground, since funding for marketing was not included in the state budget.

“With the omission of the Hawai‘i Tourism Authority from the state budget bill and today’s deferral of HB1375, our work in holistic, integrated destination management, visitor education, and brand marketing is in jeopardy,” Hawai‘i Tourism Authority President and CEO John De Fries wrote in an email message from the agency on Friday.

“We appreciate the Legislature’s appropriation to repair the Hawaiʻi Convention Center roof, and with adjustments to current contracts, we will have funds to keep the lights on and retain our staff of 22,” he wrote. But he said, “Our leadership team and board of directors will be making tough decisions in the coming days about cancelling active procurements, existing contracts, and ongoing community work.”

According to language in the bill, confidence in the agency has been eroding for at least two years: “Due to mismanagement by the Hawaiʻi Tourism Authority, the award of a $34,000,000 contract for the marketing of Hawaiʻi as a tourism destination to the United States major market area has been in a state of uncertainty since 2021.  This situation has been widely publicized and has demonstrated the Hawaiʻi Tourism Authority’s noncompliance with the Hawaiʻi public procurement code.”

Senator Lynn DeCoite who chairs the Senate Committee on Energy, Economic Development and Tourism, issued a statement saying, “Unfortunately, we could not reach a consensus on HB1375. During negotiations, the Senate proposed that the Hawaiʻi Tourism Authority continue to exist with a reduced governing board consisting of only nine members and a primary focus on marketing and promoting tourism.”

As part of the committee proposal, lawmakers had recommended establishing the Office of Destination Management under the Department of Business, Economic Development, and Tourism.

By folding in HTA responsibilities within the State Department of Business, Economic Development & Tourism, HTA leadership expressed concern that the measure and its companion bill would “create all sorts of challenges as to if and how this new agency will support community programs and provide effective destination management of tourism – all of which HTA is already providing.”

Sen. DeCoite who represents District 7, which includes Hāna, East and Upcountry Maui, Molokaʻi, Lānaʻi and Kahoʻolawe in Maui County said, “The primary objective of this new agency would be to engage and involve local communities in destination management planning, which would provide valuable insight and feedback to help guide the state’s overall tourism strategy.”

She said despite the impasse with the House on creating a proposed Office of Destination Management, she expressed confidence that HTA can continue to operate with roughly $30 million of unspent American Rescue Plan Act funds.

De Fries said he hopes that the HTA will be able to earn the confidence of lawmakers in its work ahead.

Sen. DeCoite said she is eager to have further discussion with the HTA and legislative colleagues in the next legislative session.