Teri Orton has been general manager of the Hawai‘i Convention Center technically for a month now, though actually she started on the job about two weeks before.
That was so the company she is with, Los Angeles-based AEG Facilities, could get oriented about running the center from its previous manager, SMG Hawaii, whose contract expired Dec. 31.
SMG had been the center’s manager since it opened in 1998, amid great expectations that by 2008 the $350 million project would draw annually 430,000 new visitors and up to $1.9 billion in visitor spending, and employ up to 350 people full time.
That, of course, didn’t work out, and the center, which is governed by the Hawaii Tourism Authority, still is a drain on the state budget, depending on how one wishes to look at what the center actually does.
SMG during its tenure met its annual goal of drawing 700,000 hotel room nights only once, in 2005, while last year it booked only 356,515 room nights. Moreover, the center is generating less than half of that rosy $1.9 billion in visitor spending that boosters had predicted way back when, and its employment is barely a quarter of what had been predicted.
But those are all things that Orton and her AEG colleagues hope to improve upon.
As part of its $17.9 millionfee for2014, the company will be managing the property and scouring the nation and foreign countries as well to drum up more business for the 1.1 million-square-foot facility, with 350,000 square feet of rentable space and 51 meeting rooms, just outside of Waikiki at the intersection of Kalakaua Avenue and Kapiolani Boulevard. AEG is pursuing that goal in conjunction with the Meet Hawaii sales team, which is a joint effort between the Hawai‘i Convention Center and the Hawaii Visitors and Convention Bureau.
Orton joined AEG after fiveyears at Outrigger Enterprises Group, most recently as vice president of condominium resort marketing. She also has management and sales and marketing experience with other hotel companies, including Embassy Suites, The Ilikai, W Diamond Head, the Sheraton Princess Kaiulani and the Huntington Beach Hilton Resort in California.
Orton, 45, graduated from Kahuku High School, then majored in communications at Windward Community College.
She is single, but laughed at the suggestion she is "footloose and fancy free." She is, after all, pretty busy with her new job.
QUESTION: Before this new job, you were vice president of condominium resort marketing for Outrigger Enterprises. Did that experience prime you well for this new position?
ANSWER: My background primarily is operations and sales and marketing. So I think having the best of both worlds will be very helpful in this position because, of course, besides managing the facility — going out to get new business to come to the islands.
Q: When you’re not walking around the property managing, so to speak, how are you going to try to enlist large groups to hold their conventions at the center? Do you go down a list and start making phone calls?
A: (Laughs) Good question.
One of the primary reasons AEG was selected is because they do have a wealth of resources. … They have over 400 corporate sponsors. For example, Herbalife is one of them. Coca-Cola is another one of them. These are major sponsors that actually pay money to advertise at all of AEG’s venues. This is a resource for me to go and tap into and say, "Hey, Coca-Cola, are you planning on having any annual corporate functions, and if so, where are you planning on having them? Is there any opportunity for having you consider having them here in Hawaii?"
Q: What about local convention groups?
A: One in particular would be the Lions Club. We actually went to visit the Lions Club here locally and they called their corporate Lions Club, and they’re actually having their convention here in 2015. So, yes, there are some local connections here.
Most of our citywide conventions come out of the Midwest. Not all of them, but that’s kind of a big base for companies that do consider Hawaii for a location. And, you know, they usually rotate their venues, so they won’t have their annual corporate meeting here every year. It’s usually maybe every three or four years.
Q: Are you going to be doing a lot of traveling for this job?
A: I will be doing some travel, not a lot. Most of the travel is done by our sales team, but I will be going to some of the major trade shows that have a lot of potential to bring business to Hawaii, just to make a presence …
Q: What are the goals of AEG regarding management of the center? I suppose you were selected to replace SMG for some reason.
A: I think it was just the resources that AEG brings to the facility on a corporate level, as far as support. They manage facilities and sports arenas worldwide. They also have international and global contacts that we can tap into. For instance, they have a facility in Australia, they have a facility in Kuala Lumpur. Companies have gone and had their conventions at their facilities, at their convention centers. So we share lead lists with them. I just got a list from actually both of those locations of companies that went there last year. Obviously they’re going to rotate their venues, and I would probably call on them and say, "Hey, would you consider coming to Hawaii on your next rotation?"
Q: Surely you know the history of the center, which is that it has totally failed to live up to expectations, as they were advertised originally when they proposed to build it. Is it any better than half of what they projected back in 1996?
A: I think it’s getting better. Like anything else in the industry we’ve gone through peaks and valleys. The economy worldwide and globally, companies weren’t funding corporate trips to anywhere. They kind of put the brakes on that. But I think the economy is coming back now. Companies are starting to travel again and consider destinations that are overseas for their corporate events. I think the timing’s right. It’s a great time for a management change, to bring a fresh set of eyes and new resources to the center, to try to stimulate new business.
Q: The place isn’t even breaking even, right? It’s still losing money every year, right?
A: Well, honestly, the convention center is a for-profit organization, but our primary reason for existence is to pump business to the state. Our primary goal is to ensure that we bring in large groups and conventions, that we’re feeding business to all of the hotels in Waikiki, and the restaurants and the retail shops, and that these delegates then are extending on beyond that and going to the neighbor islands, since they’ve flown all this way. So we’re not just feeding the island of Oahu. We’re feeding the entire state when we bring in these big groups. That’s our primary focus.
Q: How will you be attempting to overcome that notion that having business meetings in Hawaii is not appropriate?
A: Well, you know, I think it depends on what market you’re going after. There still is that boondoggle effect out there. But I certainly would not want to downplay everything that we’ve built our destination up to be, which is that it’s paradise. We’re not going to shy away from that, but focus more on the fact that business can be done here in this very relaxing lifestyle venue … that "It’s paradise, and you can do business here."
Q: I suppose avoiding the appearance of impropriety is more of a problem for government types, right?
A: You know, like I said, it depends on what market you’re looking at or going after, and I think there are some companies that would view this as, "OK, we can get business done, and we can also reward our employees by getting them to extend in paradise." I think it’s all in the way you spin it.
Q: Do you think there are some drawbacks once those delegates get here, such as that the center is not right in the middle of Waikiki?
A: I don’t think the location is a drawback. I think it’s kind of nice that we’re outside of Waikiki and we’re not in that hustle and bustle. They can come to their meetings, they can get work done, and then they can go back to … you know, the heartbeat …
Q: Back to their hotels.
A: Yeah. I think if they were too close, it would maybe be too easy to miss a meeting and stay in their hotels. (Laughs)
Q: What about the homeless who always seem to be nearby? Has that been dealt with already?
A: We do still have some challenges with the homeless on the Ala Wai-facing side of the center. But it’s not really as bad. There’s actually a lot more people running up and down the Ala Wai now, using that footpath, than there has been in the past.
Q: In a news article that announced your appointment to this job, it hinted that the center could be redeveloped at some point to include hotel rooms or other features that could bring in more money. Is that true?
A: There has been talk. I don’t think there’s much detail into that discussion. I think AEG has developed areas such as L.A. Live, where it was kind of a skid row, basically, and they redeveloped that whole area to become an entertainment district.
Q: What about music concerts or other uses for the convention center?
A: Yes, we’re definitely looking into all possibilities. If we do decide to look at other uses for the facility, we may need to reconfigure; I’m not sure. That isn’t off the table, but it’s very shallow discussions right now.
Q: What about gambling? A lot of people are saying the center would be an ideal place for that.
A: Everyone has their discussions about what this building should become, and a casino is one of them. (Laughs)
Q: What is the hotel industry, in particular, doing to help support the efforts of the convention center? I’m worried that perhaps some of them consider you as competition, by taking business away from their ballroom and meetings facilities.
A: Well, our sales team has combined efforts with the Hawaii Visitors Convention Bureau, so we not only sell convention center business, we also sell what we call single-property business. So if one of our sales team members are out and they meet up with a company that wants to have something here in Hawaii, and maybe it’s too small for the convention center, or they prefer to have it at the property at which they’re staying, we actually will take that lead, take the information and send it on to the hotel to follow up on. So it’s a combined effort. I mean, our whole purpose is to pump business to all the hotels.
Q: Is there some kind of commitment by AEG that you do expect eventually to have the center at least break even?
A: Oh, of course, it’s always a general manager’s goal to break even or be profitable. It will be a slow process of not just looking at expenses and what’s spent here, because that’s always scrutinized, but the bigger picture is that bringing more business in certainly helps solve the problem. That’s an obvious solution, going out and getting more business.
Q: And you guys are real confident about that.
A: I am. (Laughs) That’s why they put me here. I’m confident with the support of our management company and all of the corporate resources that they have, we definitely can make some improvements here. And it’s not that SMG did anything wrong. They were great. The facility’s beautiful and very well maintained.
Q: Will you be trying to trim expenses in any way? Is there anything you can do on that side of the ledger?
A: SMG did a good job. This is a very lean operation. They’ve run the facility very efficiently. I think the easier thing to do is just go out and get more business.
