Directors of the Hawaii Tourism Authority are moving ahead with major industry marketing and management contracts after months of uncertainty at the Legislature over the agency’s funding and future existence.
The agency’s board decided at a special Tuesday meeting to select awardees May 22 for three previously held-up contract solicitations worth up to $88.2 million over 2-1/2 years.
HTA, until Thursday when this year’s legislative session ended, had been in funding limbo and only several days before that had dodged the prospect of being dissolved by the Legislature.
Since Thursday, agency officials have received assurances from key lawmakers and Gov. Josh Green that enough funding should be forthcoming for HTA to pay for an initial year of the contracts that cover marketing for the mainland, marketing for Canada and improving stewardship of the destination.
“We are actually really grateful to the (Legislature),” George Kam, HTA board chair, said after the meeting in the agency’s executive boardroom at the Hawai‘i Convention Center. “We’re grateful to the governor and the administration.”
HTA lost its dedicated source of funding from the state’s Transient Accommodations Tax in 2021 under a change by lawmakers, and since then has been reliant on budget funding from the Legislature.
For the second year in a row, lawmakers threatened to provide the agency no funding and then at the last moment made unconventional arrangements aimed at providing HTA with less money than it sought.
HTA had sought $60 million in 2022 but received
$35 million in federal coronavirus aid to use in the fiscal year ending June 30. This year the agency had sought $75 million for the coming fiscal year that begins July 1.
Some lawmakers have suggested that the agency could receive $60 million
for this coming fiscal year through a combination of federal coronavirus aid and state money allocated for largely discretionary spending by Green.
HTA issued two of the three contract proposal requests in February. One, for marketing Hawaii on the mainland, the state’s largest visitor market, is worth up to $51.3 million. The other deal, to manage visitor
impacts, is worth up to
$34 million.
The third contract offer for marketing in Canada
was sought in March and
is worth up to $2.8 million.
All three contracts span 2-1/2 years through the end of 2025 and are subject to state funding.
Because of HTA’s uncertain budget picture earlier this year, there was much worry among industry businesses along with operators of community programs that benefit from HTA funding,
including festivals, natural resource projects and Hawaiian cultural programs.
At Tuesday’s meeting
Jessica Lani Rich, president and CEO of the Visitor Aloha Society of Hawaii, made an impassioned plea for HTA to undo a prior cut to an annual financial contribution helping the nonprofit, which has served 43,000 visitors over the past 25 years.
“Please save VASH,” she told the board. “We’re in a crisis now.”
VASH, which helps visitors get through often terrible circumstances that can include crime, accidents and even death, had received $370,000 from HTA in recent years until a cut to $285,000 in 2022 as HTA adjusted to its own funding cutbacks.
Rich implored HTA to restore the prior level of support to VASH, which relies on HTA for its biggest source of funding.
Kam said the reduction was an unfortunate result of the agency having more limited finances. “We have had to make tough calls throughout,” he said.
HTA’s board Tuesday deferred discussion and action on its overall budget plan for the coming fiscal year because more clarity and certainty about how much money the agency can count on receiving for the fiscal year starting July 1 is still needed.
“I think today was a
great first step,” Kam said. “There’s still a lot more work to go (and) more to come at the next board meeting in a couple of weeks.”