The Hawai‘i Tourism Authority board and the Department of Business, Economic Development and Tourism are at odds over budget and hiring — two categories that are the first litmus test of what it means for the tourism agency to be fully attached to DBEDT.

DBEDT Director James Kunane Tokioka, who is a voting member of the HTA board, has recommended a $70 million budget rather than the $80 million budget the board voted for, and now is holding up the board’s decision to hire a new president and CEO over salary considerations raised by Gov. Josh Green.

Before hiring Bishop &Co. to conduct an executive search, the HTA board approved raising the salary for the agency’s top executive to $300,000, a $50,000 hike, which was approved in the budget worksheets for House Bill 1800, the finance bill state legislators passed in May and Green later signed into law.

The employment firm posted a job description in the fall and more than 400 applicants applied for job, but the search is now on hold because Tokioka said Green told him he will not approve a hire that makes more than $188,800, which aligns with the salary parameters for lieutenant governor. The limit also would force the HTA board to reevaluate the range of other staff salaries, including the chief brand officer position, which was budgeted for $225,000.

“The adjustment in salary reflects the changing role of the HTA, where a smaller, more efficient team is supported by expert board members and contractors,” the Governor’s Office said in an email to the Honolulu Star-Advertiser. “The decision is also consistent with the Governor’s commitment to ensuring that state salaries are appropriately aligned with the needs and operations of each agency. It’s important to note that while the Governor and Lieutenant Governor of Hawai‘i earn annual salaries of $189,480 and $188,800, respectively, other specialized state positions — such as the Chief Information Officer and Superintendent of Education — receive higher compensation due to the complexity and expertise required for those roles.”

The Governor’s Office said the decision to reduce the salary for HTA’s president and CEO “reflects the agency’s streamlined operations and redefined responsibilities. Over the years, HTA has downsized its staff, enhancing efficiency by delegating substantial work to three primary contractors. This operational shift allows the HTA President and CEO to concentrate on contract management and organizational oversight, while relying on the expertise of experienced board members for strategic guidance.”

Waning autonomy

Tokioka, who reports directly to the governor, has been more involved in the inner workings of HTA since July 1, when Senate Bill 3364 went into effect, repealing HTA’s exemption from the administrative supervision of boards and commissions.

Tokioka said the removal of the exemption, which was instituted by legislators who had lost confidence in HTA, makes it “an attached agency that needs approval for expenditures, the budget and (spending categories).”

“I am going to work with the board and the executives to try to accommodate as much as I can, but within the guidelines of the directives that I am given,” Tokioka said. “It’s not me just doing this Wild, Wild West on my own. It’s following along with what the administration has laid out for me.”

The change has made HTA less autonomous and is anticlimactic given the agency’s emergence from last year’s legislative session with a recurring lump-sum budget of $63 million — no small feat for an agency that between 2018 and 2023 endured cutbacks, organizational changes, the threat of defunding and possible repeal.

The exemption from the administrative supervision of boards and commissions was the last one HTA had from when it was founded in 1998. The Legislature took away its procurement exemption in 2021, and in 2022 the agency lost its special fund status.

The loss of exemptions and other cutbacks by the Legislature followed a crisis of confidence that threatened HTA’s very existence and motivated Green to declare publicly in 2023 that change was needed at the top level. The governor named Tokioka as a voting member of the HTA board in July 2023 and also added Blaine Miyasato and current board Chairperson Mufi Hannemann.

‘Courage to change’

The current situation is a departure from the Legislature’s actions more than a quarter of a century ago to follow the recommendation of an Economic Revitalization Task Force during Gov. Ben Cayetano’s administration to create a tourism authority separate from DBEDT with substantial autonomy to bring tourism to the forefront.

Keith Vieira, principal of KV &Associates, Hospitality Consulting, who served on the first HTA board, said the tourism agency was designed to have autonomy so it could avoid political whims, and it was recognized from the start that premium pay was needed to recruit highly qualified applicants.

Indeed, a state audit of HTA in February 2018 noted that one of the freedoms the agency had been given by the Legislature because of the critical importance of tourism was the ability to “provide its chief executive officer with a compensation package of more than $440,000, which is more than 2-1/2 times the governor’s salary.”

Vieira said the HTA president and CEO job “is one of the most important jobs in the state as it drives our tax base and employment base and provides a future for local kids that want to stay in Hawaii and find their career here.”

“Since this sets the salary back by more than a decade, it’s hard to imagine that the best person will come forward,” he added. “If the salary isn’t enough to drive a highly qualified leader to apply, we will be left with either retirees or people who haven’t led at the higher levels.”

Miyasato said he is painfully aware of how much salary and leadership matter, as he recently moved to Las Vegas because he could not find a comparable job after his longtime executive career at Hawaiian Airlines came to an end following its merger with Alaska Airlines.

Miyasato resigned from the HTA board Dec. 19 due to the move, but during his tenure on the panel pushed to fill the agency’s president and CEO job and to launch a competitive search, especially during the six months he spent as board chairperson.

“To me it is ‘Organization 101’: You need the head to move the fingers and the toes,” he said. “I hope it’s not going to be a cascading effect of ‘you get what you pay for.’ I can back that the industry salaries are much higher in Las Vegas.”

Miyasato said the current situation highlights the need to clarify responsibilities for HTA and DBEDT and find a way to navigate the new checks and balances.

“If leaders are to not only help their organizations become more agile and resilient, but attract and retain the people they need to succeed and grow, then they need to have the courage to change,” he said. “Not just when external forces presses it upon them, but in terms of how to help bring out the best in those they lead.”

Stability lacking

Years of uncertainty have wreaked havoc on HTA’s staffing, which is short 30% of its authorized positions. Only 21 of the 30 positions authorized by the state Legislature are filled and the agency has been without a permanent top leader since September 2023 when former HTA President and CEO John DeFries opted not to pursue renewing his contract.

A majority of the HTA board views finding a permanent top leader as the next major step in shoring up the agency, especially its personnel. In addition to the top position, it also needs to fill the key chief brand officer vacancy and five other positions: sports brand manger, brand manager, planner, destination manager for Hawaii island, and a finance account clerk.

HTA board member Roy Pfund, who is president and CEO of Roberts Hawaii Inc., said the board must work with the Legislature and the Green administration to make a case for consistent budgetary funding and the kind of investment in HTA salaries needed to attract the best and the brightest.

“Consistency is important. Who wants to come into an organization that you don’t know if you are funded year in and year out? You are not going to be able to attract and retain the best people who are supporting Hawaii’s biggest industry,” Pfund said.

Daniel Naho‘opi‘i, who was hired as HTA’s chief administrative officer in January 2023, is also serving as interim HTA president and CEO and chief brand officer while receiving the salary for the lowest paid of the positions. Naho‘opi‘i is the 12th person, including other interim leaders, to serve as HTA’s top leader since the agency’s start.

University of Hawaii at Manoa political scientist Colin Moore said the abrupt salary change and delay in hiring a top leader “hurts the stability of HTA — an agency that has already been unstable for years.”

Moore added that it is not unusual in Hawaii and elsewhere for highly qualified state hires to make more than a governor or lieutenant governor.

The HTA board may go to the state Legislature to advocate for the higher budget, something Tokioka agrees is within their prerogative. However, it’s unclear if a similar appeal to lawmakers on the salary limit will gain traction, as actual hiring has always been an executive branch function and the HTA board cannot fill the job unless Green signs off.

Tokioka noted that an HTA board with different members approved the $300,000 salary for the president and CEO job, and the current board has not taken a vote on the $188,800 limit and the administration’s intention to make the position a state job that is eligible for pension, vacation and medical benefits.

“The board can take a vote, but the governor made it clear, and I supported him,” he said. “I think we can get good candidates. I think somebody who has been in the industry and wants to make a difference in Hawaii, we can find that person.”

The next steps in HTA’s recruitment for its top job remain undetermined; Tokioka said the salary change will require that the job be reposted. To add to the confusion, a banner on the job announcement on the Bishop &Co. site erroneously said last week that the job had been filled.