The Hawaii Tourism Authority, the agency tasked with marketing Hawaii to the nation and the world, says it needs more money to cover its expenses.
The HTA is asking state lawmakers to allow it to increase its administrative spending by as much as 30 percent a year.
HTA manages $82 million in hotel room tax revenues that are deposited into the Tourism Special Fund each year. However, state law allows HTA to spend no more than 5 percent of that tourism special fund revenue on its own administrative costs, which works out to about $4.1 million a year.
According to testimony submitted to lawmakers by HTA interim President and Chief Executive Officer Ronald Williams, the HTA expects its administrative costs will hit that $4.1 million cap next year, and Williams is asking state lawmakers to lift the cap on administrative expenses to 6.5 percent of the Tourism Special Fund.
House Bill 1259 would allow the HTA to spend up to $5.33 million per year on administrative costs starting next year, although the agency issued a statement this week clarifying that it does not plan to spend all of that money immediately.
The increase in administrative costs to 6.5 percent of the Tourism Special Fund "is not something that we would do next year," Williams said. "It’s really just preparing us for the future."
"At some point if inflation catches us, what I don’t want is to be in a position where we can’t move because we weren’t able to do this," he said of the increase.
Williams also told lawmakers in his written testimony that the state transferred tourism research and statistics functions from the Department of Business, Economic Development & Tourism to HTA in 2009, a change that increased the HTA staff by 20 percent. However, the state never increased administrative funding for the agency, Williams said.
He said the HTA administrative staff has 32 positions, but seven are empty including the CEO spot vacated by Mike McCartney last year. McCartney left HTA to become Gov. David Ige’s chief of staff. A search for a new CEO is underway.
The proposed increase in the HTA administrative budget was unanimously approved by the state House earlier this month, and was approved by the Senate Tourism and International Affairs Committee last week.
The HTA was created in 1998 to promote tourism in Hawaii, and is responsible for tourism market and product development, marketing and tourism research.
The agency reported it spent $49.93 million on "destination brand management" in fiscal year 2013, and spent an additional $12.25 million on "brand experience development."
HTA spent another $1.45 million on tourism research and another $575,000 on "communications, government relations and outreach."
In addition to those costs, the agency spent about $2.83 million on administrative services in 2013, according to a summary of expenses in HTA’s 2013 annual report.
