At last year’s General Membership Meeting, I announced that HLTA will be developing three new committees in 2017: Housekeeping, Technology, and Agriculture. I’m proud to say that we have formed advisory councils for each of these committees, and will be opening them up to the membership shortly.
At their first meeting, the Agriculture Committee selected Dean Okimoto, President of Nalo Farms, as their chairperson and discussed upcoming events and partnership opportunities. The committee’s first initiative is helping to sponsor the Maui AgFest on Saturday, April 1 at the Maui Tropical Plantation. The Maui Ag Fest will feature plenty of locally grown products from each island as it showcases agriculture’s vital role in the economy and environment.
At AgFest, HLTA will also present the first “HLTA Ho’okipa Scholarship” of $1000 to a student from Maui High School’s Academy of Hospitality & Tourism (AOHT) named Sharmaine Domingo. Sharmaine is a Senior at Maui High School and has been serving as the vice president of the AOHT, where she has been involved with many service projects and gained hospitality experience through career shadowing. As her senior project, she planned the Junior AOHT Orientation Meeting for incoming juniors and their parents. She will be attending the University of Hawaii at Manoa starting this Fall, and will be majoring in Travel Industry Management. In the future, she plans to pursue a career in event planning.
The advisory council of the Technology Council met for the first time on Wednesday, and they had a great discussion of the needs and objectives of this new committee. To start, the committee will focus on elevating the role of IT in business and the community; educate IT leaders on best practices and technology solutions, while educating hoteliers on hot topics in technology; and develop ways to recruit and retain Hawaii’s IT Talent. There is a consensus that a technology committee within the hospitality industry has been a long time coming, and we’re looking forward to the exciting initiatives this group will bring to our association.
On the government affairs front, we have been working on both the State and County levels to ensure that our industry remains proactive, while protecting our best interests.
In the Legislature, we have seen that a handful of our priority bills in support and opposition are still alive and making their way through their subject matter committees.
All our association’s priority bills were heard at the Finance Committee yesterday. They include the establishment of an airport corporation (SB658), the extension of roles and duties of the Stadium Authority (SB994), as well as a bill that would help address the issue of homelessness in our hospitality areas (SB1290). The House Finance Committee reconvened this afternoon for decision making on these measures.
On the Senate side our most contentious bill of the session was heard, HB1471, which addresses the tax collection (both GET and TAT) of transient vacation rental brokers such as Airbnb. We applaud the work that Senate Tourism Chair Wakai and the Senate committees on Economic Development, Tourism, and Technology and Public Safety, Intergovernmental, and Military Affairs have done in crafting a Draft (HB1471 HD3 SD1) that addresses many of the concerns that the hospitality industry has been voicing and the efforts also of House Tourism Chair Richard Onishi, who has been steadfast in his support to providing funding for the Counties to incentivize them to start collecting these taxes also. The bill was heard yesterday in Ways and Means and Commerce, Consumer Protection, and Health, and has been deferred to April 4th for decision making. As I have said time and time again, the key to moving this measure is to get the Governor to weigh in and disclose what he wants to see in the final product so that what happened last year does not occur again .
On the opposition front we have two measures, one in the State Legislature and one in the Honolulu City Council that are looking to raise the cost of doing business for hotels and resorts even further. In the Legislature, Bills SB863 and SB686 are moving through. These bills aim to add a surcharge to residential investment properties and transient accommodations through a constitutional amendment to fund public education. We are of course very supportive of our State’s education system, however, the proposed surcharge on our transient accommodations has the potential to harm our industry in a very large way as the surcharge asks for an additional $3 tax on all nights under $150 and $5 for all night stays over $150. Both measures have currently gone through their subject matter committees and are currently waiting be scheduled by the House Finance Committee.
At the Honolulu City Council, we are opposing Bill 31 (2017) which would raise the Real Property Tax Rate for Hotels and Resorts from $12.90 per $1,000 to $13.40 per $1,000, an increase of 50 cents. The City Council held first reading on this bill on March 22nd where the votes landed 5 ayes to 4 noes. The bill will now head to the Budget Committee where it will be heard on April 11th. We urge our members to stay vigilant in this matter and to help us in providing testimony opposing this increase (last increase was in 2014). We will be sending out additional information to help facilitate your involvement.
Starting this week, HLTA will introduce “Mufi’s Message” to keep our members updated on all things HLTA: our progress on legislative priorities, upcoming events and initiatives, and more. This week I’d like to inform you all about the status of HLTA’s legislative priorities this session.
Regarding homelessness, HLTA endorses thoughtful, comprehensive approaches to help the homeless receive permanent housing and necessary services, or help them return to their out-of-state homes if desired. We believe that a portion of the Transient Accommodations Tax revenue should be appropriated to relieve homelessness in areas that impact tourism, across the state. While the two measures we initially supported were stalled in the originating houses, we are currently targeting Bill SB1290 with House Tourism Chair Richard Onishi's support to appropriate $2 million to assist with this issue on a statewide basis. As you all know within the last 2 years, HLTA has made significant contributions on Oahu, Maui and Kauai to help combat homelessness outside of what we do through Charity Walk and this year we will do likewise for Hawai'i Island.
Our second priority issue this session is establishing a State airport corporation to give a laser-like focus to the ever-evolving demands of our state’s airports. With great leadership and support from the Department of Transportation’s Director Ford Fuchigami, Bill SB658 is currently moving smoothly and we expect it will pass this year. No taxes or public financing is required of this authority as all the funding will come from airline fees.
Our highest priority issue this session is establishing a level playing field with the Transient Vacation Rental market by collecting Transient Accommodation Taxes and gaining more transparency from online accommodation operators. Last year we supported a measure approved by the Legislature that would authorize online accommodation websites to collect taxes from their users and remit payments to the state; however, it was eventually vetoed by the Governor. This year we know that the Governor will not sign the same bill as last year, and are working to insert amendments or stronger language that will address more transparency and accountability for both the online platforms and individual operators; provisions to address the registration of transient vacation rentals; enforcement of reasonable fines that will hold the operators and hosting platforms to operate within the law and ensuring that state law or policy will not preempt the counties from implementing and enforcing their rules and regulations on this matter. I am optimistic despite the various twists and turns that this measure has encountered, we will find common ground, especially if the Governor indicates to the Legislature what is going to take for him to sign a bill into law. Millions of dollars that the state doesn't have should be collected sooner rather than later.
Two other tourism related issues of note that we support include Bill SB1084 backed by Senate Tourism Chair Glenn Wakai relating to reforming the Hawaii Tourism Authority, and Bill SB994 strongly supported by Senate President Ron Kouchi and Lt. Gov. Shan Tsutsui relating to the establishment of a stadium authority. We’ll continue to support the HTA reform bill, especially since the procurement exemption was recently reinstated, and more importantly, with language in the measure to have the Governor fill appointments to the board in a timely manner and with individuals who have strong visitor industry experience. We believe this measure will strengthen HTA and help it foster a better relationship with the State. On the stadium authority, I have touted many times that a new sports / entertainment facility with transient oriented development opportunities and benefits are immeasurable, and the timing has never been better for this bill with the land being returned to the state. I envision a public / private partnership that would lighten the financial burden on the state. SB994 appears to be in good shape at the legislature with great support from the public and private sector.
Finally in addition to the issues we are actively addressing in the State Legislature, we are also staying alert on City and County measures as well. One such measure includes a proposed increase of $0.50 on hotel and resort Real Property Tax Assessments by the City administration which HLTA strongly opposes. At our recent Government Affairs meeting held on Thursday, March 16, we invited Councilmembers Ernie Martin (Former Council Chair and Budget Chair) and Ann Kobayashi (Former Budget Chair and now head of the Parks, Community & Customer Services Committee, who shared their thoughts and concerns with this rate increase because it will negatively impact our visitor industry operations and in turn, our hard-working employees. We share a belief with the Councilmembers that there is more money to be trimmed from the budget and urge the City to look into alternatives such as collecting funds from transient vacation units.
HLTA officially kicked off the 39th annual Oahu Charity Walk today at Pomaika'i Ballrooms at Dole Cannery. Mahalo to Enterprise, Alamo, and National Rent-A-Car for graciously donating $10,000 to the Charity Walk across all counties - what a way to get the fundraising efforts started! Congratulations are also in order for Aqua-Aston Hospitality for winning the 2016 Charity Walk t-shirt design contest! The design reflected HLTA's motto, "We're all in this together," written in numerous languages with various slipper symbols. Oahu's Charity Walk will take place on Saturday, May 20th at Ala Moana Park McCoy Pavilion. Register or donate to the walk here:
https://app.mobilecause.com/vf/OahuCW or learn more about the Charity Walk at www.charitywalkhawaii.org
Mahalo for attending another awesome Hospitality Industry Pau Hana! Congratulations to our Kahiau Award recipient, Everlyn Kidani of Aqua Oasis Hotel! Read more about Everlyn and our previous Kahiau Awardees here: http://www.hawaiilodging.org/hip-kahiau-award-recipients
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