Mufi's Message June 14, 2019

Hawaii State Association of Counties Keynote Speech: 
​Sustainable Tourism - Marketing vs. Managing

Each year, county officials, business community members, lobbyists, non-profits, and residents participate in the Hawaii State Association of Counties (HSAC) annual conference. This year’s 4-day meeting was hosted by the members of Maui’s County Council under the leadership of Council Chair Kelly King.  The meeting convened at the beautiful Wailea Beach Marriott Resort & Spa where hundreds gathered for educational seminars and networking opportunities.

During the planning phase of this year’s conference, Council Chair King invited me to participate as the Keynote speaker on the topic of sustainable tourism.  As many of you know, I have been a perpetual advocate of managing tourism better, and for those of you who are avid readers of our newsletter or Midweek columns you would know that I have spoken on this topic to several different audiences through the years . I graciously accepted the invitation as this hot topic is not only timely but needs to be better understood by leaders in our State.

During my speech this past Monday, I touched on the many facets of sustainable tourism and why it is in some areas a controversial topic discussion in our islands and across the globe.

I started my presentation by outlining the current status of tourism - both locally and worldwide. As we near the 10 million annual visitor mark in Hawaii, the United Nations World Tourism Barometer has clocked global international travelers at 1.4 billion this past year.  I have said time and time again that tourism has become a victim of its own success.  With many locales experiencing a rapid influx of travelers, many have generated a new buzzword to describe this phenomenon, calling it “over-tourism.” 

This has led a number of destinations to incorporate new rules, regulations, and remedies to deter, or limit, the saturation of new tourists.  We have witnessed countries, cities, and towns turn to rather draconian measures to address the issue.  Such is the case with Boracay island in the Philippines, where the President issued a six-month closure of the island to allow for environmental rejuvenation.  That is an extreme example, but a reminder that we all need to be at the table when discussing the issue of “over-tourism”, if not the industry will simply be dictated to by those who are not familiar with the potential repercussions this would have on our economy and reputation.  

On that note, it has been my long-held personal belief that we need quality tourism rather than quantity tourism; I have said that the key is to allocate more time, attention, focus and resources to managing tourism better.

During my address, I highlighted my five-point plan, which I have maintained over my 25-year tenure in tourism.  I have developed and advocated these key points during my time as the Director of the Department of Economic Development and Tourism, to my service as a Honolulu Councilmember, as the former Mayor of Honolulu, and currently as the President & CEO of the state’s largest private sector visitor industry organization.    

They are: 

1.         Marketing
2.         Lift capacity
3.         Priority on public safety
4.         Nurture & share the Aloha Spirit
5.         Protect our natural resources, maintain infrastructure, and upgrade our attraction. 

Given the county government attendees, I focused on my past county-level experiences, sharing solutions I incorporated for the preservation of Hanauma Bay and Waimea Valley, ensuring the safety of our residents and first responders through the closure of Haiku Stairs, and the solutions I came up with to remedy the tragic Ala Wai Canal sewage spill I faced during my first mayoral term.

There are decided challenges to managing tourism.  When I assess the place of tourism in our economy and in our community, I see several recurring concerns emerge from critics that:  tourism doesn’t do enough to give back, that there’s no commitment to the future of Hawaii because hotel ownership is largely hedge fund investors and offshore companies, and that there are too many tourists.

To address these complaints, it is vital that the industry is proactive in demonstrating how good it has been for Hawaii as the number one provider of jobs; and that it is critically important that tourism stakeholders are involved in discussions on managing tourism in each county.

One such case where the industry and community can mutually benefit, is through the regulation of illegal transient vacation rentals.  The TVR market has reached an uncontrollable tipping point affecting affordable housing options and deteriorating the quality of life in our neighborhoods.  It has been refreshing to see all local government bodies progressively working towards solutions to this overgrown problem, but we need to take a bolder stance in containing it.  Maui, Kauai, and Hawaii Island, all have enforcement tools established, and Honolulu is about to follow up with the strictest set of rules yet (see following section for TVR update).

Additionally, I highlighted the synergistic relationship between the Hawaii Lodging & Tourism Association, the Hawaii Tourism Authority, and the Hawaii Visitors and Convention Bureau.  It has been a breath of fresh air, that the new Hawaii Tourism Authority President, Chris Tatum, is a staunch believer and advocate of managing tourism better.  His many years as a top executive in the visitor industry has enabled him to understand the need for tourism to engage the local community in all our pursuits and endeavors.

Through our partnership we have been able to successfully enhance the community engagement benefits through the upcoming LA Rams and Dallas Cowboys game, the past Lotte Golf Championship, the Young Entrepreneurs program established by the Hawaii Food & Wine Festival, and the inauguration of the Ho’oilina Scholarship.  HTA marketing dollars were shifted to award full-ride scholarships to 10 high school seniors studying tourism at a local university.

I wrapped up my presentation by covering the importance of pubic safety, the upkeep of our infrastructure, and the importance of establishing tourism strategic plans which Maui and Kauai have already done.

My final remarks spoke to the importance of diversifying within tourism, not beyond tourism.  At the end of the day tourism is our core-competence, and it is what we do best.  Therefore, we must take what we are noted for by residents and visitors, and strengthen our image as a wonderful place to live, vacation, and do business.  If we do that then we can use tourism to strengthen our appeal and advantages in health, agriculture and culinary arts, sports, arts and culture, and education.  This in turn will help us generate more quality jobs, and ultimately create a sustainable tourism industry and island home.
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My presentation was covered in The Maui News article “Hotel official: Time to ‘diversify tourism’.  Click here to read it.

HLTA's Upcoming Events:

​HYPE Network Like A Boss, 2.0
On Thursday, June 20th, please join our HYPE (Hospitality’s Young Professionals and Entrepreneurs) for Network Like A Boss, 2.0.  Back by popular demand, this is sure to be an interactive and engaging evening with a powerhouse panel.  
 
The four panelists will be: Jan Kaeo, Dale Carnegie Training - Hawai'i and Guam; Ben Rafter, OLS Hotels & Resorts CEO; Daniel Chun, Alaska Airlines Director of Sales, Community & Public Relations for Hawai'i; and Ku’uhaku Park, Matson Vice President of Government and Community Relations. 
 
Reprising her role as moderator for this #LikeABoss seminar will be former HYPE Active Chair and current Director of Sales and Marketing for the Residence Inn by Marriott Kapolei, Kelly Kitashima. 
 
To register for this educational event, hosted at the Queen Kapiolani Hotel and generously sponsored by Matson, please click here. 

Oahu Chapter Talk & Tour
The evening of Thursday, June 27th will be the HLTA Oahu Chapter’s Talk and Tour of the newly-renovated Waikiki Beachcomber by Outrigger.  
 
For just $30 per person, please join our Oahu Chapter as we enjoy pupus and a drink at Maui Brewing Co., including valet parking, generously hosted by General Manager Ike Cockett (please note, parking is valet only). 
 
You may recall that I attended their opening celebration about a month ago, and I can personally attest that it is a great venue, with great ambience.  We as HLTA have also been lucky enough to utilize one of their beautiful new meeting rooms, and I hope that you’ll register with our Oahu Chapter here to see the latest new property on Kalakaua Ave with HLTA on the 27th! 

​Stories featured HLTA's homepage:
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LA Rams Hold Youth Clinics in Hawaii

In advance of the Los Angeles Rams - Dallas Cowboys preseason game on August 17th, Rams star Safety John Johnson III, Rams legend, and former University of Hawaii Warrior, Pisa Tinoisamoa, and the Rams cheerleaders will be visiting Oahu this weekend.  My staff and I have been working hard on this exciting sports tourism event, in partnership with the Hawaii Tourism Authority and the Hawaii Visitors & Convention Bureau.

Starting this morning at Farrington High School, Pisa Tinoisamoa and the Rams will be donating football cleats worn by Rams players to student-athletes.  The “Cleats for Character” program led by Pisa will involve a discussion about the merits of good character, the importance of goal-setting, and the transferrable life skills that can be attained through teamwork.

This afternoon, will include a media opportunity for Pisa and Johnson to sign autographs and take photos with fans.
The 7-on-7 Passing and Big Man Championships will be on Saturday, as they feature 300 students from the eight top high school teams during the 2018-19 football season.  Each county will be represented on the field, as schools from Kauai, Maui, and Hawaii Island have been flown in to join our Oahu teams. 

Saturday will also be the LA Rams Cheer Camp, for 300 youth (K-12) who will be led in warm-up and stretching routines, as well as a choreographed dance.  Following the session, the Cheerleaders will also perform for the attendees.

The Rams-Cowboys preseason match-up on Saturday, August 17th will be the first NFL exhibition game played at Aloha Stadium since 1976.  During the week leading up to the game, the Rams will bring their PLAY 60 Military Base Tour to the islands, host active service members and veterans to a team practice, visit schools, hold additional football and cheer clinics, and attend community events. 
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For questions about this weekend or other Rams efforts, please feel free to contact my Senior Director of Operations, Edgar Palafox at epalafox@hawaiilodging.org.

 
Media Coverage: 
LA Rams community events, KHON2 Wake Up 2day 
LA Rams will host football and cheerleading clinics, KHON2 ​

Moving Forward: Transient Vacation Rentals

Last week Friday, the Honolulu Committee on Zoning, Planning, and Housing convened a special hearing on transient vacation rental measure’s Bill 89 (2018) and Bill 85 (2018).  Both opponents and proponents of the measures, once again, occupied the second floor of Honolulu Hale as the discussion of regulating TVRs in the City & County of Honolulu reconvened.  The special committee hearing followed the Full Council’s May 8th decision, which recommitted the bills back to their subject matter committee for further discussion.

I was joined at the table by State Senator Sharon Moriwaki, who represents the Waikiki district, in advocating for the measures before the committee, and more importantly urging decisive action by the Council.  I spoke to HLTA, HTA, and WIA’s support of Bill 89 (2018) CD2, which would limit whole-home TVRs to the zones they are currently legal in (hotel, resort, mixed use resort in the Waikiki Special District), and would allow for a very controlled expansion of owner/manager-occupied Bed & Breakfast units.  I reiterated the point that communities are continuously being affected by the proliferation of these illegal short-term rentals and that the “longer you delay, the more we will have to pay.”  The other counties are all moving forward with tangible solutions to the TVR quandary, and it is time for Honolulu to follow suit. 
To the Council's credit, they took the Mayor’s bill and transformed and strengthened it into what will be the strictest set of guidelines across the State.  I closed my testimony by stating that if the Honolulu City Council is able to move out meaningful legislation, it can serve as a template for all the other counties to utilize.

Senator Moriwaki followed my lead in her testimony and spoke of the impact that illegal TVRs have on the tourism industry, our State’s number one economic driver. She additionally claimed that we are the only sun belt state losing population because there are no affordable housing options. Also, with the average visitor daily spending declining, it is evident that our tourism industry, and the economy, are being affected. 
With testimonies taking the committee well into the evening, the votes were cast as both Bill 89 (2018) and Bill 85 (2018) were passed out of Committee, unanimously with the CD2 drafts proposed by Councilmembers Menor and Manahan.  The bills are now slated for a special Full Council hearing on Monday, June 17, at 10 am at Honolulu Hale.  This will be the second time both measures will be up for third, and final, reading and we encourage our industry members to come out to support the passage of Bill 89 (2018) CD2. We are poised to cross the goal line! 

To view the special hearing agenda, click here, to sign up to testify, click here.

During her testimony at the City Council, Senator Moriwaki, also made mention of the bill now before the Governor, SB 1292.  She stated that during the heated debate that ensued during the 11th hour of the State Legislative Session, 13 of the 25 Senators felt that zoning enforcement should be left up to the counties, while the State focuses on the tax collection component.

A few weeks ago, I met with Governor Ige on Senate Bill 1292, accompanied by HLTA Chairperson Glenn Vergara, and HLTA Chairperson-elect Michael Jokovich.  We laid out the hospitality industry’s concerns with the transient vacation rental tax collection measure sitting before him.  In regard to the measure, Governor Ige assured us that he would be speaking with his administration, as well as county officials, to see whether or not the measure would affect their ability to enforce applicable zoning laws, penalties, and tax collection.  He shared similar concerns with the visitor industry, as the bill is comparable to the measure that he vetoed back in 2016, HB1850.  With just under two weeks left for him to make his decision on placing the measure on his “intent to veto” list, and with the timing of Honolulu’s final decision on Bills 89 (2018) and 85 (2018), we issued a letter to the Governor urging his veto of SB 1292. 
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To read HLTA’s letter to Governor Ige, click here. ​