Hawaii Tourism Authority is a step closer to being dissolved

Friday, March 17, 2023

Hawaii lawmakers moved toward dramatically reshaping how the island state markets itself as a tourist destination on Thursday, when a joint House committee voted to approve a Senate bill dissolving the Hawaii Tourism Authority.

The bill, which the House committees on tourism and economic development passed with amendments, would transfer the tourism authority’s functions into an office under the Hawaii Department of Business, Economic Development and Tourism.

The measure faces two more House hearings before it can pass out of the chamber.

Rep. Sean Quinlan, chairman of the House Tourism Committee, said it was important that the new office clearly focus on destination management, not marketing.

To that end, the House committees amended the Senate bill to call the new entity the Hawaii Office of Destination Management instead of the Office of Tourism and Destination Management, which the Senate bill had called for.

The name change is more than cosmetic, Quinlan said. It’s also a way to focus the office’s mission.

In addition, the House draft creates a Cabinet-level “tourism czar” and calls for first year funding of $100 million, which Quinlan said can be used to continue providing grants for community cultural programs the authority supports.

Unlike most agencies, the authority once operated quasi-independently, largely free of input from elected officials.

Governed by an appointed board, the agency had a special line of funding from the state’s hotel tax and was free to award contracts without following state procurement laws.

Measure Cites Bungled Procurement

But the authority has come under increasing criticism in the past few years.

Policymakers questioned whether Hawaii needed to spend tens of millions of public dollars annually to market itself as a tourist destination at a time when many residents believed the state had more visitors than it could handle without creating negative side effects on the community and environment.

Lawmakers eventually began reining in HTA, by making it follow procurement law, for example. In 2021, the Legislature shut off the authority’s automatic flow of tax money.

Although the authority has responded by trying to reinvent itself as a tourism marketing and management agency, instead of just a marketing outfit, the authority attracted more intense criticism in 2022 when it repeatedly bungled an attempt to award a two-year destination management and marketing contract worth $34 million.

The bill refers to the failed procurement when stating why it was time to dissolve the authority.

This situation has been widely publicized and has demonstrated the Hawaii tourism authority’s noncompliance with the Hawaii public procurement code, the bill says.

The legislature finds that it is necessary and appropriate to dissolve the Hawaii Tourism Authority.

The bill has been referred to the House Water and Land Committee and the House Finance Committee.

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