Exclusive: Hawaii's Tourism Budget is Reduced and Capped

The Hawaii Tourism Authority, the state-funded agency tasked with marketing, had its budget capped by state lawmakers at $69 million in each of the next four years, Forbes and the AP are reporting. The move has shifted $7 million in tourism dollars to other government programs in the fiscal year that started Friday.

While Hawaii is limiting its tourism spending, it still spends more taxpayer money on marketing to potential visitors than any other state. Hawaii gets its tourism funding from a 9.25 percent tax on hotel rooms and other accommodations.

Jack Richards, CEO of Pleasant Holidays, noted to Travel Agent that states across the country are reducing tourism budgets as state governments struggle with budget gaps. "The decline is not as severe as it appears, as the Hawaii State Legislature gave the Hawaii Tourism Authority a one-time increase in funding last year to stimulate travel demand which declined during the severe economic recession," he said. "The budget cap means Hawaii must spend the funds as efficiently and intelligently as possible to achieve the highest Return On Investment (ROI) for Hawaii Tourism while remaining competitive with Mexico, the Caribbean and other destinations." Richards said that Pleasant Holidays and its luxury brand, Hawaii World, will "continue to work very closely" with Hawaii Tourism while spending their own marketing funds in the key U.S. West origin markets to generate travel demand for Hawaii Vacation Packages and Hawaiian Islands Cruises. "We are very optimistic we can continue to grow sales during the next four years as we refine our marketing and promotional strategies to achieve the highest ROI."

Ken Pomerantz, President of MLT Vacations, voiced a different concern: "We understand and appreciate the efforts of the state government to balance their budget," he began. "Frankly, our biggest concern is that the large increase in taxes being assessed to hotel guests will make Hawaii less attractive as a vacation destination and depress tourism, resulting in less revenue for the state and the those involved in tourism in Hawaii."

Momi Akimseu, the Hawaii Tourism Authority's Tourism Brand Manager, spoke to Travel Agent on behalf of CEO Mike McCartney: "We don't see the cutback affecting what we're doing," she said. "We're continuing to work hard…to improve our programs, and we'll work within our budget to continue the momentum…The HTA is committed to doing our part to help lead Hawaii's economic recovery."

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