In its Governance Study RFP 24-07, the Hawai‘i Tourism Authority (HTA) raised the question of whether an alternative tourism governance system is necessary. The answer is yes.
It is clear there is a widespread belief that Hawai‘i’s signature industry requires state oversight. Of the 691 stakeholders responding to a survey earlier this year, 67% agreed that it is important to have a state tourism governance system, with 45% strongly agreeing. There also is a firmly held belief that a new structure is needed. This was expressed not only through the survey, but in interviews and workshops across the islands conducted from February to May 2024.
A common thread runs through these many hundreds of encounters. It is clear that creating trust will be the key to success. When stakeholders were asked to identify the most important qualities for a state tourism governing body, “Trustworthy” was the top pick. If a transition is set in motion but fails to restore the trust of residents in tourism and the
trust of elected leaders and stakeholders in the governing organization, the future viability of Hawai‘i’s core industry is jeopardized. Re-establishing trust will require two simultaneous actions: thinking in new ways and setting aside past agendas and resentments, however justified. It is undeniable that HTA has made gains in the past legislative session. At the same time, legislators placed tight new controls on its actions and took away the last shred of its independence as an authority. This is prima facie evidence of a lack of trust.
In Hawai‘i, the path to trust involves consultation of stakeholders, collaboration with stakeholders, action with stakeholders, and aloha. To borrow the words of a beloved Honolulu pastor, the Reverend Abraham Kahikina Akaka, “Aloha is the unconditional desire to promote the true good of other people in a friendly spirit out of a sense of kinship.”
This wisdom lies at the heart of destination stewardship. Genuine collaboration to achieve positive outcomes for all around shared goals is inherent to stewardship. “A sense of kinship,” which Rev. Akaka also describes as ‘Ohana, is what makes collaboration work. This is how trust can be built, and this is why the first of the 11 recommendations in this report advises that the HTA be reorganized as a destination stewardship organization. This recommendation, and nearly all of the other ten that follow, relate in some way to restoring and improving trust.
Much has changed since HTA was created in 1998 to revitalize a state economy battered by the decline of its agricultural sector. At the time, HTA’s dedicated revenue stream, along with provisions giving it independence to compete effectively, made it a global model for tourism governance. In the years that followed, HTA became among the first in the world to advance destination management strategies and to seek sustainable tourism solutions. By embarking on a path of destination stewardship “to promote the true good” and in a “friendly spirit out of a sense of kinship,” Hawai‘i can be a global leader again.
To do otherwise puts Hawai‘i at risk. The state’s tourism economy is softening. Even as the strong U.S. dollar continues to make Hawai‘i a more expensive option for international travelers, other issues are arising. In April 2024, top operators and wholesalers attending a Travel Weekly Leadership Forum roundtable reported ongoing fallout from the August 2023 Maui fires. Many said their frontline representatives were countering misperceptions daily that all of Hawai‘i, not just Maui, has been impacted, and that residents are not eager to welcome visitors.
The future success of Hawai‘i tourism rides on a complex set of factors. “The Hawai‘i Challenge” is not a threat that is confined to the HTA. Because tourism is so engrained in the fabric of the islands’ economy and way of life, a threat to tourism is a threat to government budgets and to the finances of about 30% of the state’s workforce as well.
As the wholesalers and tourism operators were warning, travelers who reported feeling unwelcome in Hawai‘i were gravitating to other destinations. The longer that negative attitudes toward visitors stay alive and in the media, the more likely these perceptions will take a toll on the appeal of Hawai‘i as a destination. Continuing pushback from residents who see no benefits from tourism threatens the visitor industry’s social license to operate. This appears to be at the root of many negative attitudes expressed toward HTA in a stakeholder survey conducted in March and April 2024. These attitudes had far more to do with residents’ unhappiness with tourism in general than with HTA. The authority catches the heat for many things that go wrong, even traffic jams.
These negative attitudes, coupled with a loss of competitiveness, are posing a growing threat to Hawai‘i’s relevance as a travel destination. But few outside the tourism industry see the threat. Many in Hawai‘i take the appeal of their islands for granted. It is commonplace for residents — even highly informed people — to express views that Hawai‘i doesn’t need to promote itself to visitors. It is true that Hawai‘i ranks high as a dream destination. But independent research consistently points to a sobering reality: Travelers may dream of Hawai‘i but they travel to other destinations that offer more value for the money and that are much easier to get to.
Hawai‘i’s distance from key markets is likely to pose an even greater threat in the future as more travelers seek to reduce their carbon impact. The Global Business Travel Association says a destination’s sustainability practices already is a top concern for meeting and event planners. Answers can be found in centering the Hawai‘i product around an authentic experience of its unique culture and place. Nowhere else can compete with that.
A THIRD THREAT
Hawai‘i tourism has been grappling with another profound threat. In recent years, the state’s lead tourism agency has been stripped of funding and authority even as competitors have seen their budgets and influence rise. Constant pressures and even attacks have been an ongoing distraction that have shaken focus, created uncertainty, and undermined confidence. Though the agency is on track to receive its first legislative appropriation in three years for FY25, the HTA today is a far weaker agency than it was in 2021. The HTA’s new $63 million budget is strictly prescribed. Among other privileges on the chopping block, the HTA is losing its flexibility to transfer funding from one line to another to address challenges that may arise in the new budget year. Meanwhile, it is being required to take on new responsibilities — including implementation of the four DMAPs — with no additional funding. Thus, at a time when other threats are rising, the state’s lead tourism agency has less ability to adapt, think long term, and create success.
This third threat is at the heart of why this study recommends that a new system of tourism governance is necessary. The state tourism structure lauded as a global model 25 years ago has lost much of its authority and the trust of its stakeholders. Many acknowledge recent improvements, but the almost unified outcome of seven Ideation Sessions held in April and May 2024 strongly affirmed that the current structure requires significant reform. While many saw merit in restructuring state tourism oversight in a Cabinet-level agency, there was far more interest in reshaping Hawai‘i’s tourism agency as a nonprofit corporation.
The Case for New Pathways
Any tourism organization will lose relevance if:
Transitioning to a new form of tourism governance will require much collaboration, effort, and goodwill to achieve the desired results. It also will require time. The transition plan outlined in RECOMMENDATION 11 would take at least two years to accomplish.
Questions may be raised about whether HTA can be restructured in keeping with the recommendations of this report rather than create an entirely new organization. Yes, it is possible. Based on the research and findings detailed in this report and the companion situational analysis, however, changing the HTA is not the optimal solution. It is recommended for Hawai‘i to create a new system of tourism governance, free of the baggage of the past, and structured top to bottom to have independence and stability to steward a thriving tourism ecosphere in keeping with the desires of residents and visitors.
THE BACKDROP FOR THIS STUDY
In authorizing this governance study, the HTA has courageously signaled an openness to revisiting the question that was raised in 1997: What is the best approach for generating positive outcomes from the state’s top economic driver? The answers are much different today. It is important to note that both the HTA and the HTA Board have refrained from directing the outcomes of this study to ensure that the findings and recommendations are seen as credible and reflective of stakeholder perspectives across Hawai‘i.
Last year, key legislators agreed to postpone action on drastic efforts to reorganize HTA until this study could be completed. Those efforts have faded, and legislators now are advancing alternatives through SB3364. Among the many provisions is language underscoring the importance of destination management and regenerative tourism for effective governance of Hawai‘i tourism. The recommendations of this study are closely aligned with this new requirement.
As indicated earlier, this report draws much inspiration and its name from the Hawaiian value of Aloha, which conveys profound layers of meaning. For instance, on Maui, our consulting team learned that the County awards grants “with Aloha,” meaning with fairness and good intention. In the context of this report, Governance with Aloha means governing with a willingness to understand and honor various perspectives. It also means governing in ways that are intended to create harmony, trust and positive outcomes, to look beyond the obvious, and to seek partnership in the truest sense of the word. These are the themes that guide the following recommendations.
In its Governance Study RFP 24-07, the Hawai‘i Tourism Authority (HTA) raised the question of whether an alternative tourism governance system is necessary. The answer is yes.
It is clear there is a widespread belief that Hawai‘i’s signature industry requires state oversight. Of the 691 stakeholders responding to a survey earlier this year, 67% agreed that it is important to have a state tourism governance system, with 45% strongly agreeing. There also is a firmly held belief that a new structure is needed. This was expressed not only through the survey, but in interviews and workshops across the islands conducted from February to May 2024.
A common thread runs through these many hundreds of encounters. It is clear that creating trust will be the key to success. When stakeholders were asked to identify the most important qualities for a state tourism governing body, “Trustworthy” was the top pick. If a transition is set in motion but fails to restore the trust of residents in tourism and the
trust of elected leaders and stakeholders in the governing organization, the future viability of Hawai‘i’s core industry is jeopardized. Re-establishing trust will require two simultaneous actions: thinking in new ways and setting aside past agendas and resentments, however justified. It is undeniable that HTA has made gains in the past legislative session. At the same time, legislators placed tight new controls on its actions and took away the last shred of its independence as an authority. This is prima facie evidence of a lack of trust.
In Hawai‘i, the path to trust involves consultation of stakeholders, collaboration with stakeholders, action with stakeholders, and aloha. To borrow the words of a beloved Honolulu pastor, the Reverend Abraham Kahikina Akaka, “Aloha is the unconditional desire to promote the true good of other people in a friendly spirit out of a sense of kinship.”
This wisdom lies at the heart of destination stewardship. Genuine collaboration to achieve positive outcomes for all around shared goals is inherent to stewardship. “A sense of kinship,” which Rev. Akaka also describes as ‘Ohana, is what makes collaboration work. This is how trust can be built, and this is why the first of the 11 recommendations in this report advises that the HTA be reorganized as a destination stewardship organization. This recommendation, and nearly all of the other ten that follow, relate in some way to restoring and improving trust.
Much has changed since HTA was created in 1998 to revitalize a state economy battered by the decline of its agricultural sector. At the time, HTA’s dedicated revenue stream, along with provisions giving it independence to compete effectively, made it a global model for tourism governance. In the years that followed, HTA became among the first in the world to advance destination management strategies and to seek sustainable tourism solutions. By embarking on a path of destination stewardship “to promote the true good” and in a “friendly spirit out of a sense of kinship,” Hawai‘i can be a global leader again.
To do otherwise puts Hawai‘i at risk. The state’s tourism economy is softening. Even as the strong U.S. dollar continues to make Hawai‘i a more expensive option for international travelers, other issues are arising. In April 2024, top operators and wholesalers attending a Travel Weekly Leadership Forum roundtable reported ongoing fallout from the August 2023 Maui fires. Many said their frontline representatives were countering misperceptions daily that all of Hawai‘i, not just Maui, has been impacted, and that residents are not eager to welcome visitors.
The future success of Hawai‘i tourism rides on a complex set of factors. “The Hawai‘i Challenge” is not a threat that is confined to the HTA. Because tourism is so engrained in the fabric of the islands’ economy and way of life, a threat to tourism is a threat to government budgets and to the finances of about 30% of the state’s workforce as well.
As the wholesalers and tourism operators were warning, travelers who reported feeling unwelcome in Hawai‘i were gravitating to other destinations. The longer that negative attitudes toward visitors stay alive and in the media, the more likely these perceptions will take a toll on the appeal of Hawai‘i as a destination. Continuing pushback from residents who see no benefits from tourism threatens the visitor industry’s social license to operate. This appears to be at the root of many negative attitudes expressed toward HTA in a stakeholder survey conducted in March and April 2024. These attitudes had far more to do with residents’ unhappiness with tourism in general than with HTA. The authority catches the heat for many things that go wrong, even traffic jams.
These negative attitudes, coupled with a loss of competitiveness, are posing a growing threat to Hawai‘i’s relevance as a travel destination. But few outside the tourism industry see the threat. Many in Hawai‘i take the appeal of their islands for granted. It is commonplace for residents — even highly informed people — to express views that Hawai‘i doesn’t need to promote itself to visitors. It is true that Hawai‘i ranks high as a dream destination. But independent research consistently points to a sobering reality: Travelers may dream of Hawai‘i but they travel to other destinations that offer more value for the money and that are much easier to get to.
Hawai‘i’s distance from key markets is likely to pose an even greater threat in the future as more travelers seek to reduce their carbon impact. The Global Business Travel Association says a destination’s sustainability practices already is a top concern for meeting and event planners. Answers can be found in centering the Hawai‘i product around an authentic experience of its unique culture and place. Nowhere else can compete with that.
A THIRD THREAT
Hawai‘i tourism has been grappling with another profound threat. In recent years, the state’s lead tourism agency has been stripped of funding and authority even as competitors have seen their budgets and influence rise. Constant pressures and even attacks have been an ongoing distraction that have shaken focus, created uncertainty, and undermined confidence. Though the agency is on track to receive its first legislative appropriation in three years for FY25, the HTA today is a far weaker agency than it was in 2021. The HTA’s new $63 million budget is strictly prescribed. Among other privileges on the chopping block, the HTA is losing its flexibility to transfer funding from one line to another to address challenges that may arise in the new budget year. Meanwhile, it is being required to take on new responsibilities — including implementation of the four DMAPs — with no additional funding. Thus, at a time when other threats are rising, the state’s lead tourism agency has less ability to adapt, think long term, and create success.
This third threat is at the heart of why this study recommends that a new system of tourism governance is necessary. The state tourism structure lauded as a global model 25 years ago has lost much of its authority and the trust of its stakeholders. Many acknowledge recent improvements, but the almost unified outcome of seven Ideation Sessions held in April and May 2024 strongly affirmed that the current structure requires significant reform. While many saw merit in restructuring state tourism oversight in a Cabinet-level agency, there was far more interest in reshaping Hawai‘i’s tourism agency as a nonprofit corporation.
The Case for New Pathways
Any tourism organization will lose relevance if:
Transitioning to a new form of tourism governance will require much collaboration, effort, and goodwill to achieve the desired results. It also will require time. The transition plan outlined in RECOMMENDATION 11 would take at least two years to accomplish.
Questions may be raised about whether HTA can be restructured in keeping with the recommendations of this report rather than create an entirely new organization. Yes, it is possible. Based on the research and findings detailed in this report and the companion situational analysis, however, changing the HTA is not the optimal solution. It is recommended for Hawai‘i to create a new system of tourism governance, free of the baggage of the past, and structured top to bottom to have independence and stability to steward a thriving tourism ecosphere in keeping with the desires of residents and visitors.
THE BACKDROP FOR THIS STUDY
In authorizing this governance study, the HTA has courageously signaled an openness to revisiting the question that was raised in 1997: What is the best approach for generating positive outcomes from the state’s top economic driver? The answers are much different today. It is important to note that both the HTA and the HTA Board have refrained from directing the outcomes of this study to ensure that the findings and recommendations are seen as credible and reflective of stakeholder perspectives across Hawai‘i.
Last year, key legislators agreed to postpone action on drastic efforts to reorganize HTA until this study could be completed. Those efforts have faded, and legislators now are advancing alternatives through SB3364. Among the many provisions is language underscoring the importance of destination management and regenerative tourism for effective governance of Hawai‘i tourism. The recommendations of this study are closely aligned with this new requirement.
As indicated earlier, this report draws much inspiration and its name from the Hawaiian value of Aloha, which conveys profound layers of meaning. For instance, on Maui, our consulting team learned that the County awards grants “with Aloha,” meaning with fairness and good intention. In the context of this report, Governance with Aloha means governing with a willingness to understand and honor various perspectives. It also means governing in ways that are intended to create harmony, trust and positive outcomes, to look beyond the obvious, and to seek partnership in the truest sense of the word. These are the themes that guide the following recommendations.
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