Hawaii Tourism Authority president and CEO John De Fries joins Spotlight Hawaii

Hawaii Tourism Authority president and CEO John De Fries joins Spotlight Hawaii

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spotlighting Hawaii's leaders we want to bring in Governor David good morning Mr Mayor lieutenant governor good morning thanks so much for joining us mayor Derek kawakami thank you so much uh senator for being here spotlighting the issues where is the virus right now in our community how much is this overall going to cost the state how are you responding to communities concerns talk about the level of citations that you guys are writing Spotlight Hawaii with yunji Denise and Ryan calaisuji on the digital platforms of the Honolulu star Advertiser this episode of Spotlight Hawaii is brought to you by Longs Drugs happy Aloha Friday thanks so much for joining us here on Spotlight Hawaii I'm yunji de Nies my partner Ryan calaisuji is off this morning but the show must go on and we have a great guest for you and a lot to talk about we're join live this morning by HTA president and CEO John de freeze who is going to be telling us about so many things John thanks for being here oh thanks for having me it's been a while it has been it's always good to see you I want to start this morning with the article that Allison Schaefer from the paper put in earlier this week which is a great piece on this geolocation data that you guys are collecting and what it's showing tell us a little bit about when this started and what exactly what exactly you are capturing in the moment you know it's relatively new and we're capturing data each month and I'm grateful for Allison for having highlighted this and uh my understanding is uh when our board meeting adjourned uh she was able to meet with uh b-bed research director uh tourism research director Jin Chun and Jennifer was able to run her through it essentially uh if you go to our website the a State website under research on the menu the first thing that's going to pop up is called the symphony dashboards and you're going to be able to access this information currently it has the top 30 points of interest in terms of visitation and what it's looking at is the percentage of visitors that are actually um visiting as tourists or visiting that area as a local resident and I think um people will be astounded at the amount of local use that is um is being measured at this time now I want to emphasize one thing this is not big brother getting into all your information and all your data it's a passive survey that is basically picking up the area codes on your cell phone and measuring it in that way and there are algorithms that allow some level of sorting for instance let's take our Avenue for instance as a point of interest that is being measured if if your cell phone is staying in a relatively same location for five hours eight hours then the algorithm will not Factor you in because it would determine that you're employed there now if if I'm an employee and not being measured the minute I walk across the street uh to a restaurant or to a fast food um Outlet um I will get picked up that way and my understanding is that if you're within 25 to 30 feet of the the actual geofence that has been set off it'll pick up your um uh your cell phone but I want to emphasize the Privacy issue because I know that can be Troublesome as well well I'm interested because when she looked at the top destinations places like Kailua town and even Waikiki the majority of area codes that were picked up are not from outside of the state you know we hear so much about the impact of the visitor but it sounds like Kama Aina are also visiting some of the most popular spots so you know when you see that tell us your reaction to that finding you know um I when I first started looking at this and became aware that I too was surprised at that number and so you've got inner Island Kama Aina Travelers that if we remain in Waikiki for a moment that are in there I will also tell you that we need to account for the fact that certain months you may have one or two parades right Aloha week or you might have um that we just had the pride uh parade in the Little League parade right and so when you get that and that's going to obviously bring a higher concentration of local people inside the space that is being measured so uh each month we need to be able to factor that in I will tell you that as a technological tool it will help State and County uh Park managers understand usage patterns understand seasonal patterns and demographics um so we see this becoming a greater use as a resource as we move forward so again I'm glad that it was highlighted in the article do you think that having this information and knowing that you know the majority of people who are utilizing these spaces are local folks can change how we manage them and maybe change some of the perceptions of of who's actually using these spaces you know it is because the the whole idea of um what we refer to as or caring for our Island home right that is a comma in a way of life that is a call to action and for the most part come on uh can actually establish the model of behavior that we want visitors to to align themselves with which is why you see a lot of pre-arrival messaging that is taking place I'm sure that our viewers sense that they're receiving uh more messaging locally what we what we discovered was that a number of local people the majority of local people had no idea what messages were being sent abroad and uh and that's our fault for not getting to that point that awareness earlier but that's one of the reasons why you see this uh emphasis on malama Hawaii caring for our natural resources caring for Hawaiian culture and the community and its multi-ethnic makeup so we'll continue to do that and um and make sure that our residents are part of that whole messaging and um and and frankly will be critical through our Effectiveness in managing destinations well and on the messaging uh you know topic you kind of lead right into my next question which is the disagreement that's currently underway between cnha and hcvb can you tell us a little bit about how that is being resolved at the moment and where all of that stands knowing that you have to be sensitive that this is still sort of in negotiation sure I'm I'm limited at the moment only because we're bombed by a certain procurement um policies and codes um and and I want to put this in context okay back in January of 2020 the HTA board adopted a five-year strategic plan of which were just over halfway through and in that plan there are four pillars natural resources Hawaiian culture community and Global branding okay when they adopted that plan what they did was they altered the field of competition which historically was dominated almost solely by the Hawaii visitors and conventions Bureau and so this time around when the RFP came out that emphasized not only marketing priorities in a marketing scope of work but the requirement to also manage destinations it within that construct of the Strategic plan uh cnha became a serious competitor and um and so that resulted in a recommendation that cnha be awarded the contract within the procurement hbcb conducted itself uh accordingly by filing a protest um and and we've been in that protest mode since like mid-june late June okay at the moment the sole Arbiter in the process is the director of d-bed Mike McCartney That official role is called hopa head of purchasing agency okay and so let me just say this that the two parties have learned a lot about each other and an increased appreciation for what they each bring to the challenges that Leia had both in marketing and managing Hawaii as a visitor destination as a result they have come up with a conceptual uh agreement okay as to how they could coexist it in a way that rearrates the uh think is in the best interest of Hawaii okay so that's where the parties are at the hopa or the director of d-bed now needs to take this to the state procurement officer to see that it is in compliance with the existing RFP and I've also been informed that he is taking it to the attorney general to make sure that whatever steps we take going forward as a collaborative uh does in fact comply in full with uh the state procurement and so I'm we're awaiting final award on that in the meantime we were able collectively all three parties cnha hvcv and HDA we came to an agreement that it was in the best interest of Hawaii to extend the hvcb's current contract by six months through March 31 and give us the time to be able to pull together this larger agreement that I'm referring to well it's interesting are you essentially talking about a job share between these two organizations to split the duties of this or how would those that coexistence that you're talking about how does that actually work because they started out in Conflict they started out in uh as competitors and and there is a record I'll leave it at this there is a recognition that skill sets and capacity at both organizations can actually leverage this beyond the initial expectations that were placed on either one of them as a soul so I'll leave it at that because um I'm not able to discuss what that agreement is made of but I'm encouraged by eight a the leadership being exhibited by the presidents of both cnha kujillo Lewis hbcb John Monahan who have known for a long time and both of them have frankly put the interest of Hawaii ahead of whatever competition we were engaged in in the months of April and May well on the subject of leadership there's a political reality that you're butting up against which is that Mike McCartney of course is the head of d-bed but he's the head of d-bed under the current governor uh Tuesday the state will choose a new governor governor ige of course termed out uh the next incoming Governor where the whether that is uh Josh green or Duke Iona will choose their own head of d-bed who may or may not be Mike McCartney so given that you've extended this Runway essentially to March are you concerned that if you have a new head of d-bed that could disrupt this process which I would imagine is pretty time sensitive you know it is time sensitive um there is that all efforts are going to to because of the institutional knowledge at the bed and the historical uh background that that might bring to this um we are focused on bringing this to resolution in some form whatever form the state procurement officer and the AG determined to be the course we must take um we I believe as I'm sitting here today that we'll be able to get this an answer to this before uh director McCartney has to depart office and if for some reason he doesn't uh and we're having to to move this forward under a new director uh we will adjust accordingly and and work diligently to getting to a resolution it's very interesting that this has gone the way it has uh it sounds like this could be the possible best outcome and one that's pretty unexpected you know the the the future of Hawaii has no shortage of conflicts and and issues that have to be resolved and what this process is demonstrating is the power of collaboration is when people come together as competitors and realize and and believe me both of them within the procurement have the opportunity to protest protest protest and take this in into the future in ways that could be uh could injure the industry and they've been able to see the bigger picture and uh and frankly I'm hoping this will serve as an example of the way challenges and problems get resolved in Hawaii going forward well there's another potential challenge or a discussion that is to be had with an incoming Governor there's been a lot of talk uh on the campaign Trail about the possibility of adding a user fee uh it's something that uh you know the current lieutenant governor and his campaigning has suggested a green fee or an impact fee be collected at the airport 50 to 100 somewhere in that range we've asked governor ige on this program about the possibility of that he seems to think that it would be difficult to do at the airport because of federal regulations and the requirement that money is collected in that space be devoted to you know airport priorities so that you know he basically laid out that there was a difficulty of where you would actually collect such a fee and how you would go about doing that but beyond the logistics of such a proposal what is your organization's stance on whether or not something like this should be uh should be levied on Taurus you know the the impact fee is well intended because it can in fact subsidize and fund uh the kinds of uh initiatives and programs and conservation efforts that are natural environment in particular um needs to have supported uh that could be achieved by dedicating the percentage of the transient accommodation tax as opposed to imposing another impact fee and I would encourage us to look at that my understanding is going into the legislative session we're going to see a bill coming out of the house and supported by the Senate the to look at that I want everyone to be sensitive to the fact that right now the visitor has got a 10.25 State TT a three percent County cat a four plus percent in get okay so just under 18 before we go anywhere right and then you've got fuel surcharges you've got to so we've got to be very careful there is a price sensitivity uh in every industry and every sector of our economy I would just caution us about doing this I would also say this if I'm a businessman coming here for a four-day convention with no intention of visiting one of our your Parks or attractions because I'm here and dedicated to the convention um it's going to hurt for me to have to pay an impact fee on areas that will not impact and I think you know the governor and I have had this conversation before and and people often point to Palau as in independent nation as an example I think Palau is incredible example but there's a difference between your your abilities as a nation versus your ability as a state and I think that's what you're hearing from Governor Egan yeah interesting there I'm interested also you know we're heading into the holiday season uh what are your thoughts about what we're expecting to see we saw of course last summer visitors roaring back this summer we had a pretty good count it seems and and good spend as well but other destinations are starting to open up and we're seeing more competitiveness on the global market so what's your expectations for the holiday travel for us here in Hawaii sure I think let me say this over the last four months there's been a reduction in visitor arrivals when compared to 2019 in June that was uh an 11 reduction July was 7.6 and then I think the September numbers are roughly four percent less than 2019. now in that same time visitor uh expenditures went up in June it increased by 12 14 in July and in September 18 um more gross spending by visitors than in 2019 keep in mind Japan and the international markets are not fully recovered the pent-up demand that we're seeing from the west coast of the United States and the east coast is filling that um I think the holidays are going to be um back to roughly where we were in 2019 uh but we're hoping because the forecasters are now looking at the United States going into a recession which we will have an effect on future bookings and we're hoping by that time that um Japan in particular comes back stronger than it is currently well and if you're looking at Raw numbers I mean the data that you're presenting isn't that sort of what folks outline that they want right fewer people but more spend um how are we achieving that is that um just because of inflation the costs have gone up so they're spending more money just as a result of prices being higher or what what do you you know what do you attribute that 18 I mean that's quite a gain time oh that's a huge gain and I think that it's um people still see the value in Hawaii especially the the U.S market and uh and frankly things you know if you take a look at the average daily rates on every island and I'm focused on hotels for a moment um there's been an increase there I think the um oh the the fact that people have this pent-up demand have maybe over the last two and a half years saved enough uh financially to to make this a a dream trip for themselves I think there are a lot of factors going into it having said that though you know our retail sector hasn't fully recovered our restaurant sector hasn't fully recovered and so I'm just hoping that keep in mind in in four months July uh June through September just under 7 billion in visitor expenditures is the kind of fuel we need to get the retail restaurants and attractions and the hotels you know back with their equilibrium restored and operational flow uh back to where it used to be and and frankly we're moving in the right direction but we still got a ways to go yeah and you referenced Japan briefly I want to ask you a little bit more detailed on projections in that regard as you noted prices are up so the visitors spend is up but the you know the Yen against the dollar is uh not in their favor at the moment and that makes you know higher prices even less tolerable for the visitor Japan's gotten rid of a lot of the regulations we know October 11th is a big day in that regard for folks from Japan being able to come and go freely but uh you know Hawaiian Airlines and other airlines say have said that their planes are not jam-packed with tourists even though I'm sure a lot of Japanese visitors would like to come here they just might not be able to afford it so how is that affecting your projections uh for the Japanese Market you know you spoke to the heart of it right it the the Yen the dollar uh ratio is skewed I think it's like one 145 against a dollar right I was in Tokyo a month ago to attend uh their annual tourism Expo and it's the first live trade show I've been to since being at HDA for the last 26 months it was a big wake-up call for me walking into the international Pavilion and looking at the the intensity and the fervor with which the other destinations in the world whether it be Europe the Mediterranean Africa and across the United States uh and Asia that are competing for the Japan traveler right but to your point that the Yen ratio has to uh stabilize itself the other thing that's happening in the Japan government as part of that stabilization is and in response to that uh Yen issue is actually incentivizing visitors to visit in-country destinations and I believe that the program is still ongoing where the traveler receives a 75 dollar credit to be applied to food and beverage or retail purchases uh per day right and so Japan is trying to basically heal itself as a means of restoring kind of its economic Vitality uh but but clearly you've got um people that are very eager to come back so having said all of that um I think it's the late first quarter second quarter that we're going to see some meaningful um uptick of visitors from Japan in the meantime I'm just really appreciative to the air carriers who are making commitments uh to these routes because the to reopen a route like this and not have a a decent capacity or or um you know passenger load uh is a concern and um they can only hold that position so long so our gratitude to those carriers that are making that happen you know I'm interested you mentioned this trade show and you know as the World Market sort of re-emerge and you did reference that we are expecting you know economists say it's pretty likely that we'll be entering a recession phase which will likely soften our you know continental U.S market and perhaps other other

places as well who do you see as our biggest competitor on the world stage when it comes to attracting visitors who are we in contentious contention with the most and how do we distinguish ourselves not necessarily for the volume of traffic but for that high dollar spent you know uh domestically you'll you'll always find places like Florida New York uh parts of California Las Vegas um uh tend to to Prevail and and compete really well against Hawaii uh within Asia oddly enough um you have places like Vietnam that have emerged with higher end opportunities Bali has always been an important destination New Zealand and Australia uh compete very well for the the Japan traveler and for the U.S domestic traveler so those are um extremely competitive and and you're finding a segment of the market that is interested in more Adventure and and so I expect them to be you know moving out into into places that heretofore um or not a concern they're not major markets necessarily but they're going to take a portion of that whether it be Africa or parts of South America and and so Hawaii just needs so the wake-up call for me was how fragile this industry is post-pandemic because um I think The Travelers are going to be much more discriminate in search of more authenticity more meaning Hawaii and other visitor destinations will always be a playground but in addition to that playfulness and Recreation and Rejuvenation you're going to find a greater interest in a meaningful experiences authentic experiences in every case the only place that can deliver authenticity is really the community right and and the cultures that have made Hawaii Home beginning with the Hawaiian culture right and that I mean you key in really on our intangible and our best asset of course which is the Aloha Spirit um and we saw a lot of pushback for a time when when you know our tourism Market reopened uh just this feeling that people come Aina weren't necessarily welcoming the tourists with open arms the Aloha Spirit was waning if you will in that regard what have you seen you know how has that developed over time the one thing HTA does really well is track data so where are you seeing the sort of you know kama'aina feel toward the traveler has that gotten a little bit better or are we still in the same place you know you know uh we survey resident sentiments twice a year now and so um you know when that next survey comes up it'd be great to come back and join you and Ryan and and we can comb through that you know it's one thing to say a residents um are pushing back against tourism but as you drill down into the actual concern and complaint that individuals have it'll take you to places like uh our park is overcrowded the parking lot is overcrowded traffic is congestion uh overly congested I was at a legislative hearing where you hear old frank Hawes and Paul Brubaker um were presenting their um uh proposal for searching for a new governance model um for HDA or for the state of Hawaii take HDA out of it right and and I'm in favor of the governance model and and and and looking for what the best practices may be today right and so but I I appreciated uh brubaker's response when he heard about this and he said how come every parking problem is a tourism problem and how come every traffic jam is a tourism problem right it's something we're going to have to get through together and I want to say this one thing yunji is that a synonym to tourists is guest and more specifically a guest that has been invited okay now who invited that guest well let's go back you know I I we can go all the way back to zoning that invited a developer an investor to build an Enterprise let's call it a hotel the hotel now has a management company it extends an invitation to the markets right the local Airlines domestic Airlines International Airlines all extending invitations Hawaii tourism Authority Hawaii visitors and conventions Bureau all extending invitations to this this guest who finally gets here but the other synonym to tourists is taxpayer and go back to that just under 18 I talked about on just the the hotel side of things right not the the um the fuel surcharges and all the other things that are there my point being that that in resolving our destination management challenges we do need to look at this holistically I appreciate the local people who are local residents some of whom I may be related to who are fighting for their space on beaches right but what I want to urge them to do is don't just fight for it on Sunday okay tourism and our communities are part of a larger system and what we need is a systemic change if you feel put out on a beach that is fronting a hotel there are people on your Island uh and I'd be happy to help make those connections on Kauai for instance because I you know I had plenty of law for that Auntie who on kalapaki beach was felt the need to get out there and fight for a space she has a right to fight for that space But what I'm interested in doing is helping that Auntie help us find a way to change the system so that her grandchildren are not fighting for Sundays on the beach um and and so we're going to need one another to get through this and uh and frankly I'm invigorated by The Challenge well and I think that you know it really goes back to what we started our conversation with it and that's that that Geo uh catching data that you are finding that tracking data that's showing that all of the places that are seeing the highest traffic uh the majority of folks who are there are not from out of state and that's a really important wake-up call and so if we talk about destination management it's managing all of us right the you know that school traffic in the morning that I'm sitting in it's not Jordans but it's still traffic it's still humbug and I don't like it so how do we fix that and guess what you're going to have a new governor shortly that you're going to be able to take that message to and he can't wait to hear from you believe me well John de freeze it's always great to talk with you we are out of time this morning but thank you so much for sharing all of your knowledge with us we hope to have you back again soon good to see you Angie and please give my Aloha to Ryan I will Mahalo for being here always great to catch up with John de freeze if you missed any part of this conversation of course you can go back and watch it once we are done with the live stream you can also catch it on channel 50 as a rebroadcast or listen to it as a podcast later this afternoon wherever you get your podcast just search for spotlight Hawaii we started our conversation with uh going into some of the data that they are collecting very interesting they have basically a geofence and certain Properties or certain parts of Waikiki and other destinations around the island Allison Schaefers wrote a piece about that that was really interesting that shows that in the highest traffic areas the majority of the cell phone data that they're collecting shows an 808 area code which would indicate that those are come Aina in those spaces so how do we manage them together to make sure that we're all enjoying them in the right way he also shared a little bit about the back and forth between cnha and hcvb we know that that was a contentious decision a contract that is being negotiated about how we market and tell the world about Hawaii and some disagreements over who should have that Authority it sounds like they are finding a very interesting path forward uh perhaps doing it in some kind of a joint effort he couldn't really get into specifics just yet they're having Mike McCartney over at d-bed take that to the attorney general and other folks in an authority to figure out uh you know legally how they can do that because the RFP the request for a proposal is very specific and are they meeting that if they make these adjustments but it does sound like they are coming to some very positive Common Ground fare which is a great thing of course for all of us he talked about the Japanese visitor and just the impact that the yen to dollar ratio is having on their their ability to come back and really a lot of the airlines sticking their neck out at the moment coming flying back and forth with planes that are not as full as they had hoped and visitors spend that was very interesting too that the numbers are down in terms of you know poor people actually coming here but the spend is up and we have heard consistently from residents and politicians alike that that is something that Hawaii wants to see more of so how are we achieving that of course prices have gone up um so that would indicate that there would be increase in collections but also you know just changing the way our destinations are managed and perhaps charging a little more for the things for being able to come to Hawaii so anyway always great to catch up with John de freeze we will be back here on Monday with Ryan and Senator Brian Schatz will be joining us uh to talk about the goings-on in Washington and also very interested to hear his take on what's happening at Red Hill of course he has been at the Forefront of you know holding the military accountable for what's happening there we're very interested to talk to him and we hope that you join us right back here on Monday for another edition of Spotlight oh Hawaii Aloha this episode of Spotlight Hawaii is brought to you by Longs Drugs

2022-11-07 06:20

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