Hawaii Tourism Authority’s John De Fries joins Spotlight Hawaii

well aloha and good morning thanks so much for tuning in here on this wednesday morning i'm ryan kalesuji joined by yunji de nies and this is spotlight hawaii on the platforms of the honolulu star advertiser thank you so much for tuning in here this morning and yunji uh we are going to be focusing on a conversation that has certainly made headlines over the past few months and that is regarding tourism that's right there's so much debate right now about the level of tourism that hawaii can sustain and a big part of the conversation of course is the hawaii tourism authority the legislature made some big moves in changing the funding mechanisms there along with how much money that agency is getting so joining us now is the ceo and president of the hta john dufrese joining us live from his office thank you so much for being here this morning let's start with some basics you know everywhere we go we feel like it's suddenly busy but are the tourists really back you know the tourists are back this summer i will tell you that between january and and all through may oddly enough arrivals were down about 50 when you compare it to a calendar year 2019 pre-pandemic it feels like much more because not all of our activities not all of our commercial centers not all of our hotels have reopened to full capacity and so those places that are open are where everyone's congregating so you have this sense that uh these arrival numbers are now exceeding 2019. i will tell you though that from mid-june through uh august we're going to see visitor arrivals primarily from the united states that will equal to or exceed what we experienced in the summer of 2019. well let's also focus in on how some of the changes that have happened to hta over the past few weeks with the legislature and their override of governor ige's veto on a measure that changed the funding mechanism for the agency that you manage talk to us about how some of those changes will impact the overall organization of the hga and your ability to move forward sure so the bill 862 actually took away the the dedicated funding source which was tat and in its place the legislature has assigned arpa or federal recovery dollars there the annual appropriation of 79 million that this agency once received was now reduced to 60 million and then 16.5 to operate the convention center was reduced to 11 million uh the tourism special fund uh which gave us much flexibility in how we could fund things uh has been suspended and we are now subject to the state procurement uh proceedings procedures as well as federal procurement compliance uh so those are the major structural changes i will tell you this that once uh 862 was overridden and became law i have a responsibility to align this agency and the entire team behind that law uh this is we have been doing that our procurement and financial people have been diligent in taking their courses that are required as part of the federal procurement uh process so we will comply uh and make this work and in making that work what is lost when you have budget cuts of that magnitude uh what what changes in your ability to do your job and what gets left behind sure you know um what what across the board so we're looking at roughly a 24 reduction in budget and so we are and and typically we would have received a fiscal year budget approval from our own board in the month of may but because of this pending legislation we've now been pushed back going into tomorrow's board meeting the board will start to look at our proposal for it but you can sense that every line item in some way will be affected in and in the use of arpa dollars we're having to test whether or not everything that we have funded in the past cultural festivals sporting events things that contribute to the brand identity of hawaii we are not as we sit here right now we are not uh clear about whether all of them will meet the federal standard so the answer to your question is this is a work in progress and uh and we'll give it our best shot but we're going to have to test the federal system to see if all of these uh events projects and initiatives stand the test of compliance with the federal standards another major change has been the way in which the tat is managed and the abilities for the counties to receive portions of that and them now having the authority uh to receive their own up to three percent a portion of tit uh wanted to get your take on how you think that will ultimately impact the visitor experience overall and just the overall cost for vacation in hawaii and also the cost that that could also mean for local residents sure so the the immediate um impact is that the counties have been without tat for this year right and then for a full year now that they've been authorized to create their own tat this will open up a public process and at minimum i would have to estimate that it's going to take them at least one year additional year and possibly a second year before they can reconcile this legally to create a tax that they can actually implement let's presume that they um the counties go for the maximum authorization of three percent when a visitor mainland or local checks into a hotel and that tax has been implemented there will be a ten and a quarter percent for the state t.a.t there will be a new three percent for the county t.a.t and on top of that there will be the get tax right so we at that point will be at like 17 and a quarter percent right and again this is applicable to um a visitor from the mainland or a visitor coming from the neighbor islands commander travelers as well so i know that the counties i understand why the counties are forced to do this because they're being impacted by the the presence of visitors and need to recover some of those costs i want to ask you a little bit about hta's core function there you know in the lead-up to the the the measures that the legislature took there's been a conversation about um you know people saying well h uh hawaii doesn't need to advertise and that's worn out by the number of visitors we already see this pent-up demand hawaii's you know one of the top destinations what is your response to that and and what do you think the core function of your organization should be because scott psyche on this program along with others have said that that really needs to be reevaluated you know um i would encourage all of the legislators to read the current strategic plan which was adopted uh in january of 2020 like six eight weeks before the pandemic hit and unfortunately that plan got caught up in all the turmoil that followed and was never properly introduced to the public to the visitor industry much less to the legislators i i am encouraged by some of the comments i hear from the legislators even the ones that were advocates of 862 because what they are actually advocating is consistent with what you will find in the strategic plan that plan adopted in january 2020 was on the heels of a full calendar year 2019 where hta's staff and its consultants went to every island to listen to what the concerns were about tourism and again this is in calendar year 2019 the byproduct of that is a strategic plan that has four pillars natural resources hawaiian culture community and community well-being and branding okay and and what that record what that recognizes is a holistic understanding of the industry believe me three decades ago those four pillars would have been hotels airlines rental cars restaurants the recognition that the natural environment needs to be protected hawaiian culture needs to be advocated and made in a central part of the brand identity of hawaii and that the community well-being needs to be made a priority is the foundation upon which hta is now conducting itself so actually the the speaker's comments are very much in line with that um and i look forward to having more conversations with him about that let's focus in on some of those pillars because we know that right now there seems to be a growing disconnect with local residents and visitors of course we're seeing what's happening over social media uh many people who are uh upset with the way in which tourists are acting uh when it comes to things like the treatment of monk seal we're seeing the desecration of certain areas that are sacred to native hawaiians wanted to get your take on where the hawaii tourism authority sees its role in helping to manage that and helping to educate those visitors entering our islands sure let me just say bad behavior by the visitor bad behavior by a local resident zero tolerance right they absolutely have no right to be uh interacting with our wildlife like that and and being less than respectful to places that are special or sacred so let me get that out of the way but let me also tell you this that what we also learned during the pandemic is how critical the relationship between all state agencies and all county agencies are to the successful management of tourism i will tell you that the weeks here in this office much of it is spent with interacting with the heads of department of transportation department of health the airports division of transportation dlnr because in order to manage an industry of this scale and this magnitude requires the collaboration of all of these agencies who have not only core missions in in that activity but actually are responsible for managing whether it's our coastal areas our beach parks our mountain trails and so so much of our work in in establishing a management plan is really in the coordination between interagencies and the collaborative ideas that result to help resolve some of these problem areas i want to bring in some of the audience krista has a question here he says she says the plan indicated improving resident views on tourism because positive opinion on tourism has been decreasing why isn't reducing or managing tourism the priority not improving resident opinions i wonder you know during the pandemic just to build on her point here uh there was a lot of talk about a tourism reset and that we would attract a new kind of visitor a higher spend perhaps fewer people that's clearly not happening at the moment but in your view what does managed tourism actually look like sure well i think we touched on it uh in the previous segment or the previous statement i made that managed tourism is a a well-integrated system of agencies that have to come together because the jurisdiction of the areas that our visitors impact are multi-jurisdictional right so you're moving out of a coastal area into a mountain zone you're moving out of airports into a resort zone all the time you are like crossing and entering a different jurisdiction and so managed tourism requires that type of integration with community leaders the private sector our hotel and industry partners as well as the public sector agencies at both the state and county levels and it comes down to no one agency has that mass jurisdiction or universal jurisdiction as a result we are responsible for creating that collaborative set that can resolve these problems and better manage the flow of visitors as they come you know as we see it now as you mentioned earlier that we could see some of those record numbers once the report and numbers come out for this year or especially for the last few months that have happened and we have to take into account that that does not include some of our biggest markets including japan and those from the asian markets are you at all concerned that once things reopen and we begin seeing those japanese visitors that we saw really helped to lead the tourism industry when they arrived to the islands in addition with the record numbers that we're seeing from the u.s

mainland that there might be just even more tourists here on uh our shores and in our islands that may that the state's infrastructure may not be able to handle the amount or the influx of visitors that may potentially be on the horizon you know that's always a concern but but i will tell you that part of what we're experiencing here is attributed to the fact that about six seven weeks ago the center for disease control put out a travel advisory to all americans essentially cautioning them about not going to 80 of the world stay out of china stay out of korea stay out of japan southeast asia oceania canada europe was beginning to open and it faltered in certain areas stay out of mexico right so when you have all those other competitive destinations that are shut down hawaii looms as this bright jewel in the pacific to the u.s market okay as the other world destinations begin to open and re-mobilize and global competition returns you're going to see i believe we're going to witness a stabilization of in a redistribution of where americans choose to go and where the international traveler chooses to go i will say that once japan lifts their travel restrictions we can expect a tremendous response from japan here but i see this stabilizing itself over the next four to six months and and not have this collision of markets um resulting in something that we cannot control you know the mayors on several islands actually all islands uh have talked about increasing user fees not for kamaina but for visitors you know we saw uh hanauma bay go to 25 ahead and they're talking about other places where there are natural sort of entry points some of our you know beaches and whatnot that just not possible but there are natural entry points to increase user fees for example uh mayor kawakami on kauai says that he doesn't necessarily want tourists camping that he would like to really jack up those prices so that that's really kamaina and kind of push the tourists to the hotels what are your thoughts on user fees on all the islands uh to kind of control some of this the flow of tourists if you will sure so you know what we have in common with all of the mayors um is they're all kama aina right and and and what i enjoy about all of them is they're unique to their island and they are an extension of their own community so there is a net as a command there is a natural tendency to want to protect not only your community but the natural settings that are there and and i do think that when visitors are impacting certain areas user fees are appropriate i think hanauma bay is looming as a uh an example uh hyena on kauai is another example and so i think when the user fee is optional so i as a visitor can choose to if i choose to go there i have knowledge that i have a fee to pay right i i think that that differs from when fees are uphold imposed uniformly where i as a traveler do not have the option i'm mandated to do it so i think you know i trust the fact that the mayors will make prudent decisions and and do what's best not only for their island but they all know how important tourism is to their islands community and that these kinds of fee uh when you start imposing fees you've got to be remain sensitive to what uh price sensitivity might be but but i have the confidence that these mirrors will be prudent in how they apply that another issue that has been spotlighted during this pandemic has been the lack of rental car availabilities and we're seeing uh some of those prices that tourists as well as kamaina are having to pay to rent the car because of that shortage there are some leaders in other counties who say they simply just don't want to see that influx of rental cars taking up space or really congesting some of the smaller roadways that we see especially on the neighbor islands what are your thoughts on the expansion of shuttles or hotel tour buses of that sort to help to cut back and minimize the rental cars on the roadways and if you can speak to just the overall shortage and if that is something that continues to concern you as visitors return to the islands sure so you know i think to underscore that that question i think we have to understand that in the last 15 16 months that we've all been dealing with this pandemic that businesses and an industry tourism has been injured okay well you cannot experience an economic collapse a market collapse a global pandemic and not in some way um be impacted adversely and injured right so the reopening of this is as much about healing our own businesses and allowing that time for it to recover rental cars right they had to make a tough business decision to to basically sell off their fleets because of the uncertainty that all of us were confronting 9 10 12 months ago so and then all of a sudden you take the rent-a-car problem goes all the way back to the manufacturers and unable to re restore the rent-a-car fleet on a timely basis in the meantime to make up that void hta has been involved with the counties and and the visitor bureau chapters to try and come up with solutions around motor coach shuttles you have an increase in ride-sharing uh activity and entrepreneurs who are now driving for one or both you know uber and lyft so i think you know out of this they're going to become alternatives but i'm also well aware that we live in a free enterprise system and businesses every rental car agency is going to have to make an individual assessment about what they believe um is the right thing for their car company right but there are going to be more opportunities and options available to visitors local and mainland and out of state uh going forward that i'm hopeful can offset the rental car traffic that we experienced back in 2019 there's a question here oh here we go from nani aloha says who is sensitive to the ratio of tourists or residents when is enough enough you know before the pandemic we were approaching over 10 million tourists a year throughout the islands is there a magic number that is appropriate for us uh you know as we talk about that tourism reset what should the target be in that regard you know the um the growth from 8 million to 10 million visitors came without one addition one net additional hotel room being available so where did those two million go right and in in some cases they ended up in illegal uh vacation rentals and i know and i'm encouraged by the the diligence with which each of our county mayors now sees that as part of the solution to re to take that illegal inventory away and in in a couple of weeks i believe mayor blangiardi uh in his uh department of permitting and planning will be introducing uh their approach to it so i won't jump the gun there but but getting that inventory out of the system is going to lead to a reduction in in visitor accommodations being available and i think that that is priority number one you know the the magic number let me tell you on every island i get asked can you cap the number of air seats into our island um and people are often disappointed to learn that embedded in the us constitution is the freedom of its citizens to be able to move interstate so the answer is that we cannot control that number okay all we can do is continue to discuss this priority with the airline executives um and see if we can collectively come to an agreement about how we can better manage the flow so that even during the valley periods where visitor traffic is not as intense that we can begin to move some of that into those valley areas but at the moment we do not have a magic number what we do know is that we do not have the systems in place we do not have the infrastructure in place we do not have a massive reservation system that can manage the flow of people to handle 10 million at the beginning of the show you talked about some of those cuts to your department one of the areas that you specifically mentioned was the cut to the hawaii convention center and the overall funding that's going to be happening in in that area how do you think that that cut in funding in that area will impact the ability for hawaii to host large conventions and its ability moving forward how important will that sector of that market of conventions be to the overall recovery you know to the credit of the legislature they preserved the convention center uh special enterprise fund okay so the special fund for the convention center uh is still in place and still uh functional for us so what that means is we are able to carry over savings from past years going forward so we will be adequately funded um for the convention center for the coming fiscal year and we are slowly beginning to ratchet up the um the marketing efforts because part of your question earlier had to do with the desired visitor the higher spender the lower impact visitor right and that conventions market meetings market is representative of that desired traveler typically not as many rana cars because they're moving as groups they're tied up in sessions here at the convention center so they're not out and about on a daily basis and and so we will continue to put our energy there but but in answer to your question going into fiscal 22 we are uh we will be fully allocated at the uh convention center and grateful for it frankly you know we're almost out of time but i want to circle back to something that ryan had mentioned which was this tension that we see between kamaina and the visitors how do we make it so you know one of the things we traffic in of course is aloha and that we need to make sure that our visitors you know enjoy their experience here but there are a lot of people who felt like the pandemic was this reset they got their beaches back they got their favorite hiking trails back and they don't necessarily want to go to where we seem to be going right now what do you say to those residents who just feel a little bit overwhelmed right now sure listen i got my beaches back i got my forest trails back so i understand the euphoria right back in january uh september standing on waikiki beach when it was empty so i understand that local sentiment very well and and i have the debates within my own family about this okay i will say this and i use this in describing the system of tourism okay imagine that the system of tourism not the people in it but the system is like the plumbing in your house okay you turn the plumbing off in your homes for 15 months when you turn that back on i wouldn't drink the first water okay and so we have to flush this system out completely allow it to heal allow it to build its capacity but to the point about uh the tension um i would just encourage our local people to um to take every opportunity to first educate the visitor okay on what appropriate responses what appropriate behavior is i would avoid violence and conflict okay and i would ultimately treat the visitor like you want to be treated now i know that in some cases okay especially when we're dealing with the american the u.s market you and i know that this is not the same america over the last three or four years america's become extremely fragmented by its politics by the pandemic simple whether we wear a mask or not wear a mask and this whole at its bread and attitude that is not conducive to proper behavior and that that segment concerns me more but i would just encourage our our local community to use every opportunity you have to try and educate the visitor because visitor education has become the primary mission at hta and it's non-stop and when you're dealing with changing human behavior um you know it's tough think about all the people that you know in your life who still smoke cigarettes right and and how long we've been trying to counsel that on a health basis so our work is cut off for us and and believe me i appreciate uh the community responding the way they have you know before we go i did want to just ask you one final question you know you've kind of just come into this role uh recently uh not even a year yet and as for someone like yourself as a native hawaiian and having to navigate this agency uh during this time when as we said there seems to be even more growing contention between local residents and that of the industry uh how do you balance that with just the principles and morals that you have been raised in being born and raised in these islands being a native hawaiian and having to lead in industry that means so much to the state yet there seems to be a lot of criticism and a lot of discussion over how it's managed you know um for all the reasons you just mentioned a year ago when i made the decision to become an applicant for this position uh my wife and i and and close family members went through the whole dissertation so i am exactly where i thought i would be um i knew that coming out of this would not be elegant would be tough um that that this this balancing act um is like unprecedented right but um i'm also encouraged by the fact that the different people i work with every week in different agencies different islands have one thing in common we all carrying command that want what's best for hawaii right and so to the degree that we can influence a shift in tourism which i'm inten on being a part of um you know i i knew that this would uh be this challenging and i wouldn't want to be any place else right now okay john the freeze thank you so much for joining us this morning against giving us an update on the landscape of tourism in our islands and the uh update on your agency that you manage we thank you so much for spending your time with us this morning we'll do this again because it's going to be exciting going into the fall we certainly are always welcome ryan very interesting to hear his thoughts on you know that analogy that he drew about the plumbing and that basically this is sort of a system reset and he's predicting really more of a stabilization that we're not going to see this continued climb that things are going to sort of calm down which i'm sure is reassuring for many people watching because they do feel a bit overwhelmed he said that he sympathizes and he understands those feelings one of the things that he highlighted was all the county mayor's plan to really crack down on illegal vacation rentals we've heard mayor blanchardi talk about a plan in the works that he plans to unveil soon he says to really do up enforcement of the illegal vacation crackdown so we'll see if that comes to pass and if it does we could see those numbers sort of shrink down pushing folks back into hotels and away from residential neighborhoods yeah and certainly interesting to hear his take on how the overall changes that were made uh during the legislative session uh and the legislation that has been passed that changes the funding mechanism for the hawaiian terrorism authority ultimately will impact the agency that he has been put in charge of also getting his thoughts on how the tat and the restructuring of that will be impacted to the county levels uh and interesting to hear that his prediction of saying that it could take up to two years to get this thing all organized and managed now that this mechanism for receiving and structuring the tit at the county level still needs to go through public debate and needs to go through all the necessary channels in that matter so that counties could be without that tad funding for maybe two years of course they're missing out on this year and so all of those things have to be taken into consideration when you're looking at the overall budget for each county and how that will be managed moving forward certainly something that the mayors as well as the aeg's office and state departments are looking into to see how they can maybe expedite that process but also how they manage that overall and also interesting to hear his take on when uh how he thinks things will uh ultimately be impacted here in the islands once traveled to those big asian markets reopened and how there may be more of a distribution overall right that the visitor market is not guaranteed because essentially they're being funneled here because they can't go anywhere else so that was interesting to hear um of course what affects all of this is the pandemic and the rise of the delta variant and the case counts here in the islands as those numbers go up of course that could threaten this industry and much more and so we are going to be talking with dr libby charr on friday about where the virus is about what she predicts for schools we know that school starts on august 3rd for most public schools some are back already but that's the sort of big opening day if you will and we're going to be talking to her about the delta variant about hospital capacity does she think that we need new restrictions you saw the president today saying that uh federal workers should be mandated to have vaccinations or testing so there's a lot going on when it comes to the pandemic and we'll be talking about all of that with her on friday looking forward to that conversation we thank you for being a part of today's conversation and we'll see you right back here on thursday at 10 30 for another edition of spotlight hawaii aloha that'll be friday you

2021-08-03 05:58

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