The Hawaii Tourism Authority received requests for comment — the first step in a possible procurement protest — about awards it handed out this week for brand management and marketing of Hawaii in the United States and Canada.
HTA did not receive a request for a report on the $27.1 million multi-year award that was made to the Native Hawaiian Advancement Council on Monday. That contract could begin June 20 and is expected to last for an initial term of 2-1/2 years with the possibility of two one-year extensions. HTA’s first service management award will include post-arrival visitor education; administrative support for HTA community programs; technical assistance and capacity building for community organizations and businesses; and technologically enabled solutions for managing tourist hotspots.
However, HTA is applying for an American Branding and Marketing Award awarded Monday to the Hawaii Visitors and Convention Bureau for $38.4 million for an initial term of 2-1/2 years with an option to extend for two years. HVCB currently holds the US tourism contract and is the only contractor ever to have a contract for the state’s largest visitor source market, where visitors spent $16.2 billion in Hawaii in 2022, an average of $231 per visitor per day. HVCB’s new contract was expected to begin on June 22; however, it is unclear how the report request might affect the schedule.
The HTA also received a request for coverage of an award it made Monday to VoX International, which was already operating as Hawai’i Tourism Canada. VoX’s new contract, which was set to begin June 22, is worth $2.4 million for the first 2-1/2 years, with an option to extend for another two years. Canada is one of Hawaii’s most mature international markets. In 2022, Canadian visitors to Hawaii spent $928.2 million, an average of $188 per visitor per day.
The state procurement process allows for a protest period for these three awards that expires on June 14. HTA Chief Brand Officer Kalani Ka’ana’ana said now that the investigation has been requested, HTA has seven business days to comply and the bidder will have five business days after that to file a protest. Ka’ana’ana said the releases are usually requested as part of the procurement process because they allow bidders to see why their proposals were not selected. Debriefing does not necessarily lead to protests, he said.
It is unclear how the upcoming reports, which are subject to special state procedures, will proceed. U.S. procurement unrest has been ongoing since 2021 when procurement difficulties for a U.S. tourism contract pitted HVCB and CNHA against each other, creating discord that spilled over into the community and the highest levels of government and threatened the future of HTA.
HTA’s previous attempts to seek a US tourism contract drew sharp criticism from the state Legislature, where House Bill 1375, which sought to abolish or reform the agency, lived until House and Senate negotiators were unable to reach a consensus last week. days.
On December 2, 2021, HTA initially selected HVCB for the multi-million dollar US Tourism Award. Former Business Economic Development and Tourism Director Mike McCartney, who served as head of the HTA’s procurement agency, rescinded the 2021 contract award following an unresolved CNHA protest.
When HTA went into the second round of the request for proposals process in 2022, HVCB lost to CNHA and filed its own protest. McCartney tried to broker a deal between HVCB and CNHA, but that option was not approved by officials from the Office of State Procurement or the Attorney General’s Department. Ultimately, McCartney rescinded the CNHA’s award on his last day on the job, Dec. 5, citing “the best interest of the state” — the same reason he gave for the HVCB’s earlier dismissal.
The HTA also faced sharp criticism from some lawmakers and community members, who wanted a faster turnaround in managing the destination. The decision of the HTA board of directors on December 22 to extend the procurement is to some extent the result of this refusal. The board voted to solicit contractors for the US market and also approved a request for proposals to solicit destination management support services in all markets.
CNHA President and CEO Kuhio Lewis said in a statement Monday following the presentation of this historic HTA award:
“Today is the beginning of a new beginning. Although it has been a long journey, we are ready to go and focus on the future of Hawaii and its people,” Lewis said. “Our role is to bring together decades of expertise rooted in a shared vision for transformation in tourism, while ensuring that our tradition and culture are perpetuated and our community and culture at the center of all decisions.”
Lewis said Kilohana, CNHA’s tourism arm, looks forward to working with HTA, industry representatives and the community.
Jerry Gibson, president of the Hawaii Hotel Alliance, said, “In regards to the HVCB, CNHA contracts, we were quite happy to hear the results. Things are moving forward, and speaking with HVCB and CNHA, everyone is excited and ready to go.”
Gibson said he learned Thursday that there was an investigation into the procurement.
“I’m not sure what it is, but we certainly hope the process doesn’t hold back any progress from the destination management action plan process or the marketing process,” he said. “I’m not sure he’s going to delay it. Maybe they’re just simple questions and they have a right to ask them, but we just hope it doesn’t stop the process.”
Gibson said he and others are concerned about the continued uncertainty, especially given that the pace of summer travel is weaker compared to last summer.
Mufi Hannemann, president and CEO of the Hawaii Lodging & Tourism Association, said he hopes HTA will move quickly on an uncontested CNHA contract to manage the destination.
“We have to send a message that they’re moving forward, or people will think it’s a mess and we’re not going to get our act together,” Hanneman said. “The summer (tourism) is getting weaker, and all these delays haven’t helped, along with the uncertainty of where we are with our marketing. We need to develop this thing sooner rather than later.”
Keith Vieira, director of KV & Associates, Hospitality Consulting, said the challenge with any possible delays in marketing and branding, especially for the largest U.S. tourism market in Hawaii, is that previous delays have been made in lukewarm efforts to reach travelers in the last three years.
“At that time, Hawaiian travel wholesalers and Hawaii lost market share to other destinations,” Vieira said.
He added that when the pace of bookings slows, travel sellers market reactively with the goal of putting their heads on the bed instead of engaging in proactive marketing, which seeks to increase tourism through higher visitor spending rather than higher visitor arrivals.
“We should be marketing for the future. We shouldn’t be dealing with marketing for next week,” Vieira said.
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