The Council for Native Hawaiian Advancement and Hawaii Visitors and Convention Bureau will each get deals worth tens of millions of dollars.

State officials awarded separate contacts — for tourism marketing and management — to organizations that had been fighting over what previously was to be a single contract. Now, instead of battling over one big pot of money, the Council for Native Hawaiian Advancement and Hawaii Visitors and Convention Bureau could each get its own multiyear deal worth $65.5 million in total.

In its statement released on Monday, the Hawaii Tourism Authority said a third player, VoX International, was awarded a $2.4 million contract “to educate Canadian visitors about traveling mindfully and respectfully” while in Hawaii.

Hawaii Tourism Authority officials on Monday declined to make public the winning proposals, including details of what the organizations will do to earn tens of millions of dollars over 2.5 years. The officials said documents including the details would be available after the procurement is completed.

Tourism in the state seems to be rebounding after the pandemic-lull with many visitors heading straight for Waikiki beaches to quench their thirst for sunshine. (David Croxford/Civil Beat/2023)

“Contract terms, conditions, and amounts are subject to final negotiations with HTA and the availability of funds,” the authority said in its announcement. “The state procurement process allows for a period of protest that will expire no later than June 14, after which contracts may be finalized.”

“For now, it is appropriate to reserve further comment until we have completed these active procurement processes,” said John DeFries, HTA’s chief executive.

These processes include getting approvals from executive agencies including the Department of Budget and Finance and Department of Business, Economic Development and Tourism, as well as Gov. Josh Green and legislative leaders, said Jimmy Tokioka, the DBEDT director. It’s an unusual process, a result of the Legislature cutting the HTA’s funding during the session.

Green has said he will use discretionary money to fund HTA. And Tokioka said he is confident the money will be there to pay for the contracts.

“One step at a time,” he said.

Mike McCartney Department of Business, Econimic development and tourism
The plan for Hawaii’s major tourism contracts follows a general compromise proposal initially floated by Mike McCartney, a former director of the Hawaii Department of Business, Economic Development and Tourism. (Screenshot/Senate Ways and Means Committee/2022)

The announcement marks the third time in more than a year that the authority has awarded contracts to market and manage tourism from the mainland. The previous two stalled amid protests by the two entities now picked to share the pot.

Initially, in December 2021, the Hawaii Visitors and Convention Bureau landed what was going to be a single tourism marketing and management contract. But after the Council for Native Hawaiian Advancement protested the award, the Hawaii Tourism Authority rescinded the contract and awarded it to the council. That led to a protest by the visitors and convention bureau.

Invoking Hawaii’s “Aloha Spirit” statute, state officials tried to satisfy both sides by splitting the single contract into two. But the plan, which was devised by then-Gov. David Ige’s economic development chief Mike McCartney, violated Hawaii procurement law. Officials could not simply divide a contract between two competing bidders by edict, even if it was in the spirit of the aloha law, state lawyers said. So in a parting act before leaving office, McCartney rescinded the contract again, this time cutting out CNHA.

For the latest procurement, the tourism authority issued two requests for proposals: one for destination stewardship, the other for brand management and marketing services in the United States, Hawaii’s largest tourist market. These requests for proposals followed the outline of McCartney’s plan. So did the contracts announced on Monday.

The Council for Native Hawaiian Advancement was awarded the destination stewardship conract, worth $27.1 million for the initial 2.5 year-term with an option for two one-year extensions. The Hawaii Visitors and Convention Bureau’s marketing contract is worth $38.4 million for the initial 2.5 year term, with an option for a two-year extension.

Both are scheduled to begin in late June.

Council Hopes Tourism Can Benefit Culture and Environment

For the council, the contract marks a major leap for an organization previously known primarily as a community development financial institution providing economic opportunities for Native Hawaiians. An opportunity to administer federal Covid-19 rent relief funds during the pandemic allowed the council to build capacity. Eventually the organization made a bid for the state’s U.S. tourism marketing contract, which the HVCB had held for more than a century.

Now, through its newly formed Kilohana division, the council will be in charge of programs designed to manage tourism so it can provide benefits for local businesses, culture and environmental and conservation organizations.

For example, the council also will take over management of the authority’s Aloha Aina program, which provides grants to environmental organizations such as The Nature Conservancy in Hawaii, the state Division of Forestry and Wildlife, Malama Pupukea-Waimea and the Molokai Land Trust.

The program in 2022 was managed by the Hawaii Community Foundation, which awarded grants worth $1.6 million to 31 organizations in 2022.

The council will also take over administration of the authority’s Kukulu Ola program, which provides grants for Native Hawaiian cultural activities and organizations. The authority awarded $1.5 million to support 30 community-based programs in 2022.

CNHA’s chief executive, Kuhio Lewis, said he does not expect a protest this time. Kilohana’s chief administrator, Tyler Iokepa Gomes, said the contract is the culmination of three years of work by CNHA. The goal, he said, to build bridges and spread tourism’s benefits widely in the community.

“Economic self-sufficiency is really a great way to empower the community and to see the benefits the industry can have,” he said.

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