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Airfare to Hawaii is too expensive for it to compete with major U.S. convention cities, but it could target a niche market of international associations to balance lulls in leisure travel.
Four firms are competing to operate the state-owned Hawaii Convention Center with the aim of boosting business at the 15-year-old facility.
SMG Hawaii, which has managed the $350 million center since before its 1998 opening, is among four groups that submitted proposals to the tourism authority by the May 21 deadline. HTA officials refused to release the names of the other three until after the contract is awarded in July, according to the Honolulu Star-Advertiser.
The five-year contract will run from Jan. 1, 2014, through Dec. 31, 2018.
Part of the problem is increased competition since the convention center was built.
“A lot of meeting space has been added to the U.S. market in that time, so we have to take a look at how we can enhance the use of the center and take it to the next level,” Hawaii Tourism Authority President and CEO Mike McCartney said.
While the center has won many facility awards and an A-plus review from Asia-Pacific Economic Cooperation organizers in 2011, it has struggled to reach targets. Since 2002 the center just once met its annual goal of 700,000 room nights. That was in 2005 when it generated 706,489 room nights. Last year, 356,515 room nights were attributed to the center.
While the center has generated an average of $540 million in visitor spending annually over 10 years, the return to the state treasury has been disappointing. For every tax dollar spent on the center, only $1.40 in tax revenue has been generated.
Convention center interim General Manager Randy Tanaka said SMG Hawaii, whose contract with HTA expires Dec. 31, is well suited to continue in its role.
“We are seasoned in this game,” said Tanaka, who also served as chief operating officer for the APEC Hawaii Host Committee, which coordinated the 2011 conference that brought President Barack Obama and leaders from more than 20 nations to the state.
“If you look at our track record and our customer response and sensitivity to the culture and the aspirations of this marketplace, we have done an outstanding job.”
SMG Hawaii is part of Philadelphia-based SMG.
McCartney said a fresh look should be given to how the center can be used more effectively.
“In the next few years, I’d like to see our overall meetings, conventions and incentives business grow to 10 percent and our visitor spending grow to around $1 billion,” McCartney said.
One aim is to boost business travel, which accounted for just 5 percent of Hawaii’s visitor arrivals. Industry leaders would like to see that percentage double.
“I think we have to try new marketing strategies,” Hawaii Tourism Authority board member Rick Fried said.
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