How Diversifying the Economy Will Help the Tourism Industry

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The recent controversy involving the Lingle administration trip to Japan and the state auditor’s findings regarding the Hawaii Visitor and Convention Bureau (HVCB) makes it timely to review the relationship between economic diversification and tourism marketing. This issue came into clear focus when I read about the paltry $1 million that will be carved out of the transient accommodation tax (TAT) to fund critically needed repairs to Hawaii’s state parks.

The TAT generates more than $60 million per year that the Hawaii Tourism Authority uses to contract for marketing Hawaii as the ultimate tourist destination. If I were a first time tourist to Hawaii, attracted by one of a multitude of slick ad campaigns, I might feel like someone had pulled a huge bait and switch, especially after visiting any one of our famous beach parks. The Advertiser reports that more than $73 million dollars is needed to complete the “entire parks to-do list.” All it takes is a visit to a restroom at any beach park to confirm the sad state of our most precious natural attractions. Trash, cigarette butts and other debris abound along side roads and at other tourist stops around the islands. The maintenance crews are understaffed, state park spending is abysmally low and Hawaii’s image as a paradise is suffering with each new plane-load of tourists. We cannot afford to continue to bait people with promises of paradise and fail to deliver.


There is more to paradise however, than fabulous beach parks. Most of our tourism infrastructure is in dire need of improvement. For the last several years, as our tourism product has deteriorated, we have been doing little more than playing a zero sum game. Our marketing dollars barely maintain tourist visits from what they were 10 years ago. When something happens to reduce visitor counts like SARS or the war in Iraq, we just throw more marketing dollars at the problem with little impact. Some say visits are down because of the sorry state of our tourism “product.” We could spend more of the TAT on improving infrastructure, but this would not be a sustainable solution. Increasing tax revenues by stimulating the growth of Hawaii’s tech sectors, expanding successful local business models to global markets and investing in diversified agriculture will eventually provide the sustained funding needed to tackle that $73 million dollar parks to-do list and so much more.

A diversified economy with a vibrant tech sector is essential to preserving our environment and enhancing our tourism product. Instead of wasting millions of dollars every year reminding people what they already know about Hawaii, we need to be marketing Hawaii