 Aloha. Aloha and welcome to Think Tech Hawaii. This show is The State of Hawaii and I'm your host Stephanie Stoll Dalton. The state show presents Hawaii's newsworthy topics and current issues through conversation with guests whose expertise and insight presents viewers with information often beyond other media's resources. So stay tuned to The State of the State, Think Tech Hawaii. Our topic today is Hawaii's economic comeback after the pandemic and focusing especially on the business of tourism, Hawaii's tourism. As you may have heard it is reported that in 2019 pre-COVID the Hawaii visitor count peaked at 10 million arrivals. Then the pandemic came, shut down the state for a year only to reopen not too long ago in 2021 to ever higher levels of travelers arriving. So it is the case they say in the media that tourism in Hawaii is back to pre-pandemic levels. So to talk about Hawaii's options for absorbing or managing the tourism and what it is that are the current approaches to it we are lucky to have today's show guest who is Professor Colin Moore who directs the University of Hawaii's public policy center. He returns to the show to talk about more in-depth Hawaii's path to recover its economy after the pandemic based on findings from his recent UH public policy center sponsored survey on the Hawaii visitor industry. The Dr. Moore survey findings are recent and relatively rare for soliciting local resident attitudes towards tourism. So he's going to explain to us how the findings are useful for facing the dilemma Hawaii has with managing its tourism and being able to gain from it as it needs to without exploiting our resources and damaging our precious space. So he can explain about the findings are useful then for state, city, and county policymakers and legislatures for being able to preserve our state and the beauty of our state, the culture of our state, and of course to support the business of tourism. So welcome Professor Colin Moore. Thanks Stephanie, happy to be back. Good to see you. Mahalo for joining us today. So I wanted to just start out by asking you know how did you decide to do the study? Why did you decide to convert the study? What was the impetus for this? Sure, well I worked on this survey with John Knox who really has done most of the surveys around Hawaii tourism. He designed a lot of the HTA surveys. So John and I had been talking for a while and there is a classic question on the HTA survey that basically tries to get a sense of how supportive folks are of tourism and the negatives have been going up for some time really pre-pandemic they started going up and of course you mentioned in 2019 we had 10 million visitor arrivals which is the most we've ever had and so as a result more and more people were feeling negatively about tourism and then the pandemic hit and as a result of that there was a bit of a break. People got to go to beaches and parks and trails that were not overcrowded and so at the time there were a lot of different proposals saying essentially when tourism comes back we need to have a plan in place to manage it better so it works better for more people because if it's really not working for the people of Hawaii even if it is our primary industry then there's a pretty serious problem both for the industry and of course for our state's residents. So there were a huge number of proposals put out to try to reform tourism. I actually don't think we probably could have done better as a state in trying to figure out ways to implement them so they'd be ready as tourism comes back. We really didn't do a whole lot of that but as tourism comes back there's still a lot of political will to implement those so maybe I could just walk through some of the top level survey findings and then we could talk in more detail. Now that sounds really good. I wanted to know about how important it is that this survey coming out of the public policy center. That's a great question. This is the first non-government funded or non-industry funded survey that I can remember certainly within the last decade and so all of these questions were developed by me and John. We sent them out for comment from industry folks to the HTA a variety of other people but John and I made the final decisions on everything. We weren't compensated by anybody and this was funded purely out of a benefactors gift to the public policy center so this is an entirely independent survey. That's very interesting and so then with your decision to question Hawaii residents on their attitudes and opinions about your topics and questions in the survey why did you see those findings to be central to this survey's work? Which findings? Why is it that the residents using local residents attitudes and opinions versus the government or the academics or the experts? Sure. At the end of the day if residents questions and concerns really should translate into public policy that's how democracy is supposed to work and I think people in Hawaii have very nuanced and sophisticated ideas about the tourism industry because they are umbarded by it and we know that there's been a lot of change in attitudes as the way people visit Hawaii has changed and particularly this is due to the rise of Airbnb's. A lot of people don't realize we really haven't built any new hotel rooms or resorts in this state in a very long time. The increase in tourism above about eight million is largely due to this new way of visiting which is through Airbnb's and those have been highly controversial because you see tourists in areas where they haven't been before in local neighborhoods in beaches on trails that were formally used primarily by locals. It's changed a little bit too through the internet. There's easy ways through social media to find access points and to discover trails and beaches that folks didn't know about before. Well I think that's very interesting also that that is the case we seem to be getting high-end condos by the dozens going up but not more hotels and hotel rooms okay great well why I wanted to know if the basic tension here that we face in the state and then we can go on with the survey findings but it's about we can't keep having people coming in at the 10 million level per year and it's just going to go up from there as long I guess as united and American they're nice and get them in here but and then and we can't reap those we want to reap those benefits but it has to be in balance with the people and the environmental situation so isn't that the the balance that we're trying to get at here? Exactly I mean we the revenue is necessary for the state I think there are some questions about if we've been capturing as much as of that revenue as we could trying to balance your right the overcrowding of the impact on natural resources and some people would argue that we just need to build the right infrastructure that we need to manage it better it's not actually about absolute numbers it's just about trying to manage tourism better you know that might mean giving the HTA actually more power this is the the Hawaii Tourism Authority so I think that's the debate and everyone understands that tourism is likely to be our major industry for the foreseeable future it you know there's always a move and I'm very much in favor of diversifying our economy but but tourism is always going to be a big part of our economy and so I think getting it right and having a conversation a serious one about how we can address some resident concerns is important to maintain the the beauty of the state and also important I think for the industry I think the industry understands that if they lose the support of the residents they also will lose something you know one of the best aspects of visiting Hawaii which is this sense of aloha if you if you lose that you know then this will be a very very different destination to visit I just noticed that of course you might get to this later but you mentioned the the recovery and and the diversification and I know you might get to it we can come back to it later but that actually there's a preference for diversification over tourism recovery but anyway I'll just I get it's in your bullets so it was kind of stunning but I mean it may be important to talk about later it sure is I mean people people want the state to focus you know they say equally on tourism recovery and diversity but some 37 percent said they really want to focus on diversification and only 10 percent want to focus on tourism recovery so I think this just goes to show that that people are are a little frustrated that that and they feel a little stuck that this is our primary industry now tourism isn't a bad industry and I'm certainly not against tourism it provides in Hawaii at least very good union jobs and hotels you know it's as industries go it's it's better than a lot of alternatives I mean you know people may recall that the number one industry in Hawaii for much of its history was in fact agriculture that tourism was brought in to be a second industry that then ended up overtaking agriculture today so I don't think actually people are against tourism but they are interested in expanding beyond that and maybe I can I can show some of the slides yes let's do that Colin so the first slide you're looking at is is one that's about the values and principles because there's been a lot of talk about what you know what what values and principles should really govern the state's approach to tourism and we asked well what should be this is just a sample of questions I should mention that if anyone is watching this who would like to see the full survey report which is about 90 pages you can go on the UH public policy website but you can see here at the top a lot of these top line results so this is if it's the first or the first or the second most important governing principle it's about these ideas around resilient tourism that in fact there should be ways through tourism to actually improve our natural and cultural resources there's a lot of support for using this to invest in native Hawaiian culture to invest in ways to protect our natural resources actually much lower than that our concerns about competition so you can see you know what folks are thinking of they're thinking mainly of jobs and using getting respectful tourists and tourists that are interested in contributing to our natural and cultural resources we can go to the next slide so we were also interested in whether or not people wanted to actually limit tourism or if they could if they were in favor of finding creative solutions now when this was covered by the newspaper you know the headline was that 52% of people would like to actually limit the number of tourists visiting the state but when you give them a choice and you say well if do you really want to limit the number of visitors or you just want to manage crowded places better a majority say they want to manage crowded places better and this is important because of course constitutionally we really can't limit the number of visitors but it also demonstrates that people really don't have a problem with the absolute number of visitors if they're staying in the designated resort areas like Waikiki and if they're going other places then they're interested in managing those overcrowded places and we've already started this you know Haina on kawaii there is a new reservation system the state is experimenting with reservation systems dynamic primate pricing systems and this is where we think the focus really should be for the industry and for the state because there's a lot of options there to manage the most crowded places better we can go to the next slide well could you just give an example of that how that works calling sure so I mean one very simple way like they have started doing out in Hinama Bay is to require reservations for visitors so first the visitors get a more pleasant experience those destinations are not overcrowded and overrun and you could actually link that up to what is sometimes called dynamic pricing so as the demand goes up the price for that particular visit goes up you know and that money can be reinvested into the site it can be reinvested into the neighborhoods around that particular destination the downside as it does sometimes make Hawaii a more expensive destination that's what some folks in the industry are worried about you know it does limit your access I mean when you're saying we're only going to let 5000 people into this site every day it does mean that there's a lot of people who are going to be turned away who will have to make reservations ahead of time but to be frank that's not unusual in any crowded tourist destination you have to do the same thing in much of western Europe and a lot of these ideas come from the most crowded places in western Europe I think our our fear is that we don't want Hawaii to end up like some of the most overcrowded tourism destinations where it becomes so overwhelmed that it's unpleasant for the residents and unpleasant for the visitors now does that mean we're learning about that new word destination management organization I saw some you will you will often hear that term DMO destination management organization in Hawaii that's our hta in a lot of weird ways Hawaii actually was a leader on this years ago and and things really you know sort of stagnated in terms of remaining a leader but we can we can do that again with the hta and maybe giving the hta even more power but they have begun to change their thinking about this along the lines of a lot of areas that are are subject to over tourism where they don't think of themselves as a marketing agency as much as this destination management agency that's supposed to balance the needs of visitors of course marketing is a part of that but also to use tourism revenues to reinvest in the community great and also by the way hta is the hawaii tourism authority yes yes yes it's been around a long time and maybe needs to get up the game here towards this management and if they are funded for that okay is that with the state or the county and city the hta is a state agency the legislature has done some unusual things in the last session but although it governor e gave right before we got on this call announced that he was probably going to veto that bill but the hta has been funded through the tat tax the transient accommodations tax better known as the hotel tax so they were a unique state agency because they had their own dedicated revenue streams and they could do some unusual things around procurement this was this was a way for them to engage in the sort of private contracting for marketing that's much harder for traditional state agencies to do and like i said hta was for a long time focused on marketing this was a criticism the legislature has been giving it in recent years but they have evolved over the last few years pretty dramatically to be more concerned with trying to fund cultural programs through grants i'm trying to take a holistic destination management approach um so if anyone out there is is wondering the hta isn't just a marketing agency anymore that is still where a fairly large percentage of their revenue goes but they do a lot of other things too and they're they're moving strongly in that direction okay just one more question about that um you i believe uh in the report it said that one move had been for the led or the legislature was thinking to reduce their funding from the state is that because they feel with the tangent with the tat tax that they have their own resources and don't need to be funded by the state well no so the bill is very complicated around that involves a lot of politics so their funding was dramatically reduced it wasn't theory replaced with federal money um from the recovery act um but a lot of this was also due frankly to punish them uh for as the legislature feels for maintaining marketing contracts that were unnecessary during the pandemic for not recruiting the right sorts of tourists i think there's been a lot of pressure on them to try to create high to try to recruit high-end tourists as opposed to just more tourists so at the root of this really is a political fight and my concern is that the legislature in its effort to punish the hta in various ways will leave us with no agency to manage tourism and that's the worst of all possible worlds okay because as you said this is the one that it is on on that detract to focus on the destination management and they are the appropriate body to do that so want that they need legs for that exactly all right but uh yeah okay um that's very interesting to know the bat a little bit of the political background here because that's important too so we wanted to get a sense of how people feel philosophically about this and so we asked them to tourism be controlled or regulated more than other businesses and you can see here a lot of people think it needs to be controlled more and then you can move to the next slide um and whether it should be helped or supported more than other businesses and you actually see that people don't believe it needs extra help uh next slide and so we tried in this way to categorize all of our respondents into one of four categories and you can see about a quarter what we would call the the laissez faire group who really want to say the market should determine everything don't help tourism more but don't control it more only nine percent are what i would term as tourism proponents people who think the industry should be helped more but it shouldn't be controlled more it shouldn't face more regulations or or management the the the plurality here is what we call tourism regulators people who want it to be controlled more but not necessarily helped more and then there's another quarter that we call deep involvement people who want it to be controlled more um and helped more but overall the vast majority of people want the state to be directly involved in managing tourism and managing is a little bit different than regulating it managing means um you know creating the state programs to try to control these overcrowded areas um you know it's working with the industry not just telling it you can't do this you can't do that trying to recognize that this is a collaborative effort because it's so essential to the state's economy um you can go to the next slide and then we asked this question you'll often hear this term a green fee this is something that's been implemented in a lot of tourism destinations particularly in the Caribbean and it would be an extra fee that could be applied to rental cars or on to the hotel um that would then go to reinvest in natural resources or perhaps um cultural activities and you can see there's a lot of support for this only 18 percent say no i don't want any sort of green fee um you know some are interested in how much it would be but there's still a lot of interest in in having this fee that would be invested directly back into probably um natural resource preservation but cultural preservation as well uh next slide um and one one other interesting finding that i want to point out this is a more subtle finding we asked our respondents if their jobs or their family's jobs depended on the industry and you can see here that 52 percent of people whose jobs depended on the tourism industry favored a green fee and so this is all to say that we have to be really careful we have to separate the opinions of the people who work for the industry um who also see the problems the industry creates from the tourism industry itself and in fact those folks who work for the industry are very in favor of some of these creative solutions to uh to tourism overcrowding and then one more slide and this was a question we asked about the hta um and i want to highlight this because you can see that only nine percent of respondents wanted to eliminate the hta in other words they're open to changes for the hta and some actually think the plurality here 35 percent that it should be given more authority um but almost nobody wants no agency to manage our tourism industry in Hawaii they don't want uh an agency to manage it no they do almost nobody thinks we don't need anything right right okay and so you mentioned the caribbean influencing um the notion of green fees right so um they do that there so what about the other states that are similar to who i like like da florida and last are they are they doing these or do they have the same kind of problem we do well they they have problems around areas i mean hawaii is a little bit unique and the number of visitors um and how small we are and how concentrated it is um you know i think in other places this tends to be more also of a city or county issue or around particular sites so um you know there are um there are fees of well integrated systems for example in south florida where you buy a pass and you can visit a lot of sites in south florida um alaska does some of this it's a little more difficult in parts of the united states than in other sovereign nations because we can't just say well on entrance you have to pay this particular fee or tax we have to be a little more creative um but as a state hawaii is a little bit unique in um how small we are how many visitors we have and how much our economy depends on tourism so um this has been like i said um you know mainly experimented not at the state level but at the county or city level in other places well what would you say is the sweet spot we're going for i mean obviously we're not going to ignore it right or absorb it that and that is an option but uh that's what we've been doing well it's yeah and the problem with that is that you're going to create a situation where people are just hostile to tourism tourists and the industry and that's not what we want i think the sweet spot is to find ways to directly manage these overcrowded areas to make them work better for the community and that's not about just an arbitrary limit um you know it's about trying to figure out how many people we can accommodate and if we can't then managing these sites better building the infrastructure to accommodate them in particular areas and i think a part of this is cracking down on the on the VRBOs on on air bnb on on um on that particular industry and increasing the regulation that is where a lot of this resident frustration comes from that's not to say that these folks who haven't invested in the community that's not to say that there haven't even been economic benefits from that um but it is contrary to to the will of our respondents here and i think generally the will of residents and so you know that may mean that we build more resorts um that's not necessarily the end of the world i mean that's something i feel pretty strongly about um we can't just be anti development um we can't be anti resort development because people will find a way to visit and you know what i think one of the brilliant moves the state made decades ago when it developed Waikiki was to say we're going to concentrate tourism here um and you know this will give some space to residents that will protect uh you know will protect um undeveloped land and i think that you know in many ways is the approach we need to consider so it may mean build allowing more resorts to be built at the same time you crack down on air bnb i see that that um i had that number of uh 2018 the the vacation rentals had gotten up to about 23 000 and i might probably mainly on oahu but probably on other islands too right on other islands too and i should mention that there is a lot more frustration on the neighbor islands than oahu um that's another thing our survey showed now we um hawaii island hawaii people feel tourism even more directly than they do on a walk well you know in the big island the they seem to have you know taken that one coast and just put resort after resort you know whole land after another um and i guess we've been anti that but the attitudes uh i mean the benefits and advantages of that are clearer now than what's happening to us because of these individual um vacation rentals and i saw that you did say um in the report that um that one possible even though you're saying it's indirect and complicated a way to actually totally control visitor numbers i mean it's a pretty strong statement about uh doing something about the the permits for resort lodging and hotel accommodation really making that a requirement of coming into hawaii um i think and there was a 76 positive response for that which you may have said but we went through it pretty fast i was pretty surprised at that but now that you've kind of clarified what the impact has been that's uh problem that that could be helped no um well well what about that figure though about more resort resorts who do people actually think about resorts did they answer that question on the survey actually more we didn't we didn't ask them about that trade-off i mean i think if we did a subsequent survey that that would be an interesting thing to explore i think that you know i think the hope is that um we can now have more tourism we'll just have higher end tourists who spend more money that you know that's great i'm not sure how possible that is um i mean i think that um you know i think that in designated areas for tourism and for resorts like olina there's nothing really wrong with with building more resorts those are those are good jobs and you know i i appreciate you having me on the program to talk about the survey i'm really very pleased that you you're willing to do it because it's so interesting and the viewers need to know about these kind of surprising findings um when do you think um we might get some effect uh what do you expect to happen next uh is this going to be influential for um the um legislature i mean given that it's uh local residents i would think that the voters opinions would have some import do you think i hope so we got a lot of interest from the legislature on this report so i'm sure it is everyone knows that sentiment is turned against the industry but i think the legislature needs to understand that that doesn't mean uh you know we'll just abandon the hta in some cases it means we need a better hta a stronger hta that can help really implement these new destination management approaches well you've gone a long way here to help this out help our leaders and policy makers get smart about this so let's see what happens it'd be uh interesting to check back in in a while all right that yeah so it's a loa time and we'll have to wrap up so um i'm stephanie still dalton and this is the state of the state of hawaii show and we've been talking remotely with uh dr collin more uh director of the center for public policy at uh manoa so i'll see you again in two weeks um on the next program state of the state and mahalo to dr more for all the information and uh and for your attention everybody aloha