 Aloha, I'm Marcia Joyner and we are navigating the journey today. What a journey this one is. My dear friend, and you know I only talk to dear friends, my dear friend Frank Haas is going to take us on a journey through tourism, which is the bed and butter of Hawaii. And it has been for who knows how long. And this is a dream and people always want to take this dream of a trip of a lifetime and if you watch any of the daytime shows and they give away a trip to Maui, everybody's just, oh I gotta go, I gotta go. And so we are going to talk to my dear friend, Frank Haas, about tourism and when is tourism too much and when and what is going on with tourism, how does that impact the rest of us that are not in the tourism business and there's just so much to tell. Thank you Frank. This is quite a journey. I love the theme, the journey theme. I don't know if I told you that I was one of the authors of a paper called charting a new course. It's a journey charting a new course for Hawaii tourism. So it has been a journey for tourism in Hawaii because the promotion of Hawaii goes back to 1903. There was a committee started by the Chamber of Commerce called the Hawaii Promotion Committee with $10,000. And here we are in 2019 with almost 10 million visitors, so a lot has changed. A lot has changed, yes, yes, so tell us about Frank. Well I've been involved in marketing and especially marketing and tourism for most of my career. I've worked on advertising and marketing programs for Hawaii, for Oahu, for airlines, for hotels, for hospitality companies, for restaurants. So I've seen those changes on a personal level and watched how it affects businesses and watched how those businesses affect communities. So I'm at a point now or in my life and career where I want to see how it should fit together. So we keep talking about this as an economic engine, but it's not just an economic engine. It affects everything that we do in Hawaii. So we have to pay attention to the economics, but we also have to pay attention to the impacts on our communities and what it does to our culture and our way of life. Last year before the election we interviewed 20 different candidates from all over the state, from little places that most of us don't hear about. And without exception, they talked about tourism and the impact on the infrastructure. One person told us on the Big Island it takes an hour for an ambulance to get to her community. Another one at Hanna, three hours on the road to Hanna. And all of this, the way it impacts on the state. So I'm back to you. How do we deal with, A, we need this tourism dollar and how do we survive, I guess is the right word, to keep it the impact on the infrastructure? Well, I have a word for you. How do we manage this? Great. Because I don't think we've done a good job in managing it, and for a long time that didn't matter. It was okay. We were growing. Everybody was happy. But when you get to the point where it's almost 10 million visitors, but it's not just the 10 million visitors, it's where they are. They're on the road to Hanna. They're on the road to Kapa. They're at Laniakea Beach. They're in places where there's not enough facilities for them or capacity for them. And they're not, they're getting in the way. They're intruding into residential areas. They're intruding into private areas. And that's where you have the conflict. I mean, the question that you asked is, how many visitors is too many visitors? And it really depends. Too many visitors at a specific site that isn't built for them is a real nightmare. We have places like the convention center, the hotels, where you can have thousands of visitors and that's fine. They're in Waikiki. They're at a resort. They're having fun. But they're not causing those traffic jams. They're not creating the problems that you described. Well, now many years ago, I guess it was in the 80s. I was at the corner of Calacaua and Lourdes. And this young man said to me, tourist, he said, where's the ocean? And I stopped and I turned around and all of these hotels, all of these, you can't find the ocean. There is no, like, ah, I was stunned, you know, like, where did it go, you know? And that was during that boom when everybody was building and building and everything. Well, Waikiki is what it is. And I think it's an object lesson for us on how not to do tourism. But because it is what it is, we now have to say, what do we do with it? How do we manage that? And tourism is a very complex industry and the solutions are very complex. Part of the solution in Waikiki is to find those people who really enjoy what Waikiki is. It's not my cup of tea when I go to a resort, but you can talk to the young person that you talk to in Calacaua and Lourdes was looking for the ocean. But if you look for somebody that's looking for shopping or nightlife or some of the other things that Waikiki has to offer, that's really fine. Well, now, Guam, Taipan, they kind of look like Hawaii did 50 years ago, except on their main street are all the same businesses that we have on Calacaua and in the same order. And shame on them, that's very bad marketing. Yes. And even the ABC store on every corner, it's like, this is amazing. Right. And they have a culture in Guam, they have a Chamorro culture. It's a perfectly wonderful, valid native culture. Why they felt they had to copy Hawaii is beyond me. And that's usually the sign of lazy marketing. They did that because Hawaii already had a good brand and they said, we'll just do that. It takes a little effort to really understand and position and communicate the culture that you have, the essence of the culture. We are moving in that direction in Hawaii. If you look at Hawaii 20 or 30 years ago, we had the tikis and we had the wiki-waki woos and we had all that stuff that was kind of the fake Hawaii. And I think you're seeing, it's not a transformation yet, but you're seeing more attention paid to authentic experiences, authentic Hawaiian culture, and that can't be copied. Right. Guam can copy the glitz, the cellophane skirts, the other stuff, they can't copy the real thing. Well, but it just surprised me when I saw that, because my thought is exactly what you're saying. These are Chamorros and then on Saipan also. And they have a distinct culture that is different. But the only thing, like I said, I was just surprised when, because they've got beautiful beaches and all of the same things, they have a different culture. And yet here are these swords. And we need to resist that sort of thinking in Hawaii. The issue of gaming always comes up, gambling, and you can gamble anywhere. I don't know why we would want to have that here. We have these shooting ranges in Kalakaua. I mean, why would we do that? It's a wonderful book on how to sustain a visitor industry. And the author of the book said, you know, a destination is headed for trouble when you see the first putt-putt golf. Can you have that anywhere? Oh, my. So we need to find those things that are inherently here, authentically here, and really communicate those values to our guests so that they come here and experience those things and not decide to come here just for the glitz. Yes. And I guess the biggest thing, we can see that when they're made in Hawaii is the festival and how, for that whole weekend, how people come from everywhere to buy the real... Yeah. And it's not just that. And when I said we're seeing the change, I was chairman of the Hawaii Book and Music Festival. That's a wonderful experience and I know you've been involved in it. But you get real people in Hawaii talking about real issues and real books about Hawaii and books about the place. The Ula Palakaua thing on Maui was another festival, a very local, very authentic. So we're seeing more of that because visitors are getting more sophisticated and they're looking for more of that. We just had to make that connection between those people who are looking for an authentic experience and the ability to give it to them. What do... But you keep track of everything. So what is the spending like that we are constantly after the spending and everybody says that's the big thing? What do we do with the spending? What are we looking for in spending? For many, many years, the whole focus was how many bodies are we getting here. And bodies create issues with, you know, congestion and intrusion into residential neighborhoods. So there's been a shift to say we really need to talk about the visitor spending. So I have a chart to take a look at what's been happening. And what you see here is a blue line, which is the number of visitors that have been coming to Hawaii annually. And it goes from 7.8 million, 7.9 million in 2012. Just last year we had almost 10 million visitors. So look at the slope of that line. It's increasing every year since the end of the Great Recession. The other line, the red line, is inflation-adjusted visitor spending. And it went from $15.7 billion in 2012 to about $17.6 billion last year. So that line is much, much flatter. So what's the reason for that? And if you go to the next slide, we can take a look at what people have been spending on an average day basis. The blue line is the same line, going from 7.8 million visitors to $9.7 million. But look what happened to spending and inflation-adjusted terms. It's actually declined. And why is that? Well, one of them is cell phones. People are able to find things that are free. They go off the beaten track. They go to Hayao. They go to beach parks. They go to places that they never could find before. Part of it is vacation rentals. They're staying in places in our neighborhoods, which is creating congestion and deloys and upset. Once again, because of technology. And so we need, we're at a point where we need to figure out how to give visitors an experience in a place that's suited for them, that can accommodate them. You think of some of the problems we had, and you named some of them Hana Highway, but La Niakea Beach on this island is a good example of that. Because there's a traffic jam there because people have used their cell phones to find out that there's turtles there. So how do we solve that problem? Well, it's partly technology, but part of it is steering visitors to other places. Well, now we need to take a break and we'll be back in 60 seconds. And then I want you to tell us about this technology, because everybody has the phones and everybody's tracking and tells you where you're going and all of this new technology. But let's talk about that when we come back. We'll be back in 60 seconds. The National Association of Abarbon Owners. Hawaii Energy. The Hawaii Energy Policy Forum. Hawaiian Electric Company. Integrated Security Technologies. Galen Ho of BAE Systems. Kamehameha Schools. MW Group. The Scheider Family Foundation. The Sydney Stern Memorial Trust. Volo Foundation. Yuriko J. Sugimura. Thanks so much to you all. Aloha. I'm Marcia and we're back. And we are navigating a journey that every one of us in Hawaii lives with. And that is tourism. From the earliest times that I can remember about tourism and watching it grow and grow and grow. And it used to be, you could tell who the tourists were. And if you remember in the 70s, I think, maybe later, there was a push and an ad campaign for everyone to greet the tourists with aloha. Do you remember that? There was a big push because it was saying, this is our bread and butter, and who they are, we need you to greet them with aloha. So here we are, and I still do it, everybody and everything, aloha. So, now we have gotten to that place. But that's old time tourism. What is the new tourism? How do we, what is that about? Well, first of all, I do want to talk about aloha first because people are frustrated with tourism. And if you're frustrated, you're not going to show a lot of aloha. Yes. So we need to fix these problems if we expect people to continue to interact with visitors with aloha. So those things are connected. Before the break we were talking about some of these problems, Hana Hayawe, Laniakea Beach, they're very complicated. And we really need a complex solution for these. Laniakea is a good example. The highway is all backed up because people are stopping to see the turtles. So what's the solution? Well, the solution really is the Department of Transportation somehow fixing the road. Moving the road, by the way, costs millions of dollars. The Department of Land, they could create a park where people could park or the city and county so that they'd have a place to help with a crossing there or control traffic. It could be the neighborhood itself deciding whether they want to promote that. So these are really complex issues. What's happened that has caused some of these problems is technology where people can find places like Laniakea Beach. One year, 30 years ago, you would drive past that beach. They never knew there were turtles there. And now everybody's posted those turtles on Instagram. There are probably more pictures of those turtles than there are for some celebrities. So that's part of the problem, but it's also part of the solution. If we use apps to tell people when there's less traffic there or to control access to some of those sites, we can try to control the crowds. We can use, in some of the museums, this is a different sort of issue, but overtourism isn't just a Hawaii problem. It's in the Louvre. You can't just go to the Louvre now. You have to make an appointment. You have to make a reservation because there's so much demand for it. We need to start looking at that and why. Charging access fees for some of these places and substantial access fees so that people who go there really want to go there and they're willing to pay money. There's all kinds of cool new technology. I was just speaking at a workshop called Smart Tourism in Indonesia, and they were talking about technology that helps inform people about the culture, inform people about safety, inform people about access. Just one example, there's a technology called Near Field Communications, and it senses there's a digital information board and I think it's Amsterdam. As you approach it, the sign is in Dutch. As you approach it, it says, oh, Marcia's approaching that she's got a smartphone, and we know from her smartphone that she speaks English, so it changes the sign from Dutch to English. It's that sort of technology application that I think we can help manage tourism. For example, Diamond Head Trail, mobbed, and it's not a great experience. If we advise people via technology that right now it's really crowded, why don't you go to Cocoa Head instead? There's nobody on Cocoa Head. That's a way of using technology to sort of manage the impact on some of these sites. Yes, especially the stairs that go up. But we also need to invest, and when I said the problems are complex, the solutions are not only complex, they're expensive. Moving the road at La Niaké is expensive. Monteville Falls, there's no parking there, there's no car facilities there, there's no bathrooms there. We either need to say we need to restrict access to that, or if we want to open it up to people, we need to invest the kind of money so that it's an enjoyable experience. It's not the Wild West. The scary thing about the technology, of course, is that it knows where you are at all times. Which can be a good thing, especially if you get hurt or get lost or something. There are two levels to that. One is the individual level. Marsha Joyner, I know her books you read, and I know what storage you go to. But on the general level, it can help us find the kinds of visitors that give us a good economic impact, but less congestion and things like that. Let me just give you a few examples. The honeymoon market. Those people stay in hotels, they stay in full service hotels, which creates a lot of employment. They're here for this very special trip. They're spending money on oceanfront, they're doing fine dining. They're doing expensive shows. Golfers stand resorts. They came here to golf, so they're not wandering around Kailua. They're at a golf resort, and they're buying alcohol. I know this, because I know some golfers, and they're spending money at the resort. We need to be very strategic about the kind of people that we're trying to attract, and big data and data analytics can help us find those people and understand exactly who those higher spenders are. So that you would then advertise to those people. Yes, and you can advertise very specifically to those people. My partner is a golfer, and in this scenario, you would get personalized messages, marketing messages, saying, you know, Monicaia Beach is having an event coming up. You ought to, here's a deal, and here's how you can get into it. And so it's micro-targeting. Micro-targeting. Well, I like that. I mean, I like the concept. Let me put it that way. But to answer your first question, we can have 9 million visitors or 10 million visitors if they're managed. So they're not all on Lottie K&P. They're not all in our residential neighborhoods. They're in places that are set up for them and can accommodate them. So that's what we need is another Waikiki then. Not necessarily. The neighbor islands are a good example of sensible development for a different kind of visitor. And even there, if we get more business travelers, they don't get in a car and wander around a lot. They stay in the hotel because it's a conference and they spend a lot of money. Yeah, and there are places that no one goes. I like Molokai, for instance. And I'm just saying that because you would need to be a farmer and be interested in that way of life because they don't have the facilities that cater to, like you said, the tourists that wander around. But even here on Oahu, I can tell you some sites that are underutilized and they're wonderful sites. There's a program here on Overtourism and I took the person that organized it. I took her around. And we went to the State Art Museum. They were the only people there. Hawaiian plantation villages. You can go there. Very few people there. There are these wonderful experiences. We need to promote those to the point where they're not overcrowded, too. But get people to see the things that are not necessarily the A-list, but the real authentic Hawaiian. And I remember, of course, with Turtle Bay that when they first built the hotel out there, and then everybody thought, oh, how wonderful to go out and enjoy being out there. Of course, there were no turtles. But the idea that that... And now everybody's all, it's too far, it's too this, it's too that, you know. They've been doing a pretty good job in my estimation of marketing. They're kind of positioning themselves as a neighbor island destination on Oahu. They have a golf resort, so it's pretty self-contained. I don't think the Turtle Bay guests very much get in a car and go to Waikiki or go to Mililani or wherever. They're just happy to be at Turtle Bay. When my children were little, we would get on the bus, the Turtle Island bus, go out to Turtle Bay, have lunch, get on the bus and complete the tour. Yeah, you can still do that. And that's very low impact. It is. It is. You don't have another car on the road, and it's inexpensive. And you have a very nice lunch at Turtle Bay, which is not inexpensive, so there you go. And then Disney, of course, is making a fortune there at Alani. Well, we're going to have to see about the need to charge access fees or restrict access to some of these places. And that's a very big shift for us. We've always been wide open. You go to the polylookout for no charge. Now there's a charge. Go to Hanaua Bay. There's no charge now. There's a charge for parking, and it's restricted. Once that parking lot is full, you can't go up there. Haleakala now. It was so crowded at sunrise that there's now a restricted number of permits that they give to go up there. And once those permits are given, they cut it off. Well, even Cocoa Head, going up there and for sunrise, you can see the people on their way up and Easter and things like that where people want to be there. And that's not one that's advertised, but people that know it. People find it on their smartphone. People that know it, you can see the flashlights. The first time I noticed it was, it scared me. One of those lights blinking and then I realized, oh, those are people walking up. Yeah. Even the places that are unsafe or forbidden, people still get on to the Haiku Stairs, to the stairway to heaven. So we need a better job of managing tourism, and part of that is enforcement. Part of that is access control, access fees. It's a new world with 9.7 million visitors. We simply can't operate like we did 20 or 30 years ago. So how do we... I know in your position, of course, but how do we get the tour operators? How do we get them to understand that there's more than just the same old thing? Well, they're not... they're not averse to this. You know, they want to be in a business that's long-term as well. So one thing to do is to have somebody like the Hawaii Tourism Authority use its bully pulpit to sit down with these guys and say, here's the new reality of Hawaii tourism. If you're going to do tours to Kailua, maybe you don't do them on the weekend when it's crowded, and I think tour operators would be receptive to that. Well, we are just about out of time, but you had another graphic. I was just showing the percentages, but there they are. Since 2012, visitor arrivals up 24%, spending is up half as much. So we're accelerating the number of visitors much faster than the total spending, and real visitor spending per day is actually declining. That's what we have to pay attention to. Okay. Well, thank you so much for being here. And you will come back, because this is a big topic, and there's so much more, that we're going to cover. Well, thanks for having me. It's a complex issue, so I'm sure there's lots to talk about. There's lots to talk about, and you will come back. Thank you. And we will see you. Hello.