 And welcome to Hospitality of Hawaii. My name is John Kanching. I'm your volunteer host for a bi-weekly show live streaming on DinkTechHawaii.com, where I have the privilege to talk with industry leaders and other businesses that are related to our very, very important visitor industry. Our guest today, as you may have seen the tagline is Hawaiian Airlines, Innovative and Trustworthy. I'd like to introduce my guest. He's a very well-respected professional in the field. His name is Avi Manis, he's the Senior Vice President of Marketing for Hawaiian Air. But before I bring Avi on, I'd like to tell a little bit about my experience with him. I guess now over the last eight or so years, when I first met Avi, I was with another company. Actually it was Hilton Properties in Hawaii. And we had a number of meetings with Avi and the team as they were finalizing their routes and their promotions and their marketing as they were opening up China, Japan and some of the other domestic routes. And through the years, Avi has continued to do extremely well with Hawaiian Airlines, increasing his areas of responsibility. And so it is a privilege to welcome Avi Manis, Senior Vice President of Marketing of Hawaiian Air. Welcome Avi. Hello John, thank you for having me. And it's great to see you. Great, great, great to see you again. And it's been too long. And maybe we can start by you sharing with the audience some of your background, coming from maybe where you came from before coming to Hawaiian Airlines and how your areas of responsibility has progressed to where we are now, eight, 10 years later. Sure. So I came to Hawaii and Hawaiian Airlines from New York where I had been a management consultant working with a number of companies on questions of strategy and growth and came to Hawaii and to Hawaiian now almost 15 years ago, in 2007. So it's been a long journey and I've done a number of roles at Hawaiian on the commercial side, including pricing and scheduling and revenue and most recently, marketing and brand and product and a number of other areas including loyalty as well. Great, great, thank you for that Avi. Now, we have a lot of different things that we want to talk to you about but maybe let me kind of set the stage and obviously we don't want to dwell in the past because the purpose of the discussions is not to really talk about the past but look at the present and into the future but being that 2019 and 20 were just an unbelievable time period for all of us in the industry and not just obviously the visitor and airline related industries but for so many other industries that are connected to what we do. I mean, we saw business start to slow down at the end of 19 as more information about the COVID came around and then it really started to, people started to get really concerned about in January, February and then obviously the bottom fell out in March when it was declared a pandemic and I know from the Hawaiian airline standpoint and all your other fellow carriers there was a lot of reduction in routes then hotels just started closing up one by one by one by one and maybe you can talk a little bit about that with some of the thoughts that were going through your leadership teams at Hawaiian Airlines and maybe the airline industry as you started to see the softness in 19 and then into the full blown pandemic in the spring of 2020. Yeah, well, we were coming off what had been a really great year for Hawaii tourism in terms of overall volumes and visitor numbers and revenue and so the airline was in a very good place and I think it came relatively suddenly when you think about it in retrospect and I think we all remember where we were in late February and early March as it became clear that we were going to have to shut down first parts of our network and then really looking up to the entire network as a whole we knew that we were going to have to continue operating and providing essential air service both within the islands of Hawaii where it's obviously part of the lifeblood of the community but also keeping us connected with both cargo and passengers to the places on the mainland and in Asia that we serve and so then the question was how do we do that safely and it was a period of time in which our understanding of COVID was evolving very rapidly and we were constantly having to change our safety protocols it was incredibly important that we keep our guests and our employees and our community safe while providing essential air service and I have to give just extraordinary credit to all of the employees of Hawaiian Airlines who at a time when we were all thinking about what this meant for us and our families and our jobs were out there every day working in very rapidly changing conditions whether we're talking about flight attendants or cargo folks or the mechanics who were maintaining a fleet that was for the first time largely parked on the ground everyone did a really extraordinary job under very uncertain circumstances. Yeah, I mean it was actually really interesting from the hospitality side of it seeing all the different things that the airline companies were going through and you have to say, I mean the airlines seem to be leading the charge with safety protocols whether you know all the different spring and the airplanes, the inspection and the review of the air filtration system and so forth and it was great to see that. One of those things where it was really one of the examples of what a great community this is because we were all learning from each other and I remember being on the phone with my counterparts at hotels and we were all asking each other questions and the airlines who are incredibly competitive commercially and I think the hotels are the same way we all got together and figured it out because safety is an area where we don't compete safety is an area where we all collaborate and so there was a great huge amount especially in those early days of collaboration between all of the constituents in the visitor community and between competitors as well. So fast forward to now, right? Now we're pretty much a year from what happened when the worst started happening and through that time, I mean everyone saw images of airline cleaning crew, cabin crews in full hazmat suits and with those big spray guns and spraying everything different carriers took a third seat empty or every other seat empty policy and no flight would be more than X percent. Fast forward now a year later where do we stand now with your company relative to the safety protocols and your booking guidelines? Yeah, so we've learned so much over the course of the pandemic about the disease and how it functions. So there's a lot that we're still doing and some things that we're not doing anymore. We're still very, very focused on cleanliness because we know that that is important to our guests. So surface cleaning, the electrostatic spraying even though the evidence is increasingly showing that there's not a huge risk of transmission from surfaces still very important to the overall experience that cleanliness be our focus. So there's a lot of focus on that mask wearing and adherence to mask wearing. We know now is one of the primary things that we can do to ensure that the aircraft cabin environment which is already very safe stays even safer. And so really making sure that we equip all of our frontline employees with the tools to enforce our mask wearing policy is something that's very important. And I think here to stay for a period of time. Fortunately, the most important thing as it turns out to making air travel safe was something that was already there, which as you mentioned are the air filtration and circulation systems on an airline which really make it one of the on an airplane which really make it one of the safest indoor spaces I think you could have been in during COVID. So very stringent measures are still in place. And now a lot of focus on how we make this process easier for travelers. So how do we take the requirements around testing vaccination to the extent that vaccination is going to be an option and make the information available to travelers so they know how to do the right thing and then make access to things like testing as easy and as affordable as we can so that people do the right thing more often. You know that when the State of Hawaii started their safe travel program which I believe was effective October 15th of last year that must have required a tremendous amount of coordination through all the stations across the country, Hawaiian air stations as well as Honolulu, right? Can you talk a little bit about that and how that progressed over the last maybe now eight, 10 months? Yeah, so we worked very closely with the State and the other airlines to try to make sure that on day one it was as good a process as it could be and I think there's still a lot we can do to improve the overall experience but there were a couple of things that were really important. First was making sure we got the right information to travelers. There'd been so much confusing coverage in the media and changes over time and different counties policies that it was important that we got people the right information so that they knew what they were supposed to do. That was sort of the first thing. Then it was really important to us to ensure that people had access to testing. When this started, if you think back, we were still having big surges on the mainland. There was a lot of medically necessary testing that was going on and so it was incredibly important to us that we find ways to make testing available to consumers that wasn't competing with medically necessary testing and so we partnered with different labs to do that. We built out over the course of the last couple of months, I think we now have somewhere between 10 and 15 dedicated testing sites on the mainland for our guests that we've started up to make sure that there was access to testing but also that we were trying to compete in that marketplace and drive down the cost of testing as well because we know that's a barrier to travel. And then the last thing was just working with the state to make sure that the arrival experience in the airports was as good as it could possibly be when you're removing a large volume of people through a space like an airport that wasn't designed for arrival screening and so the state had to do a lot of work to adapt to that and we wanted to help out as much as we could. Great, so obviously I'm not saying this only because I've got you as a guest, you know, Hawaiian Airlines has been serving, you know, the customers coming in, the residents of Hawaii and employing Hawaii residents since 1929, right? And I think I read somewhere where Hawaiian Air celebrated its 92nd year in service early this January so that's amazing. But, you know, as I put in the tagline for the show it was Hawaiian Airlines, innovated and trusted. And as a sales and marketing professional, you know, I know how important it is to, you know, be consistent, be consistent with your message, over communicate, especially during these times which are unprecedented. And I had to say just from my own personal standpoint as a Hawaiian Miles member for many years, Hawaiian Air has been amazing. I mean, not just a consistency of what you're doing, but I think what was important, right? When people, flights were being canceled, it was important that the airlines come out and state their policy right up front, right, what you were gonna do so that people said, hey, you know, I'm not gonna be afraid that I'm gonna lose my money, I'll at least have the credit or whatever the case might be. Can you talk a little bit about your marketing communication? You know, maybe some of the discussions you guys had from an executive leadership standpoint, what your messaging was gonna be during that time. And now, currently, you know, I've always applauded Hawaiian Airlines for their consistent marketing messages about the new routes, about special fares, about added services. And I'd like to hear some of your thoughts about that. Sure, thanks. And we have a terrific marketing and communications team here. And one of the things I would say is over the course of the last year, we've had to continually adapt what we do to the circumstances. But in retrospect, the team put together a plan in April that covered a bunch of stages. And we really put ourselves in the shoes of a traveler and asked what information was most important. So initially, as you rightly pointed out, the most important thing was just really tactical information. What am I gonna do about this booking that I need to change? It was a period of time when you'll recall both hotels and airlines had a really hard time getting enough people to answer the phones because there was this surge of demand for changes. And so how do we support our guests with the information they need right now? After that, there was a period of time where things quieted down a little bit. And we knew that people weren't really, it wasn't okay for people to travel at that point. We weren't really welcoming folks back yet, but we wanted them to feel some connection to Hawaii and to the brand. And if you had someone who had to cancel their trip in March, like what could we do on social media or email with content and video that would give people away, especially when people were under lockdown and constrained in their houses, something to do that took their mind off the situation. And that was really our primary purpose. And then there was a subsequent phase where it was around sort of slowly starting to welcome people back, to get them thinking about travel and some of the concerns around cleanliness and safety and how we addressed those. And to talk to people about what it meant to visit Hawaii right now. What it meant to come at a time when COVID was still a presence in all of our lives, how you could do that in a way that was respectful to residents in the community that allowed you to have a positive experience. And so we had a whole series of communications around the theme that we called travel polo, which was very much about personal responsibility and what it meant to be able to have a meaningful trip to Hawaii right now. And that sort of continued through the last couple of months where commercial activities started to pick up and we've begun promoting new fairs, new routes and all the other stuff that we love to do again. Great. And I'll say I love what your communication team is doing. So I look forward to more information about that. So the next question or next topic we wanna cover is maybe a little twofold, right? And it's one, if you could talk a little bit about the new routes. So recently in the press, there's actually been quite a bit of press about the new routes to and from Orlando, your Ontario, California, and I believe coming up sometime this month. Yes. Maybe this week or maybe next week, right? It's gonna be your Austin, Texas route. But maybe in sync with that, and I don't know if it's in sync or out of sync is the on-growing concerns about more tourism? Do we have, I think you might have seen lately in civil beat and on the advertiser blurb article about residents on Maui retaking part of Wailea Beach that had been kind of overrun by visitors. And then there was something about in Kailua about not wanting to have as many visitors on Kailua Beach as well. So there seems to be some of that growing sentiment about what's the balance? How do we find that balance? And it could have been precipitated by the unexpected high demand in spring break where you saw up to 22, 25,000 arrivals every day, still down from 30, 35, 40,000 per day in the peak, but nevertheless, I think that caught a lot of people off guard, maybe not the airlines, because maybe people tend to book the airline farther in advance, but it seemed to catch everyone else somewhat off guard. Yeah, and I think it might have caught us a little off guard too, because I think the, usually there's a booking curve where people book their trips in advance. That was very compressed because of the effect of COVID and the people who are traveling now demographically are different than historically who's been traveling to Hawaii in the past. So I think it was a bit of a shock to the system. We're still very, as you pointed out, far below what we would have historically seen at a sustainable and comfortable level of visitors, but it's also the case that a lot of the infrastructure didn't open up in time. So restaurants were at limited capacity and a lot of them have closed. And so I think it was a place where the activities weren't fully open. And so I don't think the infrastructure was quite ready for the surge that we saw right around spring break, which is now subsided very substantially. Hey, Avi, you know, approximately, where's Hawaiian Airlines right now in terms of percentage of seats available in the market compared to the same timeline? Yeah, I mean, if you were to compare us to 2019 for domestic seats, I think by summertime, we'll be back up to about the same number of domestic seats that we had at the same time in 2019. Now, of course, that has to be offset against the fact that we're still operating considerably less inner island than we were before and very little international. And so that part of the business hasn't come back, but the domestic part of the business, again, still not back to where it was before, but coming back at a faster pace than those other segmentations. So we'll get back to your comments on the route, but you've got a point about booking pace, very different booking pace and the demographics of that visitor. So spring break has always kind of been dominated by North American business anyway, right? Because the Japanese peak is like the summer and then the year end period. So tell me a little bit about what you guys were seeing from a chain of demographic and then maybe segue into some of what you saw with regard to booking pace. Yeah, so the mix has been younger, frankly, and more single travelers than families. And that's kind of to be expected. I think it's less that that is a bigger group than it was before. Just that we have fewer families and older folks comfortable traveling at this point. And we expect that as the vaccination proceeds on the mainland, our domestic mix is gonna look much more like it was historically, but there's a temporary shift because the folks who are traveling now tend to be younger and less concerned about the impact of COVID right now. Okay, so you mentioned that your seat capacity domestic-wise is gonna be pretty much what you had in the summer of 19. Is that because you're seeing that booking pace at this point well in advance that'll justify that seat capacity? You know, I think we're starting to see and it started in February and March stronger forward demand than we had seen before. Again, not something that would rival 2019. And obviously it needs a long time to accumulate to be full flights at the fairs that we'd like to see. But we are seeing growing visitors. And I think I wanna come back to something you pointed out earlier. It does underscore some of the concern that our community has around the impact of tourism. And that's something, you know, I think we really need to have more of a conversation about this is not something I think that can be pushed by the wayside again. It's not something where I think we can continue to exercise wishful thinking around, maybe we can just have 20% fewer visitors who spend 20% fewer or more, 20% more. That isn't something that I think is realistic. And we sort of know that because when you, that argument's been made for a decade now and when you push people on how we're actually gonna do it, how are we going to make that happen? There aren't a lot of satisfactory answers. So I think we need to be moving beyond some of the kind of easy answers to look at some of the really hard policy decisions we might have to make in order to figure out how to make tourism sustainable and continue to be a source of income for people in our community. And I think there are a couple of things that I'll rattle a couple off and then we can talk more. But I think there are a few things that ought to be thought about from a policy standpoint when we think about sustainability. And the first is really infrastructure. The biggest source of friction that I often see is competition between residents and visitors for scarce infrastructure resources, whether that's parking or access to trails or space on beaches. And I think there are things that we can do to take some of the billions of dollars in revenue that tourism generates for the state and reinvest it in infrastructure and management. And you look at some of the experiments around reservation systems for over-traffic sites. Those are all important things that we can do to try to make tourism more sustainable and reduce the friction it imposes on residents. The second thing that I think is really important is equity. It's very clear that tourism benefits of tourism and we all benefit from tourism those of us who live in the community some of us indirectly, some of us directly but the connection is not as clear for everyone and we need to find ways to distribute the benefits of tourism more equitably. And then the last is using tourism as an engine for diversification. We're talking a lot about diversifying our economy. Diversification should happen from points of strength and tourism is our greatest point of strength. And so how can we use tourism to drive innovation and diversification to the kind of economy we wanna have. So those are some of the things that I think we ought to be really thinking about. No, great, great point. You know, one of my best compadres in the industry and someone who I have tremendous respect for, Jerry Gibson. You know, as you know, Jerry for the last few years had been very vocal about the transit vacation units and hence the bill, can't remember the name 89 or 18 whatever was passed in I believe August of 18 or August of 19, one of those years. And, you know, and that's what he probably contributed. He felt, you know, there was 20 some odd thousand illegal transit vacation units in the island. So he kind of feels part of that organically by having reduced a number of TVUs in the state will, you know, would and the hotels were all running in the 90% occupancies for the year, right? Record occupancy across the state. So theoretically, I mean, it'd be difficult to operate at a higher occupancy. So just that in itself would make it somewhat difficult for us to get back to that 10 and a half million level. Anyway, but you know, that's interesting. There's kind of a segue also, as well, you know, as someone who's greatly involved in what's happening in the industry, recently the Senate, you know, Senator Wakai and discussion about further reducing the HTA budget from what it was back in the 18, 19 year of 108 million or somewhere in that neighborhood to the 78, 79 million they had in the 2021 budget to now maybe even dropping it further to somewhere in that 40, $50 million range. Some of your general thoughts about that, you know, I mean, I think as a marketer, no one feels good about having less money, but, you know, just some high level thoughts you have. Well, I think, you know, there is absolutely a dialogue to be had about the strategic focus of HTA and managing tourism and marketing tourism and how we go about that. And I think that that is a good and healthy discussion again for us to be having at this point in time. I think that discussion ought to be had, I worry a little bit about some of these things transpiring and sort of gotten replaced bills and how they're happening. I think it's an important dialogue for us to have. And my hope is that the legislature who worked with the Board of HTA to determine a strategic plan for HTA will continue to administer that strategic plan. And now is not the time, I think, to cease investing in the engine of our economy. It's a time when we need to be driving recovery, we need to be driving diversification and you can't do that without some base of healthy industry from which to do it. And so I'm hopeful that we can continue this dialogue, that we can talk about what we need to do to make tourism healthy and sustainable for the state and also use tourism as the fulcrum to transform the state's economy. Okay, good point. So we have maybe about four or five minutes left. So, you know, give the viewers a little touch about your thoughts on Orlando and Austin. I mean, Ontario, California is a slam dunk, right? But what about Orlando and Austin? Nothing in the aviation business is a slam dunk, much of that I wish it were. They're all big markets. They all have a lot of demand to Hawaii and no nonstop service. Orlando's a market that also has some demand from Hawaii there. And so we think that's gonna be a great market. And Austin's a growing city with a lot of people relocating from the West Coast where we have a very strong brand and our product is well loved. And so we think that's a market that's going to continue to grow and be successful for us. Great, so I think we've got a real short time left. If you took out the crystal ball from your desk drawer, Avi, as you look at the balance of 2021 and into 2022, you know, back Smith travel research eight months ago was saying Hawaii wasn't gonna be back till 23, 24, 25. What are your thoughts on that given what you're seeing? You know, I think that there's a lot of demand for Hawaii. There's a lot of pent up demand for travel in general. And for us and for businesses, I think in the space now is a time of opportunity and risk. And so it's an inflection point. I think we have to all be willing to take some risk and seize opportunities that we might not otherwise have done. And again, I think the biggest constraint to the ability to sustainably regrow our economy is some of the policy questions and community issues. And we ought to be really tackling those head on right now. Right. All right, I think we've run out of time. Avi Manes, senior vice president of marketing Hawaiian Airlines did not disappoint. He provided his honest insight, professional insight on some of the things Hawaiian Airlines has gone through. And as some of the interesting demand that they're seeing not only the summer, but it's the future. So I want to thank you, Avi, for joining us. I'd love to have you back, maybe with a panel at Jerry and maybe some of the other leaders. But for everyone who's been listening, again, my name is John Conching. This is the Hawaii Hospitality Show every other Tuesday on the thinktechhawaii.com. You can log in and you can also watch the recording show on the YouTube channel as well. And again, we feel that it's an important platform to have not only our residents involved in the industry and one who's not in the industry learning more about not just the high level executive like Avi and others, but my future guests will include a lot of visitors, excuse me, businesses and individuals that are associated with other facets of our industry. So thank you very much for joining us. Avi, we appreciate you having you as a guest and Aloha and have a great afternoon, everybody.