HONOLULU — Tourism industry leaders in Hawaii coping with the sharp downturn in business travel are seeking help from a native son — President Barack Obama.
Gov. Linda Lingle, 90 business leaders and Hawaii’s four mayors wrote Obama last week urging him to oppose any measure restricting companies that receive federal funds from using business meetings “as a legitimate business tool.”
As the economy faltered and federal aid recipients came under fire for sponsoring gatherings at flashy destinations, 132 groups and companies canceled meetings and incentive trips to Hawaii in the first three months of this year. The state’s economy lost an estimated $98 million as a result. Other popular destinations such as Las Vegas, Florida and Arizona are seeing similar cancelations.
“This has had a huge effect on the economy in the areas and jobs in the industry,” Hawaii tourism liaison Marsha Wienert said.
Fearing Congress will pass legislation that further weakens the lucrative conventions, meetings and incentive travel market, the industry has launched a campaign to change perceptions of business travel.
Hawaii has a large stake in the campaign’s success: Some 442,000 business travelers visited the state last year to attend meetings, accounting for 7 percent of total visitors and at least 12 percent of all visitor spending, said Michael Murray, who heads corporate meetings for the Hawaii Visitors & Convention Bureau.
“It’s a very lucrative market,” Murray said.
Industry leaders blame this year’s drop-off on the media and legislators’ response to spending by companies that have received federal bailout funds. But the industry had been dealing for a year with companies tightening their budgets in tough economic times by the time business travel became a political issue this winter.
Hawaii has rolled out a flurry of incentives, programs and deep discounts in hopes of luring back companies. The convention bureau even launched a Web site with special offers that touts the islands as a place for business.
“The pace of bookings have fallen off the edge of the world,” Wienert said. “That’s why we have all these incentives out there right now.”
Fortune 500 companies long used trips to the islands to reward top employees. Some would book entire resorts, rent out golf courses and host extravagant parties. As recently as 2007, for example, Toyota Motor Sales USA, paid $500,000 to rent out the lower campus of the University of Hawaii for a private concert by Aerosmith for 6,000 dealers and their guests.
Those days are gone.
Among the 132 cancellations was a Wells Fargo Co. corporate meeting booked at the sprawling 3,543-room Hilton Hawaiian Village Beach Resort in May. In February, the bank abruptly canceled a Las Vegas trip after criticism that it was misusing $25 billion in bailout money.
“Let’s get this straight: These guys are going to Vegas to roll the dice on the taxpayer dime?” said Rep. Shelley Moore Capito, a West Virginia Republican who sits on the House Financial Services Committee. “They’re tone deaf. It’s outrageous.”
The Vegas trip was to have come on the heels of an announcement that Wells Fargo lost more than $2.3 billion in the last three months of 2008.
Wells Fargo declined comment on the Hawaii cancellation and instead pointed to a full-page ad that ran in The New York Times Feb. 8, in which President and CEO John Stumpf said that Wells Fargo’s employee recognition events were not funded by the government and that media coverage of the issue was “one-sided.”
“Make no mistake, companies that have received taxpayer assistance must be held to a different standard and conduct their business in a transparent and responsible manner,” said Roger Dow, CEO of group. “But the pendulum has swung too far. The climate of fear is causing a historic pullback of business meetings and events, with a devastating impact on small businesses, American workers and communities.”
Several other companies have canceled Hawaiian trips, including IBM, Hewlett-Packard, LPL Financial and AT&T, said Hilton Hawaii Vice President Gerard Gibson.
“I want to believe that things will get better. But quite frankly, Mr. President, Hawaii is in trouble,” Gibson wrote in a personal letter to Obama Feb. 19. Gibson said his Hawaii properties had lost $12.4 million worth of business.
Hawaii has dealt with an image problem for years, however.
“We have to convince people we’re a serious place where business can get done,” said John Monahan, president and CEO of the visitors and convention bureau. “We’re never going to fool anyone that Hawaii isn’t Hawaii. That brand is built so well, we don’t really need to talk about sun, sand and surf any more.”