Category Archives: Marketing

Selling Travel To Hawaii

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No aloha shirts! (Official White House Photo by Pete Souza)

I spent Wednesday at the Hawaii Tourism Authority’s spring market review. HTA pulls in its marketing contractors from “around the world” to tell the Hawaii visitor industry what is being done for them. I used quotes because HTA doesn’t market Hawaii globally. Hawaii’s official tourism marketing is restricted to the United States, Canada, Japan, China, South Korea, a little bit in Taiwan, Australia, a bit in New Zealand and a pittance in Germany and the United Kingdom. This is largely due to mythology that tourists won’t come unless they have direct flights.

While I am concerned about where Hawaii isn’t represented, the contract marketing people appear to be doing a pretty good job with the funding they have. Some have plenty (United States, Japan, China) while others bear up under the “do more with less” syndrome that afflicts governments everywhere. All in all, it’s a pretty creative bunch that ably cashes in on the “brand” that is Hawaii worldwide. I tweeted interesting tidbits during the event (@OldPaddler), but here are some more detailed notes about Hawaii’s international tourism efforts.

HTA’s message was upbeat. Yes, the recession hurt the tourism industry, but travel to Hawaii is rebounding and airline capacity to Hawaii is showing serious growth. The gaudy headline from 2011 is a 90% increase in capacity between Seoul and Honolulu, admittedly from a low base. Hawaiian Airlines added seats from Japan and Australia. Charter flights were launched from Shanghai, with continuing rumors of more to come. Hawaiian is starting non-stop flights to New York in 2012, which will give better connections to travelers from Europe. And, this May, little Mokulele Airlines will try a Honolulu-Chicago non-stop that will continue on to London Stansted. Talk about ambitious! Listening to David Uchiyama, HTA’s vice president for brand management, though, I came away with the read that it is the pre-existence of direct flights that governs where HTA spends its marketing dollars. While Uchiyama paid lip service to developing new markets, it was clear that if you can’t get to Hawaii without changing planes, he isn’t very interested. I have railed against that attitude for years because I have seen plenty of well-heeled, adventurous travelers who find hard-to-reach destinations among the most attractive. And they tend to spend a lot and stay a longer time.

Hawaii’s meetings market got a tremendous boost in 2011 when Honolulu hosted 21 heads-of-state and thousands of others for APEC in November. All those news broadcasts showing APEC delegates in tropical surroundings were gold for the tourism industry – and especially for the meetings industry. Hawaii has long been attractive for incentive travel, but has big problems when it comes to large meetings, conferences and trade shows. A major international trade show is a no-go in Hawaii simply because of shipping logistics. It takes a lot of time and even more money to move large, heavy exhibit materials and products to Hawaii – a disadvantage to being a paradise in the middle of an ocean.

Hawaii has done better with conferences and regularly attracts big groups in the medical and scientific fields. Cardiologists and dentists find us especially attractive. Honolulu has hosted the Pacific Telecommunications Council annually for many years, and there is a new annual green energy conference that shows considerable promise. But these big conferences aren’t as easy to come by as you might imagine. Randall Tanaka, assistant general manager of the Hawaii Convention Center in Honolulu, pointed out that a convention organizer has to really want to place an event in Hawaii because he is going to take a hit on attendance. Any Hawaii meeting or convention is going to be called a boondoggle by somebody, plus the industry still suffers from “AIG syndrome”, a backlash against seemingly exorbitant corporate travel. That, says Tanaka, gives destinations such as San Diego or San Francisco a strong advantage over Honolulu. He cited the example of the American Dental Association, which often comes to Hawaii despite the knowledge that they can draw twice the number of dentists if they meet in Las Vegas. Here’s the presentation on MICE travel. It’s big, takes a while to load.

One lesson from APEC that Tanaka and others can’t mention in public is that the travel cost and distance to Hawaii can minimize potential protestors if your meeting is at all sensitive. We saw this in spades with APEC. The November 2011 meetings were in the heyday of the “Occupy” movements and some predicted a tropical “Battle of Seattle”. Never happened. See my post on the “bikini protests“.

A similar point is that meetings can be held in Hawaii with relative anonymity. Working closely with the consul general for Japan, it took me years to convince the guys with green eye shades in Tokyo and Washington to use Hawaii as a site for bilateral trade negotiations. Our arguments were that neither negotiating team had to travel as far or get as jet-lagged as going to one of the capitols, that Honolulu cost less than either Washington or Tokyo, and that we could stage meetings that the press would never hear about unless we wanted the coverage. That is still largely true. We began holding bilateral trade talks in Hawaii in the mid-1980s, added more countries to the mix and, so far as I know, they still happen here. But nobody knows.

We’ll get into more country-specific tourism talk in upcoming posts.

Playing Hardball In Canada

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In an eery parallel to debates in Washington about the future of the U.S. Commercial Service, the Trade Commissioner Service up in Canada is going through the same sorts of hoops. In hearings in the House of Commons last week, Canada’s politicians were told that small and medium-sized Canadian exporters are in danger of losing sales in emerging markets unless the TCS is quickly enlarged. The TCS has some 150 overseas offices, but more are needed to properly support the export ambitions of Canadian companies.

Canada's lentils

“They are the eyes and ears out there in the world,” said Murad al-Katib, president & CEO of Alliance Grain Traders in Saskatchewan. Alliance deals in grains, lentils, peas and beans – and ran into a problem in Algeria. Algerian customs officials seized a cargo of lentils and held it for thirteen months before the company thought to take their problem to the Canadian Embassy. “Within 13 days, not 13 months, our containers were released, our problem was solved and we were able to continue with our business,” said Al-Katib. Good thing dried lentils have a long shelf life.

iPolitics columnist Peter Clark, falling for the trade as zero-sum game fallacy, sees a threat from Washington’s attempt to double U.S. exports: “Those export increases are going to come out of somebody else’s hide and we’re the closest available hide.” Clark sees the new U.S.-South Korea free trade agreement and the negotiations for an expanded Trans Pacific Partnership as blows to Canadian sales in the Pacific region, forecasting damage to Canada’s pork and beef exporters. Clark also said that Washington is beefing up its Foreign Commercial Service and has a “vast” Foreign Agricultural Service to bolster U.S. exports. [Clearly, he hasn't heard about the CS's post closures - including the office in Vancouver.] Referring to the Americans, Clark gave us a compliment when he said “…and they play hardball.” Good to hear it, but is anyone in Congress listening?

Clark argues that TCS needs to be expanded in Russia, China, the ASEAN markets, South Korea, Brazil, India and the United States.

This post is based on an article on Canada’s iPolitics. Unfortunately, you can’t read it without a subscription.

Jobs Diplomacy

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Hmm...whose conference is it?

Folks have asked what’s up with the U.S. Department of State’s newfound infatuation with trade promotion. Actually, it isn’t new. The fascination has been there ever since State lost its commercial officers to Commerce in the Trade Act of 1979 and Commerce’s U.S. Commercial Service was established. Every few years it occurs to somebody in Foggy Bottom that this is a major area of foreign affairs that State does not control, so noises are made either to regain the responsibility or to appear as if State is the driver behind helping American companies. We seem to be going through another “driver” phase, though the motivations may be complex.

The latest event in the rivalry partnership between State and Commerce is Secretary Clinton’s February 21-22 Global Business Conference. It doesn’t matter that Commerce Secretary John Bryson spoke at the conference, or that all the other major Washington players were there. The impression created for the public was that the Department of State is leading the expansion of U.S. exports. Few outside the cognoscenti know or care that multiple agencies are involved in trade promotion, even in American embassies. The popular conception is that everyone who works in an embassy must belong to the State Department, so State gets the credit and blame for what they do or don’t do. Never mind that State employees are only a plurality of most embassy populations and that the lion’s share of trade promotion is done by either the U.S. Commercial Service or the Foreign Agricultural Service – neither of which belong to the State Department.

It really doesn’t matter what was said at the Global Business Conference, because it is perception that counts in Washington. The perception is that Hillary Clinton’s State Department is out in front fighting for U.S. exports and American jobs. I see several possible reasons for why this perception is being created. One is that Foggy Bottom feels that exports are sexy again. Export sales are one of the things that may lead the United States away from recession and we have a president who has established a national goal of doubling America’s exports.

Another is Commerce’s present weakness. The Commercial Service continues to get stiffed on budget, though the perpetrators vary, leading to withdrawal from numerous overseas posts. This creates a tempting opening for State, which is – in any event – left to handle commercial inquiries in those embassies and consulates that Commerce has abandoned.

A third is to position State to take advantage of any progress made on the President’s proposal to create a new trade ministry out of the international parts of Commerce, SBA, EximBank, OPIC, USTR and other agencies. State has not been mentioned publicly in the reorg proposals even though it is State’s economics officers who do the heavy lifting in embassies where Commerce has no staff. There may be concern at State that they need to protect their econ staff so that they are NOT caught up in the reorganization.

But one has to wonder if the positioning and perception-making may be for Hillary Clinton rather than for the State Department. Perish the thought that politics may have occurred to anyone in Washington, but President Obama’s running mate for 2012 has not been announced – nor has a Clinton run for the White House in 2016 been entirely eliminated. Both ideas may be totally off base, but the announced theme for the Global Business Conference and for State’s business support work is “Jobs Diplomacy”, a theme not likely to backfire on Secretary Clinton. Such thoughts during election season must be considered heresy, though I note that the conference was billed as “the Secretary’s” Global Business Conference – not the State Department’s conference.

All that said, I recommend you take a look at State’s “Jobs Diplomacy” fact sheet. It is filled with stuff that State personnel overseas have done for years, or should have been doing according to their instructions, but the new emphasis on jobs rather than exports is remarkable. Politically astute, as it were.