Survey: The Bureau conducted a survey of various tourism-related businesses in Hawaii covering the 1997 to 2001 calendar years. These businesses fell into the following sectors: attractions and activities; accommodations; transportation; travel trade; retail; and food and beverage. We asked how much of their own money they spent to promote the State as a tourism destination. We broke the expenditures down into six items under consumer advertising, two items under consumer communications and promotions, and four items under travel industry activities. We also asked businesses to globally estimate how they allocated their expenditures to target "pre-arrival" and "post-arrival" visitors. The content and design of the survey instrument were reviewed by the Hawaii Tourism Authority, the Department of Business, Economic Development, and Tourism, and the Hawaii Visitors and Convention Bureau and a variety of changes were made in response to their observations and concerns.
Caveat: Limitations of this survey (detailed in chapter 3) make the results uncertain. It is uncertain whether the reported dollar expenditures -- after allocation and interpretation by respondents -- actually present a true or uniform picture of how much private travel-related businesses spend to promote Hawaii.
Results: Only 144 of 870 delivered surveys were returned for a 16.6% response rate. A total of 85 (59%) reported not having spent any private funds to promote Hawaii and 59 (40.9%) reported having made such expenditures.
Total and Annual Expenditures: Over the 5-year period from 1997 through 2001, 59 respondents reported spending a total of $164,919,650 in private funds to advertise and promote Hawaii. The average annual expenditure for the 59 businesses was $32,983,930 and ranged from $26,297,482 in 1997 to $39,064,075 in 2001.
Global "Pre-Arrival"/"Post-Arrival" Allocation of Expenditures: We asked businesses to tell us how they allocated their private spending to target "pre-arrival" and "post-arrival" visitors.
Accountability: Monitoring, Assessment, and Evaluation: We re-visited several issues the Bureau examined in a 1998 report on tourism. Accountability for public funding of tourism promotion was one of those issues. Measuring the effectiveness of tourism promotion expenditures was another.
We stressed the need to monitor tourism promotion and marketing contracts and the need to measure and evaluate performance. The effectiveness of promotion expenditures can be measured only if state contracts ask for assessments of how the money is spent. We recounted several evaluation measures discussed by the Auditor in 1987: market share, sales analysis, distribution cost analysis, and measures of customer satisfaction. We further reviewed three evaluation techniques presented by the Auditor to measure the effectiveness of advertising: communication effect research, sales effect research, and conversion studies.
Finally, we briefly reviewed several attempts at measuring the impact of tourism marketing recently. These included a 1996 macroeconomic cost-benefit study that measured input and output at the macro level (gross state product) but not at the micro (departmental-budgetary) level. Another was a 1995 HVCB conversion study. Finally, we described a so-called "return-on-investment" formula developed by Virginia in 1987 to measure the effectiveness of its tourism marketing program. All three have limitations and drawbacks and none is a panacea.
We encourage the HTA to vigorously monitor tourism promotion contracts and to strengthen accountability by developing methods to assess and evaluate performance.Back