June Newsletter

PRESIDENT'S MESSAGE

Jerry Gibson


Aloha HHA Membersand Directors,


It's often said, "the only constant is change". During my last 18 months leading the Hawai'i Hotel Alliance (HHA), that adage certainly rings true.


Change is all around us. We have been:

  • Adapting to the government's restrictions and declarations on travel.

  • Addressing ever changing case counts and new variants of COVID19.

  • Navigating changes in how the legislature uses and appropriatesthe transient accommodations tax.

  • Developing new relationships with the county finance departments, as they become much more intimately aware of the nuances in our operations while collecting their own transient accommodations taxes the last six months.

  • Adjusting to the constant turnover in appointed leadership of departments at the city, counties and state.

  • Watching the changes we'll have in our upcoming election cycle, with a new governor, new lieutenant governor, new state legislators, new city and county councilmembers, and potentially new mayors for Maui and Kauai - change is all around us.

One big change in the news recently, was the decision by the Hawai'i Tourism Authority to select a new potential contractor to market our islands to NorthAmerica. Many of our Hawai'i Hotel Alliance members have longstanding partnerships with the Hawai'i Visitors and Convention Bureau (HVCB), which has a history of successfully adapting to the changing ways potential visitors learn about Hawai'i.


Our community demanded change through the Destination Management Action Plans (DMAP). Legislation this year further codified many of those DMAP priorities.


The new (potential) contractor, the Council for Native Hawaiian Advancement (CNHA), is still in the process of developing its plans and articulating who is involved in its partnerships. We're closely watching how they proceed and our board of directors will be determining our way forward.


News of the change is still so new, and the period for appeals is ongoing, we don't yet know if this decision will be final. The Department of Business Economic Development and Tourism (DBEDT) and HTA may have to change course once again, and prepare a third request for proposals, to address concerns raised with the procurement process. HTA's CEO John De Fries acknowledged as much in his statement earlier this week,when he said that HTA was in the process of shifting its staff and resources, in order to continue key marketing objectives as the current contract extension with HVCB will expire at the end of this month.


We will continue in this state of flux and it is necessary for all of us at the Hawai'i Hotel Alliance to continue to stay on top of issues that impact every aspect of our industry: from marketing, to taxation, to political alliances. We must do this while still dealing internally with the myriad of changes happening in operations at our hotels.


I am very grateful that all of us are in this together. Staying on top of these changes while still focusing on our individual hotels and business needs would be nearly impossible to undertake alone. But collectively, we bring our experience, our relationships, and our shared knowledge to the table. Whatever changes we'll experience next, I have confidence that with our combined energy and strengths, we'll successfully navigate them.



Mahalo and the very best to you!


Jerry


 

NEWS AND ACTIONS AROUND THE ISLANDS:

Hawai'i:

  • Despite requests from the administration for relief, nearly 800 appeals filed, and substantial testimony from the chambers of commerce, andindustry associations, the Hawai'i County Council could not agree onproperty tax relief. Property tax rates for 2022-23 will be the same as they were in 2021-22. Hotels and resorts across Hawai'i Island saw their valuation increase an average of 46%, with seven properties along the Kohala Coast increasing more than 50%, and one property seeing its building values increase by 124% year-over-year.


  • The Hawai'iCounty Council is moving forwardwith a $5 millionbudget appropriation in 2022-23 for the Office of Housing and Community Development, to further expand affordable workforce housing. The funding for this program will be comingfrom Tier 2 residential, a surcharge on 2nd homes with values of more than $2 million.


  • The Hawai'i County Council approved a partnership with the Hawai'i Tourism Authority to fund a number of DMAP initiatives in east Hawai'i, including community concerns in Keaukaha, as the cruise industry returns.


Maui:

  1. Bill 148, Moratorium on transient accommodation permits was passed on 1/07/22.

  2. Resolution 22-70,which basically places a permanency on the moratorium, advanced out of the PSLU committee 3/18/22,adopted 4/1/22 and referred by the Planning Commission. It would currently cap all transientaccommodations, restrict new additionsto hotels, and curb any new hotel development and permits. On June 14, 2022, MPH voted and passed Resolution 22-70, to be referred to the Hana Advisory Committee, South Maui Advisory Committee and the Paia-Haiku-Makawao Advisory Committee.

  • The South Maui Advisory Committee is not yet established. Applications are currently being accepted with a deadline of June 30, 2022.

  • The Paia-Haiku-Makawao and Hana Advisory Committees are supposedly set with its members, but have had no meetings to date,no officers to date, no rules to date,and no scheduled meetings to date.

  • There is no set time frame for the Advisory committee to return its recommendation to the MPC and there is a 120-day deadline for MPC to return its recommendation to the county council.

  • The subjectwill not come up again until approximately Mid-Julyand HHA and otherswill be monitoring it.

2. SMA& Shoreline Assessment

  • Recently amendedto align with hawaiisealevelriseviewer.com or http://www.pacioos.hawaii.edu/shoreIine/slr-hawaii/.

  • Basically, the website shows you the "blue zone" and anythingthat falls in it so you can view your property's setback accordingly. The map could show an additional 45 ft of setback (more orless), depending on if and where your property falls within the "blue zone".

  • After discussions with the Mayor, the community meetingshave been delayeduntil the end of summer. We would like themeetings to begin after the elections.

  • The Hawai'iHotel Alliance will be assistingin sending out mailers to the public to educate them on the changes and how it affects them.

3. Bill 21 - A Bill for an ordinance amending Chapter 20.35, Maui County Code, relating to outdoor lighting for protection of seabirds. Seabirdand biodiversity protection (CARE-74)

  • On June 1, 2022, CM King introduced the bill with amendments, which was passed by the committee 6-1.

  • Bill 21 gives all businesses three (3) years to replace artificial light fixtures to become compliant.

  • THIS BILL WAS DEFERRED ON WEDNESDAY, JUNE 22nd and we will monitor when it comes up on the agenda.

4. Workforce/Affordable Housing

  • Sharing Connexions HI (SCH) is a non-profit organization, that has proposeda public-private partnership with the County of Maui to build out 650-1200 homes in South Maui, dependent on the county'sposition. The proposedaction is to have SCH acquire a 150-acre Kihei site as a 100%affordable workforce communityof rental and for sale units servinga population of <30% AMI to140% AMI. SCH's approach on this project is to utilize a land trust model to ensure affordability in perpetuity. This could be a potential project that would assist hotel employees that are currently commuting to work on the south side and a possible partnership in securing or assuring homes for our southside employees.


  • Lahela is continuing to work with State SenatorGil Keith-Agaran and Maui OceanviewLP on its Pulelehuaproject in West Maui, specifically Kapalua.Pulelehua is a 304-acre master­ planned green residential and retail community designedfor the local workforce and residents seeking long-term rental.Pulelehua will have 800+ mixed use rentalsand market sale homes. Lahela is trying to have the developer set aside a number of workforce rental units specifically for employees at the Ritz-Carlton Maui, Kapalua, which would uphold an original agreementbetween Maui Land & Pineapple and the hotel. Although MLP sold, there may still be good faith negotiations that could be upheld.


5. Commission of Water Resource Management - Proposed West Maui Water designation of all five aquifers.

  • HHA workedvery hard in organizing, educating, and collecting testimony to provide for the CWRM hearing that was held on June 14, 2022.

  • There were 171written testimonies submitted; one commissioner statedthat there was 2:1 in support of deferring this matter. There were 57 oral testifiers; it seemed even on those who testified in support of deferring and those who supported the designation.

  • After 6.5-hourhearing, there were only two (2) commissioners that felt it was part oftheir due diligence to defer the matter and bring all the major stakeholders to the table,create a work group to collaborate and bring a balanced solution.

  • Thevote was taken and the motion to designate all 5 West Maui water aquifers passed.

6. The Hawai'i Hotel Alliance is co-sponsoring the 2022 Maui Hotel & Lodging Association Candidate "Meet and Greet" Mixer being held on June 28, 2022, from 5-7pm, at the Hali'imaile General Store. If interested, contact Lisa Paulson at lisapaulson@mhla.org.


Oahu:

1. Bill 41

  • On June 6th, a group of operators of short-term rentals filed a formalcomplaint against the Cityand County of Honolulu in Federal Court asking for an injunction against the new laws that took effect to curb the blight of illegalshort-term rentals on Oahu's neighborhoods. The suit claims "The right to own and rent property is a fundamental right under the UnitedStates and Hawaii Constitutions" but falls short of acknowledging the rights of our Countiesto regulate and permit their use. The complaintalleges that Bill 41's redefinition of 'short-term' as any rental of less than 90 days violated the operators' vestedrights.


  • The Hawai'i Hotel Alliance and the American Hotel andLodging Association anticipated these complaints. That's why we workeddiligently and publicly for over a year to support amendments to Bill 41 which carefully considered the rights of the City to regulatethe definition of "short-term" and the City's kuleana to protect the rights of our communities to safe and affordable residential neighborhoods. We were careful to root our suggestions in established case laws that clearly permitsregulation by the City and County of Honolulu and supports the use of penalties for noncompliance that hold hosting platforms and operators or owners of illegal short-term rentals responsible for non-compliance with the county code.


  • Despite this suit, The City's Corporation Counsel (their in-houseattorney), The Department of Planning and Permitting (responsible for enforcement), a majority of the members of the City Council, and Mayor Blangiardi have projected their continued supportof Bill 41 and are confident in their legal footing. The Hawai'i HotelAlliance and our policy allieswill continue to publiclysupport the City in their efforts to defend Bill 41as the Nation's gold-standard for theregulation of illegalshort term rentalsand we will keep you apprised on how you and your enterprise can support these efforts.



2. Update from the Board of Water Supply (BWS)


  • We were fortunate to haveErnie Lau, Chief Engineer,and Kathleen Elliot-Pahihui, Information Officer, from the Board of Water Supply at our last Board of Directors meeting on Friday, June 17, 2022. They provided us updates on the aquifers, currentusages and contingency plans if the situation changes.

  • The BWS is asking everyone to conserve water and use 10% less especially during the summer months to help prevent any forced water cutbacks.

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