May Newsletter

President's Message


Aloha HHA Membersand Directors,


"All politics is local," is a familiar refrain on the campaign trail, and in the world of public policy.It's a quote largely attributed to former Speaker of the House, Thomas "Tip" O'Neill, and is typically applied to the use of political tactics to win elections or move public opinion on specific initiatives.


But this catchphrase resonates deeply with the entire board of the Hawai'i Hotel Alliance. We understand that decisions, made far too often in silos by federal, state and local elected leaders, can significantly impact our bottom line, and our ability to conduct business. That's why it's incumbent upon all of us, to do everything within our power to educate ourselves on the issues, and with the support of key professionals, analyze and strategize action plans, so we can advocate for the outcomes we want to achieve.


In this month's newsletter we'll share many examples where we need your assistance.


In the first, federal, state and local leaders are all engaged in decision and policy making, as they explore the best alternatives to address the ongoing water crisis at Red Hill. It feels like only a few short months ago, I used this column to thank representatives from our industry who stepped up to provide safe and clean accommodations for families impacted by the fuel leak and water contamination, and I'm still very grateful for their efforts.


But now we have to be even more vigilant as the situation continues to evolve.The City and County of Honolulu has requested that all water users voluntarily cut back. We as an industry need to proact and show the public that we are proactive so that we don't fuel negative resident sentiment because of the perceived lack of water infrastructure on Oahu.


While local officials like to tout the power of home rule and the importance of localized decision­ making, we have seen time and again that decisions made on one island, often impact policies established on theother islands. That's one of the reasonswe provide a breakdown of key issues happening at the island level in each of our newsletters, so that our members can gain situational awareness about issues acrossthe state, as we believe it's only a matterof time before decisions created in one jurisdiction impact others, as well as set the tone for state and federal policies.


As we've seen during the last few weeks, as the scrum of candidates announce their intentions to seek office, it's important to recognize that whether they intend to move upthe chain (from local, to state, to federal office), down the chain (from federal, to state, to local office), or enter the political arena for the very first time, it's incumbent on our leadership at Hawai'i Hotel Alliance to continue to develop strong relationships with all of these decision makers. The Hawai'i Hotel Alliance has developed a very strong reputation during the last year, and we want to continue to build on that momentum.


May has often been referred to as Hawai'i's "shoulder season" because of historic declines in the number of visitors. That's especially true as people take time to celebrate the end of COVID restrictions, the end of the Legislative session, or to gather together to celebrate Mother's Day, graduations, or long delayed family vacations.


It'sunderstandable that our focus may stray away from the political arena.


But I believe"shoulder season" has an entirely different meaning. As we continue to deal with the repercussions of a 2-year global pandemic, in everything from: labor shortages, to the availability of goods and materials, to inflation; and as we look forwardto the upheaval we'll experience with new leaders after the electionseason; I believeit's time to double-down on our investment, and stand, shoulder-to-shoulder, with our peers in the industry.


Because it's true - all politics is local. And the only way we can impact it, is to continue our vigilance and work together to achieve the outcomes that we want to see.


Mahala for standingwith us!


Jerry

 

NEWS AND ACTIONS AROUND THE ISLANDS:


Hawaiʻi:


  • Hawaii County Mayor Mitch Roth is asking the Hawaii County Council for a $.45/$1,000.00 rate reduction on property taxes for hotel and resort classes for fiscal year 2022-23, after property taxes nearly doubled for many hotels, due to a significant increase in market values. The Hawaii County Council will have its first reading on the budget on 5/19/22, with rates to be established by the end of June, prior to the state of the fiscal year on July 1st.


  • Hawaii CountyCouncilmember Sue Lee Loy has introduced Bill 156, capping the rate of increase year-over year for properties in the commercial, apartment, hotel and resort, agricultural, industrial and conservation classesto a maximum of 15%. This would be similar to the rate structure in place for the homeowners' class (3%).Bill 156 will be heard by the Hawaii CountyCouncil Finance Committee on 5/18/22.


Oʻahu:

Water Conservation: Statementfrom Jerry Gibsonand Kekoa McClellan Conserving water and our islands' finite resources has been a part of hotel ideology for decades. In the current environment, properties across the state are doing everything they can, particularly in Honolulu, to adhere to the rigorous standards and protocols already in placeto reduce water usagewherever possible. Some of the criticalwater saving measuresinclude state of the art filtration systemsthat enable the prolongedreuse of water in pools, smart irrigation systems that respondto weather conditions, low flow toiletsand fixtures, and staff and guest education programspromoting water conservation. In some cases, water usagehas increased because of programs designedto green hotel properties, namely the rollout of eliminating single use plasticsfor water consumption. Reusable water bottles on properties combined with water filling stationsreduces the carbon footprint of our visitorsand kama'aina who stay at our resorts, but increases the consumption of water on property. One of the best ways we can promotethe reduction of long-term water use on resort properties is through the redevelopment of our hotels.Whenever a new hotelgoes up, or an old hotel is renovated, they are done so to exacting standards that almost alwaysfar exceed the conservation and efficiency requirements that our counties have in place.Locals and visitorsalike demand that our tourismindustry acknowledges and invests in the environmental fragilityof our island home, and our member properties pride themselves on the many efforts they make to promote pono stewardship of all our resources, including and especially water. The industryremains hopeful that through ongoing,enterprise-wide conservation efforts sharedby all of us, forced reductions from the Board of Water Supply can be avoided. Ernie Lau and KathleenElliot-Pahinui from the Board of Water Supply will be attendingour next Board of Directors meeting in June to provide an update on the current situation on Oahu.


Maui:

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

  2. Resolution 22-70,which basically placesa permanency on the moratorium, advancedout of the PSLU committee 3/18/22and has been referred to the PlanningCommission. It would currently cap all transientaccommodations, restrict new additions to hotels, and curbany new hoteldevelopment and permits. It will now be referred to three community advisory committees:

South Maui - hasnot been organized yet.

Paia-Haiku-Makawao - has not been organized yet.

Hana

  • The council has now includeda limit of $500,000 on interior and exterior repairs.

  • The Planning Directorcan also delegate to make changes/rules.

  • The Bill goes to the Maui PlanningCommission (MPC) where five (5) votes are needed for approval and then to the Mayor for signature.

  • Lahela will continue meetingwith MPC membersto work towardseither:

  • Recommend rejecting the resolution in its entirety.

  • Propose amicablelanguage, which would include to strike-out "hotels" from the resolution

  • Focus on short-term rentals and the impactit has on our housingcrisis

  • Currently, puttingtogether a short presentation to show the effect STR's have on our housing crisis.


2. SMA & Shoreline Assessment

  • Recently amended to align with hawaiisealevelriseviewer.com.

  • Basically, takes the viewer,which has mappedout a "blue zone" and anything within the "bluezone", and sets your setback accordingly. It could add an additional 45 ft, could be more or less, depending on where your property falls within the "blue zone" of this viewer.

  • After discussions with the Mayor, the communitymeetings have been delayed until the end of summer. We would like the meetingsto begin after the elections.

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


3. Workforce/Affordable Housing

  • Sharing Connexions HI (SCH) is a non-profit organization, that has proposed a public­ private partnership with the Countyof Maui to build out 650-1200 homes in South Maui, dependent on thecounty's position. The proposedaction is to have SCH acquire150-acre Kihei site as a 100% affordable workforcecommunity of rentaland for sale units servinga population of <30%AMI to 140% AMI. SCH's approachon this project is to utilize a land trust model to ensure affordability in perpetuity. This could be a potentialproject that would assisthotel employees that are currentlycommuting to work on the south side and a possible partnership in securing or assuring homes for our southside employees.


  • Lahela is working with Gil Keith-Agaran and Maui Oceanview LP on its Pulelehua project in West Maui, specifically Kapalua. Pulelehua is a 304-acre master-planned green residential and retail community designed for the local workforce and residents seeking long-term rental. Pulelehua will have 800+ mixed use rentals and market sale homes. I'm trying to have the developer set aside a number of workforce rental units specifically for employees at the Ritz, which would uphold an original agreement between Maui Land & Pineapple and the hotel. Although MLP sold, there may still be good faith negotiations that could be upheld.


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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