Aug
7
Look out below!
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If the current downturn in Hawaii’s hospitality industry is anything like the last three, the worst is yet to come, and will begun at the end of the summer.
That was the grim forecast of Hospitality Advisors CEO Joe Toy at his 15th annual Visitor Industry Leaders Briefing, Wednesday afternoon at the Halekulani.
“The last three months have just been terrible,” Toy told a roomful of hotel executives who already knew their own problems but now were hearing the big picture. “We’ve had this huge demand gap building.”
With a series of charts and graphs, all of them listing to the right, Toy compared the 2008 situation to previous downturns at the start of the 1991 Gulf War, during the 1994 economic downturn, following the Sept. 11, 2001, terrorism attack, and, finally, the current downturn, starting slowly at the end of 2006.
“If this one follows the pattern of the others,” Toy said, “We’re entering a period that will be characterized by shallower peaks and deeper valleys. We’re now entering that part of the cycle.”
Things are tough all over. Duane Vinson, vice president of Smith Travel Research, told his audience a lot of their concerns are not unique to Hawaii. Mainland hotels are in a similar fix, although on the mainland luxury hotels are hurting less and budget hotels are hurting more.
“I was trying to find some positive news,” Vinson said. “The positive news is, downturns don’t last forever.”
Mainland room rates have never been higher — the national average is up to $106 dollars a night — but there are lots of new rooms, so occupancy rates would be falling even in a prosperous economy. Urban hotels report room demand is up less than 1% – demand for resort hotels is down 2.4%. Resort hotels on the mainland have less occupancy growth than other segments and their revpars (revenue per available room) are down. Costs are rising.
Vinson did find some positive news, however.
“The weak dollar affects the cost of hotel rooms for people spending yen and euros,” Vinson said. Hotel room rates in Boston, Washington, D.C., and Orlando, which have risen when measured in dollars, have actually gone down when measured in euros.”
Oahu hotel room rates, up 7.4% in dollars, are up only 2.5% in yen.
Los Angeles rates, up 9% in the dollars, are up only 4% in yen. Room rates for yen spenders are flat in San Francisco and down in San Diego.
But, though Vinson didn’t mention it, the dollar has been rebounding lately. The yen is back to 108 to the dollar, erasing some of the discount for Japanese visitors.
In the past 12 months, Hawaii hotel occupancy has fallen 2.4 percentage points to less than 75% on average, but that is still the fifth best occupancy rate of Pacific Rim markets, behind Singapore and Tokyo (both above 80%) and Sydney and Bali (at 79% and 77% respectively) and well above Phuket (70%) and Tahiti (59%).
Average daily room rates in Hawaii are second only to Singapore around the PacRim and ahead of Phuket and Tahiti, while only Singapore and Tahiti lead Hawaii in revpar. Hawaii hotels are also fuller than resort hotels in the Caribbean.
“Holding these room rates will be very important to positioning yourself for the eventual economic upturn,” Vinson said, suggesting that owners use this time to invest in properties and ending with a quote from the Wall Street Journal that drew a laugh from the audience: “A recession is a terrible thing to waste.”
Aug
6
Rex in the box
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The Hawaii Tourism Authority headed into executive session Wednesday, with a full board meeting shaping up for next week, to consider what to do about authority CEO Rex Johnson, while Johnson’s friends and foes offered advice on what to do.
The case of the adult emails has turned into a political squabble that has less and less to do with Johnson’s actual transgression, which, according to his own admission, is that he and some of his friends exchanged dirty emails in lieu of actually writing to each other.
Lawmakers who have no official say in the outcome have weighed in on the matter. Media websites abound with citizen comments. Political websites that exist to propogate specific points of view on the broad public issues of the day are defending or attacking Johnson according to their pre-existing views for or against him.
It may be that this does harm to the efforts of good human resources managers everywhere to nudge people in the direction of better behavior in the office, because it certainly introduces a lot of stray elements into what originally was a matter of what makes for decent behavior amidst coworkers.
Some of the comments I’ve read attacking Johnson make much of state Sen. Donna Mercado Kim defending him, and criticize her alledged diva role in watchdogging the tourism authority. In other words: they don’t approve of Kim, and she supports Johnson, so let’s get rid of Johnson.
Some of the comments I’ve read supporting Johnson refer to such attacks, and essentially propose slapping Johnson’s wrist by way of rebuking his critics.
On both sides, some people need to realize it’s not about them. This is a personnel matter, and Johnson should be dealt with according to what would be appropriate for any state employee who kept such emails in his computer.
Not being an HR professional myself, I am still undecided about how big an infraction this was. It is definitely a no-no, indeed it is a violation of the law, to create a “toxic work environment,” and there is plenty of precedent that putting adult or racist content on a computer screen where other people can see it is an example of this. In fact, if a coworker puts pictures of naked ladies on his screen, you can complain about it even if you are a guy who likes pictures of naked ladies, provided you find it improper for the office.
In this case, however, Johnson apparently did not display the emails to anyone in the office, and he says he didn’t send them to any business contacts. The only reason we even know about them is that an auditor, working on something else entirely, opened and read the emails, then decided to report them.
You might conclude that Johnson had a reasonable expectation of privacy for personal email not willingly shared with anybody. It obviously never occurred to Johnson that someone would look at the emails. But it’s not that simple, because almost all employers tell their employees that their phone calls and computer use on company time may not be considered private.
At a minimum, Johnson will be scolded, and he will be probably be censured, and may possibly be suspended without pay for awhile. But it is also possible that he will be dismissed, or that his resignation will be accepted.
If this happened to me and I wanted to keep my job, I would offer, in lieu of two week’s suspension without pay, to give two week’s pay to an appropriate nonprofit. And then I would dedicate myself to proving to the public that it was not wrong to keep me.
But I’m still not convinced that even a suspension is not excessive punishment for personal emails that were never shown to anybody and were seen only by an auditor. As a result, I suspect that many who want Johnson’s head may have disliked him to begin with and are expressing their longstanding view rather than reacting to this particular matter.
Aug
5
“There’s always something about your success that displeases even your best friends.” — Mark Twain.
“The nail that sticks up gets hammered down.” –Chinese saying, popular in Hawaii.
It’s interesting how many people, not personally connected to the tourism industry, seem actually to be HAPPY hotels are hurting.
Not because they want all the tourists to go home — some do, but that’s not why — because they resent the hotels’ high rates.
Room rates over $300 a night? Outrageous! They brought this on themselves! No wonder fewer people are coming!
What fascinates me about this is the psychology of bile.
Maybe hoteliers would be flying fuller right now if they had only cut rates as the economy cooled, made a public-spirited thing of it — we know you’re trying to save, we feel your pain, come stay for a mere $270 a night, we’ll manage somehow. Forgive us if the proteas haven’t been watered.
But it’s one thing to calmly suggest that efforts to maintain “rate integrity” (two years ago Smith Travel Research scolded our local hoteliers for discounting and admonished them to hold the line because it’s hard to get rates back up after slashing them) are wrong and another to seem so HAPPY that they’re losing some business.
When Wal-Mart came to Hawaii, the public discourse included much about supporting your local retailers, but here and there came discordant tones from people who felt they had been ripped off by those local stores, that they made “too much” money, and they hoped Wal-Mart wiped the floor with some of them.
When June Jones was criticized for leaving us, and when Evan Dobelle was criticized for being a windbag, some people kept bringing up their big salaries, not because the salaries justified higher expectations necessarily, but more like the salaries were additional transgressions.
As I write this, Hawaii Tourism Authority CEO Rex Johnson is wondering whether he will survive the discovery by an auditor that he had some x-rated emails in his computer, the kind people forward to each other in lieu of actually writing a note.
The matter is cluttered with side issues:
- Whatever you do or don’t do to Johnson could affect future cases involving other state workers. (Like anyone will ever try to fire a regular state worker over racy emails they never showed anyone.)
- We have a tourism crisis and it’s a bad time to replace the head of the state tourism authority. (The crisis is real, and Johnson knows his job, but he’s not the only competent marketer in the state.)
- It’s the last straw after what Tony Vericella did. (What Tony Vericella did, as head of the Hawaii Visitors & Convention Bureau, was expense traffic tickets and x-rated hotel movies, a far greater transgression that actually involved misuse of public funds.)
- Have you seen what Rex Johnson MAKES?
Here we go again — resenting success. Johnson makes a lot of money, and some people keep bringing it up as they discuss these blue emails.
It’s against state policy to store x-rated materials in your office computer even if a fishing buddy emailed it to you. Johnson should get a written reprimand in his file.
You may feel he should get more — suspended for a week without pay, maybe, or even dismissed — but I hope that if you feel that way it is not simply because he makes more than you do (or I).
What would happen to him if he were someone we never heard of, processing hunting licenses at the Department of Land & Natural Resources?
Would an auditor, working on something else entirely, have bothered to report an x-rated email that was never shown to anyone in the office?
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