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HTA chairman makes strong case for value of tourism

By Mark Coleman mcoleman@staradvertlser.com
Posted January 08, 2016

Rich Fried

L. Richard "Rick" Fried Jr. is perhaps best known as one of Hawaii's leading personal injury attorneys, but more recently has become a leading figure in the state's tourism industry, as chairman of the Hawaii Tourism Authority board.

The agency, which directly employs 20 people, oversees much of the state's tourism-promotion efforts, including running the Hawaii Convention Center through its Hawaii Visitors and Convention Bureau.

HTA's annual budget is now about $93 million, which it uses mostly to market Hawaii worldwide as a tourism destination. It also funds programs that perpetuate Hawaiian culture and help tourists who have experienced misfortune while here.

Fried was appointed to the HTA board in 2012 and elected its chairman in July, succeeding Aaron Salas.

Fried visited Hawaii as a teenager, but actually moved here in 1967; he was based at Hickam Air Force Base as a navigator for cargo planes during the Vietnam War era.

A law school graduate from the University of Arizona, where he also earned a bachelor's degree in business, he was offered a law firm job here by attorney Dan Case, though he continued with the Air Force as a reserve officer, retiring as a lieutenant colonel in 1995.

In 1973 he started his own law firm, with three others, in the Davies Pacific Center, where the firm, now known as Cronin, Fried, Sekiya, Kekina & Fairbanks, now occupies an entire floor and is the largest plaintiffs injuries firm in the state.

The recipient of many legal honors, he has been active through the years with many nonprofit organizations, and has long been a nationally ranked tennis player in his various age categories. He is married to the former Susan Simonian, with whom he lives in the Diamond Head area.

Question: How did you get involved with the Hawaii Tourism Authority?

Answer: I'd known Gov. Neil Abercrombie, and at some point he asked me if I'd be interested in serving on the board of the HTA. I gave it a fair amount of thought, and then felt, you know, that I was both honored and excited to think that I could contribute in some way to what is clearly the driving engine in our economy.

Q: How many of the others on the board are holdovers from Gov. Abercrombie?

A: I'm not exactly sure. But I can say this about the board: I've been on a number of other boards ... and what I found with the current board is that it's as collegial as any I've ever served on. They're very involved, but no one's in there to put on a show. It's a treat to be the chair.

Q: What is the role of the board?

A: We meet monthly to discuss a broad range of issues, including new areas in which we should continue to either innovate or expand. Since I've been chair, and since George Szigeti and Randy Baldemor have come on (as HTA president and chief operating officer, respectively), we're going into great detail on the finances. They both have business backgrounds, and I've been involved in things outside the law (profession) to some extent, so we go through that.

We talk about our major market areas, about issues to keep Hawaii in the forefront of tourism, how we can separate ourselves from other places that are warm.

We're still fortunate: The stats demonstrate that we are the safest big city in the country, and that's a big plus for us.

And we talk about having to change our model to keep up with the changing tourism market.

For example, there are now more millennials than baby boomers. Millennials spend money, and that's obviously important, because that drives the economy, and we only have so many seats on the beach, particularly on Oahu.

Q: How much do you have to check in with the governor? And do you all share the same vision?

A: Well, I think we get direction from the governor and Mike McCartney (Gov. David Ige's chief of staff), who was the authority's CEO when (I first joined the board) ....

We also have a lot of contact with the Legislature, because they are very curious as to the way our budget is being spent.

Q: What is your vision for the industry?

A: I'm certainly in favor of expanding our markets.

For example, we have new marketing contractors for China, Korea, Europe and now Southeast Asia, which is a brand new market.. .. And the reason I feel it's important we open more and more markets is that with all the excitement in the world, certain areas could all of a sudden really disappear as tourism destinations.

Q: Like Europe?

A: Exactly.

Q: Were you a little nervous, then, when Rep. Tulsi Gabbard was talking about the visa-waiver issue in relation to terrorism?

A: It's a concern, and I understand her position. I've got a lot of respect for Tulsi, but if we do eliminate the visa waiver, hopefully they will limit it to the areas where there are potential problems.

Q: Can Hawaii ever have too many tourists?

A: It can. I'm not sure that point is imminent. But we have to change the model somewhat, because the younger tourists, the millenniaIs, want more of an experiential type of tourism.

Q: Doesn't that experiential type of visitor go along with the fact that more people are staying out in the bed-and-breakfast homes and transient vacation units, and kind of moving out of the hotel zones?

A: Well, there's a reason the Airbnb and VRBOs (vacation rentals by owner), have grown, particularly on Oahu, because there seems to be that need .... Obviously we want them to pay their share of TAT (the state's transient accommodations tax), just so there's a level playing field. And, you know, they need to have the same safety mechanisms in place that the hotels do. You know, warnings, insurance -the things that come to mind as a trial lawyer.

Q: Those "experiential" visitors now also are spreading out to the neighborhood beaches, and besides Kailua, there now are complaints about beach overcrowding in Waimanalo, and Oahu's North Shore seems totally maxed out.

A: Those are issues, but the important thing is that tourism is such a major player in Hawaii's economy. Unlike many places, it's clean; it's not like steel mills in Pittsburgh or something.

Q: Would you agree that the tourism industry has the extra benefit, somewhat ironically, of helping keep Hawaii's "aloha culture" alive?

A: I think it does, because one of the reasons that people come here -a major reason -is our sense of place and our very unique culture.

Q: The HTA actually funds such programs, right?

A: In major ways -$1 million for Hawaii cultural initiatives. It's a major part. And when our major market people are presenting to us, whether it be in China or Japan or Taiwan, the culture of Hawaii is the thing that is emphasized -not only Hawaii's beauty, which is, of course, unique in the world.

Q: Why do you need government support for tourism at this point -if it ever needed it? Do you think tourism here could survive adequately on its own?

A: I don't. And I say that because there are so many places in the world, the competition is getting really, really incredible, from places that you normally wouldn't have thought of.... And for the tiny amount we spend relative to what it brings into our economy, which is almost $15.5 billion every year, and taxes of almost $1.7 billion, through TAT and GET (general excise tax), it's ...

Q: $1.7 billion through TAT and GET?

A: Right. So, when tourism suffers, we all suffer. It provides a great number ofjobs.

I think we're all aware there has to be a balance. But it'd be nice ifwe really did have the problem where there are too many tourists. I don't think we're anywhere near that, at this point.

Q: I remember back in the early '80s people here were saying, "Oh, jeez, this year we're going to have 4 million visitors, and now here we are at 8 million, and it seems there are tourists everywhere, yeah?

A: Well, it has increased, and it's also playing a bigger role in driving our economy. I mean, our unemployment, we're about the lowest in the country. And can you image if we didn't have tourists? Instead of 15 to 20 choices to get to L.A. or San Francisco ...

There are major benefits to both the locals and the tourists. It helps nonprofits, it helps restaurants, it helps services.

Q: What's your thought about that planned investment out in Kapolei, by the Chinese -$1 billion for two high-end hotels and 450 homes?

A: I think diversification is good. But we're not set up very well for the Chinese. We have a tiny number coming in, which is increasing percentage-wise significantly, but I think having two apparently very high-end hotels to cater to the affluent Chinese on that area of the island will diversify and give them a comfort level that Japanese tourists have had for a long time.

Q: What do you think the rail might do to the general ambience of Oahu? ... Are you a supporter of the rail?

A: Well, I've not personally been a great supporter of the type of rail that we've got. I understand the horse has left the barn, and we'll have to deal with it the best we can, and I know the mayor is very sensitive to the expenses that seem to keep increasing. It will be an option for tourists to use. But it's going to be a difficult time we're all going to have to live with while it's being constructed, particularly as it heads to the populated areas downtown.

Q: What do you know about the interisland airline situation, ... which these days seems to be just Hawaiian Airlines and two or three little ones.

A: Well, there has been discussion about some of the other airlines providing interisland service. But that's still in the discussion stage.

Q: You mean like United Airlines or something?

A: Potentially. There's been that discussion, but it seems to be quite a ways away.

Q: One issue that brought HTA into the news recently was this SNAFU with the U.S. women's soccer team, which prompted somebody to suggest there should be separate agency for sports tourism. What do you think about that?

A: Well, let me talk first generally about sports tourism, because that's one of my focuses. I've been involved in tennis - I was No.1 in the state before you were born - and I would like to think I had something to do with getting the Federation Cup here. That will be in February and we may be lucky enough to get the Williams sisters against a very good Polish team. Then we have a shot at getting the Davis Cup on Maui (in 2016) ....

We also have four pro golf tournaments.... We have the Ironman. We sponsor the XTERRA World Championship. We have the two basketball tournaments, the Pro Bowl, the Hawaii Bowl; we have Rugby Union and Rugby League events, the Kauai Marathon, the Duke's Oceanfest. And then in the convention center we're looking at bringing in volleyball courts for these major high school and ...

Q: Inside at the convention center?

A: Absolutely. And we're even looking at things like table tennis.

Q: These are all events that HTA would put up some money for?

A: Correct, and that's what we are doing. And I think that's money well spent.

Q: OK, so what about the idea that a separate agency is needed? Why can't HTA just do that?

A: Well, I'm sure people at the (state) Capitol will have their own thoughts on this.

Q: Are you recommending that you keep it among yourselves?

A: We seem to be doing a pretty good job. We seem to be the place when people have an interest that they come to. And, you know, it's already existing.

Q: HTA has a position for that, but it's empty right now, right?

A: Actually, that position specifically sunsetted as of the end of 2015. That's why George Szigeti and Randy Baldemor themselves - which I think is more efficient ­- will be directly involved. You know, George was a professional surfer. And Randy was very high-level tennis player.

Q: You really like tennis, don't you? Are you still playing it?

A: I do. I was playing in an "old man's" match in Mexico City for the U.S. just early last year (2015).