In beefing up its marketing efforts in tough economic times, the Hawai'i Tourism Authority is making budget cuts that could prove "devastating" to such programs as Sunset on the Beach and free nightly hula in Waikiki.

The state's lead tourism agency is shifting money into marketing as part of an effort to battle the slump in the state's No. 1 industry, hard-hit by months of double-digit declines in the number of visitors.

Yesterday, at its regular monthly meeting, the HTA board approved cutting $2 million in spending for the fiscal year that began in July.

The board is working to pare down its budget to reflect declining revenue from the hotel-room tax. Before the current downturn, the HTA's share of revenue was expected to be $88 million this fiscal year, but the state Council on Revenues has revised that twice — first to $79 million and last month to $75 million.

Yesterday, the board chose to impose spending limits that assume a conservative $71 million budget, requiring 20 percent in cuts to reach that target.

"This process was agonizing," said board member Sharon Weiner, who helped make the trims.

Waikiki Improvement Association president Rick Egged warned board members that eliminating the $1.75 million that helps support Sunset on the Beach movies and the daily hula show and torch lighting at Kuhio Beach could jeopardize those events.

After the meeting, Egged said the HTA provides $100,000 of the annual $336,000 used to run the city-sponsored Sunset movies, popular with both visitors and residents.

Sunset on the Beach movies — originally sponsored by the city — have been paid for by private contributions since 2005. Egged said the movies usually run about one weekend a month, although there have been two at times and some months without any.

The last one was Oct. 11 and 12, in conjunction with the Hawai'i International Film Festival, and the next one is scheduled for Nov. 15 and 16.

Egged said his nonprofit organization — which represents 170 businesses and interests in Waikiki — continues to operate Sunset on the Beach with the support of private sponsors, including Tesoro. He hopes to be able to continue with private support, he said.

But without HTA backing, Egged said, "certainly, it will be dramatically reduced."

And Egged said he's especially worried about the lesser-known Kuhio Beach event.

"The Kuhio Beach hula show has taken place since 1994 in good times and bad," he said. "It symbolizes more than any other single program the effort to bring Hawaiian music and culture back to the streets in Waikiki."

Egged said he can understand that some cuts are needed, "but to eliminate this valuable part of Waikiki that thousands of our visitors enjoy does not make sense."

The board received a committee recommendation to shift $2,513,000 from various programs into marketing. But after hearing from Egged and discussing the potential impact, board member Vernon Char proposed holding $513,000 of the recommended amount in reserve without committing it to marketing.

His proposal was approved.

Interim HTA president Lloyd Unebasami said that by early January, the agency will have half a year of tax revenue records to evaluate before deciding final cuts.

INAUGURAL HOOPLA?

The board also discussed U.S. Rep. Neil Abercrombie's suggestion that the HTA spend money to put on a major Hawai'i show during the presidential inauguration-related festivities for Hawai'i-born Barack Obama.

State tourism liaison Marsha Wienert said the HTA would have to be able to prove that any involvement would be legally permissible, would not be considered political, and would be effective at boosting tourism in a way that would "deliver customers to the state."

Wienert — who was appointed by Republican Gov. Linda Lingle, a John McCain supporter — said: "We've never spent money on an inauguration before."

Board member and former Democratic Big Island mayor Steve Yamashiro noted: "We've never had a Democrat from Hawai'i inaugurated in the past."

In other action, the board began discussing the criteria and job description for a president and CEO to replace Rex Johnson, who was forced to resign after admitting to forwarding pornographic, sexist and racist e-mails from his state computer.

The search committee plans to meet Nov. 20 to discuss the matter further. Yamashiro urged the board to consider what it needs most in a leader and balance an ability to get support from the state Legislature with marketing skill. Even a "super marketing guy" won't matter "if he can't get a dollar from down the street," he said.

Egged urged the HTA board to ask the Legislature to restore a larger share of the revenue from the hotel-room tax. The agency now gets 34.2 percent of that revenue. Originally, it received 37.9 percent but that has been cut to as low as 32.6 percent for a time.

He said lawmakers will be looking for ways to stimulate the economy and may be open to something that would boost the visitor industry at this critical time. "People are being laid off every day," Egged said.