Hawai'i's booming tourism industry likely will generate an additional $12 million from the hotel tax in the coming year, and state tourism officials want to use $5 million to set up an emergency response fund.

The fund could be used to counter the negative marketing effect of events such as the Sept. 11 terrorist attacks and the SARS outbreak.

"Marketing after a disaster is crucial to the continuation of successful tourism," said Betsy Morrigan, owner of Big Island tour operator Hawaii Pack and Paddle, which suffered a drop in business after the Oct. 15 earthquakes. "The problems of the last disaster and a disaster of many times that magnitude would disturb tourism immensely."

The state's tourism marketing agency, the Hawaii Tourism Authority, plans to seek state lawmakers' permission to set up the $5 million emergency trust fund. The money would come from the authority's operating budget, which is expected to grow to its highest level ever in the fiscal year that begins July 1, largely because of higher hotel, or transient accommodations, tax revenues.

The state is expected to collect $243.7 million in transient accommodations tax revenue in the coming fiscal year, up about $12 million from this year, the authority said. The authority is set to receive about $84 million of that to use in marketing Hawai'i as a tourist destination and other initiatives.

The $5 million emergency fund would be used to respond to events that may substantially interrupt the tourism industry, such as world conflicts, terrorist threats, labor disputes, natural disasters or disease outbreaks. The governor would have to declare that an emergency exists. The HTA could then spend the money on public relations, advertising and assisting visitors.

"We've talked about this for a long time," said David Carey, president and CEO of Outrigger Enterprises Group. "We've had such prosperous times we often forget how hard it is when things go wrong.

"I was in the group that went to the governor's office and the Legislature after 9/11 (for help) ... and we had to dig deep and find money from difficult places in order to do the job that needed to be done. What seems to be prudent is to anticipate a situation like that and have a rainy day fund lined up in the event that something like that happens."

Hawaii Tourism Authority president and CEO Rex Johnson said it makes sense to have some money in a place where you can easily get to it in an emergency.

"When you go through a year like 2006 has been and you have a couple of what could be considered to be emergencies, although neither one of them were catastrophic, you start to think about what if there was a catastrophic one and where would you find the money to do whatever you needed," Johnson said.

Lowell Kalapa, executive director of the Tax Foundation of Hawaii, said he has no problem with the authority setting up an emergency fund, because "this money was supposed to go for tourism promotion anyway."

But he cautioned that such legislation needs to outline definitive purposes so it doesn't become a slush fund.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.