February tourism rise brings $1.3B to islands

February was a month to love for Hawaii’s visitor industry, which saw arrivals and spending continue to climb.

Visitors to Hawaii in February rose nearly 2 percent to 700,426 and spending increased nearly 8 percent to $1.3 billion, according to preliminary data released Wednesday by the Hawaii Tourism Authority. The agency reported that there were 230,544 visitors on any given day in February with a combined daily spending of $47.8 million.

“What’s most impressive about February’s results is how strong daily visitor spending was from Hawaii’s four largest markets and how that overall impact was transferred to all islands,” said HTA President and CEO George Szigeti in a statement. “Altogether, tourism poured $1.34 billion into Hawaii’s economy; a $95 million increase over last February that is even more remarkable considering it (2016) was a leap year month with one extra day.”

These results were achieved even though the number of air seats serving Hawaii in February 2017 declined just over 1 percent to an average of 32,582 seats per day and arrivals from Hawaii’s core U.S. West market were roughly flat at 261,244 visitors.

Arrivals growth came from the U.S. East, which rose nearly 5 percent to 159,783 visitors, and Japan, which rose nearly 6 percent to 123,577, along with cruise ship traffic, which increased 178 percent to 13,404 visitors. However, arrivals from Canada, which used to be a strong winter market for Hawaii, fell 5 percent to 55,405 and arrivals from a category that combines all international travelers from markets outside of Canada and Japan fell just over 7 percent to 87,012 visitors.

Total spending by visitors from the U.S. West rose 13.3 percent to nearly $470 million, while total spending from the smaller domestic market, the U.S. East, climbed 10.2 percent nearly $358 million. Spending from Japan, Hawaii’s top international market, increased just over 10 percent to nearly $176 million and spending from the mature Canada market rose just over 7 percent to nearly $124 million.

February’s results helped push year-to-date arrivals up 3.3 percent to just over 1.4 million visitors and their spending up 9 percent to nearly $3 billion.

“In the first two months, $344 million has been generated in tax revenue for the State, which is $28.4 million, or 9 percent, more than last year,” Szigeti said in a statement. “We are thrilled with these results through the first two months of 2017, but are not taking this success for granted. Intensive marketing and promotional efforts are continuing in our global markets to maintain Hawaii’s positive momentum.”

Despite strong February results, some in the industry are concerned about softening, said Kelly Sanders, area managing director, Marriott Hotels and Resorts Waikiki.

“Overall February was another good month as it relates to visitor arrivals and demand, but long-running demand has seen a sharp decline in March, April and May with a softness in demand being felt throughout the islands,” Sanders said. “Things are not looking to be as cheery as we have seen over the past few years.”

Jack Richards, president and CEO of Hawaii’s largest wholesaler, said he expects first-quarter gains will continue throughout the year.

“We’ll be relatively flat in March because the Easter holiday is in April. However, we’re expecting double-digit growth for Hawaii in April through the rest of the year,” said Richards, whose company caters mainly to North American travelers, whose top isle pick is Maui. Richards said the wholesaler is seeing leisure travel upticks in every market that it serves, from long-haul Europe to nearby Mexico.

“We saw a bounce from the strong stock market and housing market. People started spending money after the January and February gains. The real estate market in California is up double digits. The wealth affect allows people to travel more,” he said.

Relatively low hotel price hikes and stable airfares along with new inventory also are stimulating Hawaii bookings, especially in the upscale to luxury markets, Richards said.

“I see no major issues in 2017, the only wild card would be oil prices. Other than that, it looks really good. There’s a lot of quality inventory,” he said.

Keith Vieira, principal of KV &Associates Hospitality Consulting LLC, said Oahu, and Waikiki in particular, have benefited from new hotels and redevelopment, especially with properties catering to millennials.

“We are strong with the 45-year-old-plus traveler, they know Hawaii through TV shows and movies and the war. Our biggest challenge is getting loyalty from the millennials. All of the new younger more hip products will drive millennials,” he said.

The hotel improvements, especially along Kuhio Avenue, also have bolstered Waikiki’s hotel pricing.

“Waikiki only has seven hotels on the beach,” Vieira said. “The renovations have helped to bridge the price gap.”