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Sunday, December 21, 2014         

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Tourism optimism growing

Arrivals gained 5.3% in April and spending rose 20.2% despite a drop-off from Japan

By Allison Schaefers

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Strong arrivals and spending from markets outside of Japan have buoyed Hawaii tourism and offset losses from the state's No. 3 visitor market.

Visitor arrivals to Hawaii increased 5.3 percent in April. That gain, coupled with a 20.2 percent rise in visitor spending, is building industry optimism that recovery is again in play.

The Hawaii Tourism Authority reported Tuesday that 581,324 visitors came to Hawaii in April and spent $920.7 million. Strong arrivals from Canada, which climbed 33.7 percent in April, and a 10 percent increase in arrivals from the U.S. West overcame a 23.5 percent decline in Japan arrivals related to the aftermath of the March 11 earthquake and tsunami and subsequent radiation scare. Arrivals from the U.S. East stabilized with a 0.7 percent increase over last April.

For the year ended April, visitor spending rose 17.8 percent to $4.1 billion, while arrivals grew 8.9 percent to 2.2 million visitors. The numbers reflect a sustained momentum that was experienced on all islands, putting arrivals and expenditures on pace with Hawaii's visitor industry's peak years of 2006 and 2007, said Mike McCartney, HTA president and chief executive.

"Looking ahead, we anticipate May to be another strong month with Golden Week charter flights, the beginning of summer travel and the estimated 80,000 room nights generated by the American Psychiatric Association meeting held at the Hawai‘i Convention Center," McCartney said.

Japan is traveling again, said Tomomi Nakamura, a visitor from Tokyo vacationing at the Sheraton Waikiki.

"It's my opinion that a lot of people around Tokyo are very stressed about the radiation and nuclear power plant," she said.

Japanese are being encouraged to resume traveling, and Nakamura said that many will choose Hawaii because it is "a very comfortable place to visit."

HTA numbers and marketing analytics suggest that Hawaii's visitor industry has come back from the Japanese tragedy quicker and stronger than anticipated. Waikiki retailers also report that visitor arrivals and spending are up, said Sean Kinjo, who works in retail at Naillabo Honolulu in the Sheraton Waikiki.

"Business was strong right before the earthquake, then it declined for about a month and now we are seeing it come back," Kinjo said.

More customers are booking nail services, and more of them are asking for add-ons like nail art, he said.

"Customers are spending more," Kinjo said.

Still, many in the state's visitor industry remain cautious.

"It feels like a very fragile recovery," said Barry Wallace, executive vice president of hospitality services for Outrigger Enterprises.

Fluctuating oil prices, fuel surcharges, natural disasters and the many other impacts could affect discretionary spending, including both leisure and business travel, McCartney said.

"No one is whistling Dixie," said Jerry Gibson, area vice president of Hilton Hawaii. "It's nice to see things going in the right direction, but we are going in the right direction very slowly. That's a function of our economy and what's happening in Japan."

While average daily rates (ADR) at Hilton hotels in Hawaii have gone up a few percentage points and group business on Oahu and Maui is picking up, Gibson said the chain's hotels here have not returned to 2006 and 2007 profitability.

"Hotel rates should have been growing about 3 to 4 percent a year, but instead they have fallen about 15 to 20 percent from the peak," Wallace said. "To catch up we'd have to raise rates about 20 to 30 percent. The market can't support that."

Hotel rates, which are not expected to come back for another year or two, and spending have not kept pace with increased costs, said Keith Vieira, senior vice president and director of operations for Starwood Resorts and Hotels in Hawaii and French Polynesia.

"On the expense side we are two to four years behind our 2007 profitability," Vieira said, adding that higher energy, labor and benefit costs continue to plague hoteliers.

The numbers are good for tourists, though.

The strength of the Australian currency against the dollar and desire to escape winter encouraged John and Malina Gregoire of Sydney to bring their sons, 4-year-old Anthony and 2-year-old Ethan, back to Hawaii. The family first vacationed here a year ago, they said.

"Hawaii's a good value," said Malina Gregoire. "It's cheaper for us to holiday here than back at home."






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