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Visitor spending catches a wave

By Kristen Consillio

POSTED:
LAST UPDATED: 09:44 p.m. HST, Nov 05, 2010


Hawaii's tourism industry showed further signs of recovering from a two-year slump as visitors to the state spent 22.2 percent more than a year ago in September, pushing total expenditures in the month to $880.2 million.

The number of arrivals increased for the 10th consecutive month as hotel operators and tourism-dependent businesses extended deals to lure more visitors to the islands.

That helped the industry continue its summer momentum with 538,516 visitors in September, an 8.9 percent increase over the same time last year, the Hawaii Tourism Authority reported yesterday.

"Overall, we are pleased to see year-over-year growth in visitor arrivals and spending during the traditionally slow month of September," Mike McCartney, HTA president and chief executive officer, said in a statement.

VISITOR ARRIVALS

The number of visitors arriving in Hawaii by air in September with the percentage change from the same month last year:
  VISITORS PCT.
Domestic 363,567 +9.1%
International 164,737 +8.6%
Total 528,304 +8.9%
Grand total * 538,516 +8.9%
 
BY ISLAND
Oahu 345,365 +5.4%
Kauai 73,621 +3.0%
Lanai 5,539 +17.4%
Maui 151,765 +12.6%
Molokai 4,178 +18.1%
Big Island 92,214 +8.8%
* Includes ship arrivals Source: Hawaii Tourism Authority
Expenditures for the first nine months of the year totaled $8.4 billion, a 13.5 percent jump over the same period in 2009. Tourism officials expect to reach their $10.8 billion tourism spending goal this year.

The increase in arrivals nonetheless comes off a weak year when the industry experienced some of the lowest points of the economic slump.

"2009 was a horrible, horrible year," said Sam Shenkus, marketing director for Royal Hawaiian Center, where year-to-date sales are up 18 percent compared with last year, when a quarter of its shops were closed for construction.

In addition to more visitors, average daily spending in September rose 11.5 percent to $185.60 even though the average length of stay remained flat at nearly nine days.

U.S. West arrivals were up 13.5 percent, and Canadian arrivals jumped 13.3 percent, though the U.S. East and Japan were down slightly at minus 0.7 percent and minus 0.4 percent, respectively. Total expenditures from all visitors traveling by air were up during the month. U.S. West expenditures jumped 24.9 percent, U.S. East rose 6.4 percent, Japan increased 17.3 percent and Canada soared 24.5 percent.

However, not everyone is seeing high increases in spending.

Keith Vieira, senior vice president of operations for Starwood Hotels & Resorts-Hawaii & French Polynesia, said Starwood's four major Waikiki hotels are seeing modest 5 percent to 10 percent increases in retail and food and beverage sales.

"We still think things are fragile," he said.

The Starwood hotels, which heavily discounted rates over the past year, have started to put higher-priced packages in the market and are awaiting customer acceptance, Vieira said.

"These things have to be slowly fed into the market," he said. "We don't want to stop momentum, but we have to see some increase in visitor spending in package buying. We've got to get back to profitability."

GAINING STRENGTH

The monthly total arrivals and percentage change in visitors to Hawaii:
2010
MONTH ARRIVALS % CHANGE
September 538,516 +8.9%
August 680,496 +11.8%
July 680,743 +9.0%
June 625,522 +13.6%
May 549,954 +6.5%
April 552,059 +1.9%
March 607,709 +9.3%
February 531,094 +0.7%
January 532,737 +2.0%
YTD total 5,298,830 +7.2%
Source: Hawaii Tourism Authority
Jeff and Tammy Kievit of Los Angeles said the deals on lodging, airfare and their rental car are what attracted them back to Hawaii for the third time.

"We had a couple choices and we chose Hawaii," Jeff said. "There's a lot of deals, plus with the value of our dollar, we can buy more here in the U.S. than we can in Europe."

While the state is "getting close to where we should be in terms of arrivals," expenditures are still lagging behind the growth in air seats to Hawaii, said Jay Talwar, senior vice president of marketing for the Hawaii Visitors and Convention Bureau.

"It's growing, but we still got some work to do," he said. "Part of it is the industry in Hawaii is providing value to a greater degree than they did in year's past."

Talwar attributes part of the boost in arrivals to more than double the amount of North American marketing blitzes. HVCB had seven campaigns this year, compared with three in 2009. It has another seven planned for 2011.

Marsha Wienert, state tourism liaison, said continued economic challenges and the value that consumers are demanding are what is holding down rates in accommodations and tourism-related businesses.

"The recovery has started, it's slow and we expect it to continue to be a slow recovery as we move forward," she said. "As much as we want to shout at the top of rooftops, 'Hurrah,' we still have a ways to go to get back to where we were to sustain Hawaii's economy and grow it even further because the visitor industry is such a large part of our economy."

BIGGER SPENDERS

The monthly visitor expenditures of visitors to Hawaii and the percentage change from the year-ago period:
2010
MONTH SPENT % CHANGE
September $880.2M +22.2%
August $1.1B +30.0%
July $1.1B +23.3%
June $948.9M +16.1%
May $861.4M +15.9%
April $765.8M -0.7%
March $877.2M +10.2%
February $853.5M +0.8%
January $985.8M +4.1%
YTD TOTAL $8.353B +13.5%

Source: Hawaii Tourism Authority






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