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Industry anticipates rise in tourism

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All of Hawaii’s major tourism markets are projected to increase arrivals next year as the state moves back to its 7 million visitor benchmark and most sectors, save for China, Europe and cruise ships, are expected to exceed their 2010 targets.

While there is room for optimism, the visitor industry must monitor conditions that could affect the state’s lead economic driver as it moves toward a new beginning, said David Uchiyama, the Hawaii Tourism Authority’s vice president of brand management, during remarks yesterday at the second day of the organization’s annual conference.

The industry needs to regain airline seat capacity, compete better against other destinations and enhance the Hawaii experience for its visitors, Uchiyama said. Further slowing of the domestic economy, changes in currency exchange rates, labor negotiations between hotel workers and managers, the climate for commercial real estate refinancing and the price of oil, which is creeping into the $80-a-barrel range, could hurt the industry, he said.

Uchiyama said industry officials continue to work on capacity, "but remain very aware that there are a lot of hurdles. We are picking up momentum, but there is still more to accomplish and overcome."

Between 2006 — the peak year for capacity — and 2010, the state lost about 1.2 million air seats, falling to 8.67 million in 2009 from 10.36 million in 2006. However, they are expected to rebound to 9.14 million by the end of the year.

Here is a look at what to expect this year and next:

» The U.S. West is expected to finish 2010 ahead of target at 2.84 million arrivals. Next year, the authority has set a target of 2.89 million visitors, but will have to guard against competition from Mexico and the Gulf Coast.

» Mostly one-stop air service combined with greater economic slowdown is affecting the U.S. East market, projected to finish 2010 at 1.56 million arrivals. While that is ahead of target, next year’s goal is only 1.58 million.

» Canada, benefiting from strong currency, renewed air capacity and favorable island prices, should end the year ahead of target with 384,707. The goal is 392,401 arrivals in 2011.

» Despite big cuts in seats, Japan remains an important sector and is expected to finish the year with 1.23 million arrivals, slightly above the 2010 target. In 2011, the goal for Japan is 1.26 million arrivals due in part to added air service from Haneda International Airport.

» Increased air service between Oceania and Hawaii are needed for growth from Australia and New Zealand. The market is projected to finish the year ahead of target with 171,173 arrivals and is expected to grow to 178,322 in 2011.

» Visitors from Europe will likely fall below expectations to 106,733 visitors by year’s end and are projected to increase to 107,000 in 2011. Although moderate economic recovery is taking place in Europe and the pound and Euro remain stable, distance and cost remain deterrents.

» Although South Korea is still a relatively small market, arrivals are expected to surpass the target by 29,000 and end the year at 95,000. In 2011, the hope is to draw 110,000 visitors.

» An arduous visa process and lack of direct flights is expected to cause China arrivals to fall below expectations. By year’s end, the agency expects arrivals to reach 63,340 and aims to draw 85,000 in 2011.

» Hawaii’s cruise market is expected to fall short and finish the year with about 96,507 passengers who are part of 459 port calls. Next year, the goal is for 119,029 passengers as part of 470 port calls.


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