Hawaii achieved its 11th consecutive month of increased visitor spending and arrivals in January, and the outlook for a continued rebound is good as long as rising oil prices do not hurt the airline-dependent market.
Hawaii hosted 597,487 visitors last month, up 12.2 percent from a year ago, as arrivals from all major markets increased, according to preliminary statistics released yesterday by the Hawaii Tourism Authority. Arrivals from Canada grew 18.8 percent, the most of any market. Arrivals from Japan rose 18.7 percent, and they increased 12 percent from the U.S. West and 9.4 percent from the U.S. East. Cruise ship arrivals, which represent a much smaller portion of the market, saw a 22 percent rise.
Likewise, visitor spending rose 19.8 percent to $1.2 billion. January’s gain represented the ninth consecutive month of double-digit increases in overall spending.
"The sustained momentum is encouraging, but there continues to be many factors that can disrupt the recovery of Hawaii’s tourism economy," said Mike McCartney, HTA president and chief executive officer.
Fuel prices, which have a direct impact on airfares and discretionary spending, are among the most critical issues facing tourism, McCartney said. Some 98 percent of January arrivals came by air, an indicator of the market’s dependence on a stable airline industry and oil prices.
Hawaii’s dependence on air travel was further evidenced by the benefit it realized when Japan Airlines switched to larger aircraft, McCartney said. It drove domestic demand when United Airlines started direct service to Hilo from Los Angeles and San Francisco, and Alaska Airlines announced new daily service from Oakland and San Jose, Calif., to Maui, he said.
Petra and Marc Kirberg, who recently visited Oahu from San Francisco, are proof market momentum is continuing. They said that they’ll return even though they have made more than 18 trips here between them and their children, 5-year-old Beck and 3-year-old Vaughn.
"This is a place where all the stars align," Petra Kirberg said. "We love Hawaii. It’s safe and clean, and we don’t worry about anything happening."
Still, some members of Hawaii’s visitor industry have begun to worry that oil prices could dampen even Kirberg-level enthusiasm. There are signs rising oil prices and airfares have begun to change the market, said Jack E. Richards, president and CEO of Pleasant Holidays LLC, Hawaii’s largest wholesaler.
The Associated Press reported that oil prices shot as high as $103 a barrel yesterday as chaos in Libya disrupted crude supplies from the OPEC nation, and traders worried instability could spread to other oil-rich countries in the Middle East.
"We are getting to the point where prices will start to impact travel," Richards said. "Fuel surcharges from Asia are in the $200s, and we saw domestic airfares rise by $40 over the weekend."
January’s momentum likely will continue into February and March since most of these bookings locked in rates before the oil price volatility started, he said.
"Looking further out, oil prices are the wild card," Richards said.
As a result, Pleasant Holidays has rolled out summer specials with prices more often seen during downturns rather than rebounds. The wholesaler is offering $150 summer airfares for children accompanying adults to Hawaii. Travelers who book with the wholesaler’s luxury branded Hawaii World subsidiary will get $500 off airfare and complimentary Avis luxury rental cars in certain suite categories.
"We are greatly concerned of how oil prices will impact travel in May, June and July," Richards said.
When oil prices peaked at $145 a barrel in 2008, Hawaii suffered, he said. Some customers put off booking long-haul trips, Richards said. Others chose to come to Hawaii for shorter stays or booked less expensive properties and fewer activities, he said.
Hoteliers also are concerned about oil’s impact on booking pace, said Keith Vieira, senior vice president and director of operations for Starwood Hotels & Resorts in Hawaii and French Polynesia.
"The market is still driven by specials," Vieira said.
"We can’t pull the plug on the specials or the market will dry up."