By Allison Schaefers / firstname.lastname@example.org
The Hawaii Tourism Authority is doubling its target growth rate for arrivals this year despite declining projections in two other economic forecasts.
The HTA, which manages the state’s tourism budget and establishes tourism policy, set a goal at a meeting yesterday for the state to end the year with 7.5 million visitors, a figure just shy of the record 7.63 million achieved in 2006. The 5.4 percent increase over 2010 is 2.7 percentage points higher than the 7.17 million visitor goal set by HTA in March after the earthquake and tsunami crippled Japan.
"To date, the anticipated loss of business from Japan is less than originally projected, and all other markets continue to exceed previous year-over-year per-person daily spend and arrivals," said Grace Lee, HTA’s tourism brand manager.
However, the state Department of Business, Economic Development and Tourism downgraded overall arrivals growth Wednesday to 3.8 percent from 4 percent this year to reflect a Japan decline. The University of Hawaii Economic Research Organization also is forecasting Japan arrivals by county will fall by as little as 9 percent to more than 14 percent.
HTA economist Cy Feng said optimistic booking information and marketing intelligence affected their projections. UHERO and DBEDT economists base projections on past events, Feng said.
"Our HTA marketers believe that the DBEDT and UHERO data is too pessimistic," he said. "The first few months of the year were very strong prior to the Japan tragedy, and the booking pace appears to be particularly strong for the second half of the year."
In the immediate aftermath of the Japanese tragedy, HTA had estimated year-end arrivals for Japan would plummet 7.1 percent to 1.14 million visitors and that spending would fall 3.2 percent to about $1.9 billion. HTA’s new forecast projects Japan arrivals will grow 3.3 percent to nearly 1.3 million and that spending will rise 8.2 percent to nearly $2.1 billion.
The HTA has funneled some $416,666 into marketing to Japan, Lee said. Follow-up calls and meeting with airlines and tour operators will take place in Japan from Monday through Wednesday, she said.
"Discussions will center on restimulating the market for travel in the second half of the year, and receiving updates on additional charter services for summer and fall," Lee said.
HTA’s marketing contractors in Japan have said that eight major tour operators are selling tour packages for the "Aloha Heaven Concert" taking place here June 26. Hawaii could attract summer travelers when large Japanese corporations participate in mandatory power outages to conserve energy, they said. Japanese corporations may lengthen the August Obon holiday, as well.
Successful marketing blitzes in Phoenix, Dallas and Denver have raised HTA expectations for North America. The HTA increased its U.S. West arrivals projection by 1 percentage point and its spending projection by 1.1 percentage points. The U.S. East arrivals projection was increased by 1.7 percentage points and its spending projection by 2.2 percentage points. U.S. West arrivals are now projected to grow by 3 percent to more than 3 million, and spending by 6.8 percent to $4.3 billion. HTA’s projection for the U.S. East is a 2.8 percent increase in arrivals to nearly 1.7 million and a 9.9 percent spending increase to $3.2 billion.
HTA boosted its arrivals projection for Canada by 7.3 percentage points and its spending projection by 10.9 percentage points. Arrivals from Canada are now expected to increase 12.9 percent to 448,081 visitors, and spending is forecast to rise by 19.7 percent to $885 million.
"The projections feel about right," said Barry Wallace, executive vice president of hospitality services for Outrigger Enterprises. "We had a very strong first quarter up until the events in Japan, coupled with gas prices, caused a lull in the second quarter."
Wallace said overall tourism fared better than expected and that the Japan decline seemed to be limited to group business at a few hotels, rather than the whole state.
Even so, it’s an optimistic forecast, said Keith Vieira, senior vice president and director of operations for Starwood Hotels & Resorts in Hawaii and French Polynesia.
"I think it’s still to early to tell what the rest of the year is going to look like," Vieira said. "Prior to about two weeks ago, the airfares were higher than some visitors expected, and we heard concerns about the prices."
Bookings have picked up as prices have come down, said Jack Richards, president and chief executive of Pleasant Holidays LLC, Hawaii’s largest wholesaler.
"We’ve had a double-digit increase in summer bookings, and spending is up 9 percent," Richards said. "Hawaii is tracking better than Mexico and equal to the Caribbean. My sense is that higher fares to Europe also have caused some visitors to chose Hawaii."
by Alan Yonan Jr. / email@example.com
The strength of the state’s economic recovery this year will vary from county to county, with Honolulu County and Hawaii County suffering disproportionately from a decline in Japanese visitors, according to a report released today by a group of University of Hawaii economists.
Despite the uneven nature of the recovery, however, the overall outlook for Hawaii’s economy remains positive, according to the report from the University of Hawaii Economic Research Organization.
“As anticipated, the climb back for Hawaii’s counties is proving to be challenging but the direction at least is clearly upward,” the authors of the report wrote.
The biggest increase in visitor arrivals this year will be in Kauai County (6.6 percent) and Maui County (6 percent), which are better positioned to capitalized on increases in visitors from the mainland and Canada, according to the report.
“Visitor industries on Oahu and the Big Island will suffer a setback from the drop in Japanese visitors in the aftermath of the March 11 earthquake,” the report said.
UHERO is forecasting Oahu to experience a 10.5 percent decline in visitors from Japan this year, with the Big Island taking a
14.4 percent hit. Overall visitor arrivals are expected to increase by 1.3 percent on Oahu and by 5.1 percent on the Big Island.
When the state’s economic recovery began taking hold last year, the improvement was limited mostly to the tourism industry, “but we think this year’s story will be a broadening and deepening of growth throughout the economy, not rapidly but nevertheless leading to appreciable gains in jobs and income for many residents,” according to the report.
“Conditions will strengthen further in 2012, although unemployment will remain a problem in the neighbor islands for a number of years.”
The construction industry, one of the sectors hardest hit by the recent recession, shows the most promise on Oahu because of the planned rail project, the report said.
“The beginnings of rail mass transit work will support an acceleration of construction job growth on Oahu over the next few years,” the report said. “While neighbor island construction will also begin to turn around, conditions will not warrant a rapid upturn in either residential or commercial construction.”
Except for Kauai, which had a small gain in payroll jobs last year, UHERO is forecasting that 2011 will mark the first time since 2007 that all counties will see an increase in jobs.
Personal income is expected to continue strengthening after posting modest gains in most counties last year.
UHERO said the biggest “downside risks” to its forecast are the potential for higher oil prices and the chance that Japan’s disasters could have a more severe impact on Hawaii’s tourism than is currently expected.
“While the travel industry appears to have weathered well recent oil price increases, a further rise in prices above current levels could short-circuit the tourism upturn that has been at the heart of the ongoing recovery,” according to the report.