2011 looks to finish on a high

Hawaii’s visitor arrivals and spending continued to rise last month, putting the tourism industry on track to finish 2011 with its best performance in four years.

The number of visitors rose by 2.6 percent in November from the same month a year earlier, boosting arrivals to 6.6 million through the first 11 months of 2011, according to a report from the Hawaii Tourism Authority.

Spending rose by 8.2 percent for the month, bringing the year-to-date expenditures to $11.28 billion, the HTA said.

If arrivals continue to grow at the current pace in the final month of the year, the annual total would be the highest since 2007 when 7.5 million visitors came to Hawaii.

Growth in visitor spending is on track to be the highest since the $12.6 billion spent in 2007.

HTA officials said the Asia-Pacific Economic Cooperation meeting, as expected, provided a boost to Hawaii’s visitor industry in November, although they did not quantify the precise numbers of arrivals or spending.

"While the direct economic impact from the event is currently being analyzed, the HTA is working with our industry partners and stakeholders to capitalize on the momentum following APEC," said Mike McCartney, HTA president and chief executive officer. "Hawaii’s hosting of APEC was an investment in our state’s long-term future and sustainability of Hawaii’s tourism economy."

The HTA’s regular data-gathering effort likely missed many of the government officials and other APEC participants who arrived in private airplanes, McCartney said.

Also, ancillary business spending on things like security, private parties and equipment rental fees would not have been captured by HTA’s standard visitor questionnaire, he said.

McCartney said the HTA’s outlook for 2012 is for continued solid growth, with a shift to a larger proportion of visitors from the Asia-Pacific region. The agency will look to capitalize on opportunities presented by new flights from around the region by Hawaiian Airlines, Air Australia and Asiana Airlines, he said.

"Our people, place and culture create a unique experience which is our competitive advantage. The Hawaiian Islands brand and our island values provide strong one-of-a-kind experiences that will help us to be successful in the 2012 global economy," McCartney said.

While the solid visitor numbers this year are good news for hotels, the industry still has a long way to go to return to the profitability it enjoyed before the 2008-2009 recession sent tourism into a tailspin, said Keith Vieira, senior vice president and director of operations for Starwood Hotels & Resorts in Hawaii and French Polynesia.

Hoteliers and other visitor-related businesses, which were forced to drop rates for much of 2009 and 2010 to stimulate demand, have been pushing up prices this year to boost profits.

"Our biggest challenge is to grow back profits because otherwise we can’t afford to reinvest in our properties," Vieira said. "Hawaii is more expensive than some of the other visitor destinations, but people know they get what they pay for here."

Vieira also said the tourism industry’s vulnerability to external shocks, like Japan’s natural disasters or the European debt crisis, highlights the importance diversifying its revenue base.

"Attracting APEC and other meetings from the region is important to diversification," he said. "We’re also tapping new Asian markets, like China, Korea, Taiwan and Singapore. We have to make sure we get a diversified group."

Jerry Gibson, area vice president and managing director for Hilton Hawaii, said he expected brisk business at the company’s Hawaii properties to continue in the near term.

"This year’s numbers have been enhanced by the exchange rates of various currencies," Gibson said. "Our visitors are finding value for their money here in the islands. Looking ahead, the first quarter of 2012 looks strong. The wholesale market continues to trend positively, and we’re getting signs of increased travel from China and Korea."