State tourism agency predicts huge influx

If you thought last year was a strong one for Hawaii tourism, you should be blown away this year when an additional 500,000 visitors arrive, pumping $1.5 billion more into the economy.

That’s what the Hawaii Tourism Authority expects to see, according to a new projection for 2013 released Wednesday. The HTA anticipates a record 8.5 million visitors will come and spend $15.8 billion.

The forecasts, which were revealed during a spring marketing update, represent a 6.3 percent gain in visitors and a 10.7 percent rise in spending over the 2012 record-setting numbers.

Tourism is so robust that the HTA is constantly having to revise its forecasts higher.

Its new forecast is about 4 percent higher than an 8.17 million arrivals projection set by the HTA in July and about 6 percent higher than its earlier $14.88 billion spending forecast.

"All of our markets performed exceptionally well last year," said HTA Vice President of Brand Management David Uchiyama. "Since our last review in July, we’ve seen incremental gains in each market and we expect more gains based on opportunities created by seat growth and market demand."

Nearly 8 million visitors came to the state in 2012, topping the previous high of 7.6 million in 2006, the HTA said. Total visitors in 2012 were up 9.6 percent from 7.3 million in 2011. Visitor spending for the year hit $14.3 billion, surpassing the previous full-year record of $12.8 billion in 2007.

"It’s a sure sign of a cyclical upswing that since 2009 visitor arrivals forecasts have consistently been revised upward," Paul Brewbaker, principal of TZ Economics, said at a tourism forum hosted on Jan. 31 by the Pacific Asia Travel Association and the Travel and Tourism Research Association.

Brewbaker’s 2013 arrivals forecast is slightly higher than HTA’s latest estimate. He expects visitor arrivals could grow 7.29 percent to 8.58 million this year.

To be sure, Hawaii kicked off 2013 with a 5.9 percent gain in January arrivals and a 5.7 percent rise in non-seasonally adjusted spending. Some Oahu hoteliers were reporting 100 percent occupancy rates on busier days in March and some travelers have faced crowded conditions.

"Oahu was busier than I expected having been to Maui," Janet Pugh, a visitor from London, said Tuesday as she and her husband, Philip, strolled past throngs of beachgoers.

However, the couple said the boom did not mar their holiday enjoyment.

"It was exactly what we wanted," Philip Pugh said. "We still found rest and relaxation." 

Strong demand from international and domestic markets, coupled with airlines adding more seats, is expected to keep Hawaii’s arrivals growing.

Charters and additional flights could bring Hawaii beyond 10.8 million seats this year, Uchiyama said.

As such, arrivals expectations for the state’s core U.S. West market have been increased to 3.27 million, a 2.4 percent gain from 2012. U.S. West spending now is estimated to grow 5.5 percent from 2012 to $4.9 billion. Arrivals from Hawaii’s highest-spending domestic market, the U.S. East, now are expected to rise 3.6 percent year-over-year to 1.76 million visitors. Visitor spending is projected to grow 9.6 percent from 2012 to $3.7 billion by year end.

Because of a 2 percent drop in lift from Canada, the HTA decreased its projection for Canadian arrivals to 500,730, which represents a mere 0.5 percent gain from the prior year. However, the HTA increased year-over-year spending by 3.9 percent to $1.03 billion due to the long-term stability of finances in Canada and a favorable exchange rate.

An additional 268,186 seats and more origination points through Sendai and Narita have made the HTA bullish on Japan, Uchiyama said. The number of Japa­nese visitors is anticipated to grow by 13 percent year-over-year to 1.6 million and spending during the same period to rise 16.4 percent to nearly $3.1 billion.

"Growth in seat inventory could spark greater utilization of the MCI (meetings, convention and incentive) market," Uchiyama said.

With the addition of a Korean Air Flight in March and more access from the Busan/Youngnam region, the Korean market is expected to see a 20.3 percent year-over-year rise in arrivals to 188,600. Likewise, spending is projected to grow to $342 million, a 23.2 percent gain from the prior year.

China’s spending and visitor arrivals could dip slightly in 2013 because the country’s outbound travel is expected to grow at a slower rate than in previous years and the market’s air seat capacity is growing more slowly than anticipated, Uchiyama said.

"The single-China-carrier-per-route philosophy is hampering competitive stimulus," he said.

Still, the Chinese market is expected to post an aggressive 25 percent year-over-year gain in arrivals to 144,910 and a 32.6 percent jump in spending to just over $362 million.

A 41.5 percent boost in lift, which includes new service from Auckland starting this month, could benefit the Oceania meetings, convention and incentive market, Uchiyama said. It also could cause Oceania’s year-over-year arrivals to grow by 25 percent to 348,650 and spending to increase by 27.5 percent to $794.9 million.

While the European economy remains uncertain, demand and bookings continue to grow, Uchiyama said. The HTA kept year-over-year arrivals growth at 2.9 percent, which would bring about 134,900 visitors. Year-over-year spending is projected to rise 5.4 percent to $301.1 million.

Inaugural flights from China Airlines in June and Hawaiian Airlines in July are expected to add 24,000 seats to the Taiwanese market. The new flights, coupled with the market’s November 2012 addition to the U.S. visa waiver program, are expected to bring 17,500 visitors, a gain of 81.5 percent from the prior year. Likewise, year-over-year spending is forecast to rise 86 percent to $38.04 million.

Due to strengthening in Latin America’s economy, HTA expects that market to grow 9 percent year-over-year to 27,900. Spending also is forecast to rise 14.5 percent to $84.1 million.