Tourism rises, spending drops again in isles

While the number of visitors traveling to Hawaii rose in May, spending declined slightly for the second month in a row, prompting the head of the Hawaii Tourism Authority to advise members of the industry to watch their pricing.

Visitor arrivals totaled 645,711 in May, up 3.7 percent from a very healthy May 2012, according to data released Friday by the HTA. But spending dropped 0.6 percent to about $1.05 billion. The average length of stay, meanwhile, fell to 8.68 days from 8.88 days.

"The second quarter is a little slower than the first quarter, but we are still beating last year and it was a very good year," said Jerry Westenhaver, general manager of the Hyatt Waikiki Beach Resort and Spa. "A little slowdown was expected because we can’t continue to grow at those rates and revenue streams."

Still, while the changes in spending and length of stay were scant, others say it could be a sign that Hawaii travel buyers are feeling more sticker shock. After all, the market made news during the first quarter when it took the dubious honor of having the most expensive nightly hotel prices in the country. During the first quarter, Hawaii hotel guests spent $233.33 a night on the average hotel room, or 13 percent more than in 2012 when the average rate was $206.22, according to Hospitality Advisors LLC and Smith Travel Research. On average, guests paid about $10 a night less for hotel rooms in Miami/Hialeah, Fla., and about $23 a night less in New York. Prices for airfare, food and beverage, and entertainment also have grown, said Mike McCartney, HTA president and chief executive officer.

"Consumers have become more cautious of their spending as the price of a Hawaii vacation continues to increase, resulting in a shorter length of stay and reductions in daily visitor spending," McCartney said.

Barry Wallace, executive vice president of hospitality services for Outrigger Enterprises Group, said seasonal softness and a comparison against an extremely robust 2012 may have accounted for some of the dip in May spending. However, Wallace said price sensitivity also mattered as it has through summer.

Some of the teams for this month’s Far West Regional Soccer Tournament doubled up on rooms, and others made a last-minute decision to cancel because overall trip costs were too high once they added in the airfare, food and other items, Wallace said.

"The cancellations, which affected five or six hotels, had a considerable impact on the whole (event)," he said.

Denver tourist Marissa Melton, who came to Hawaii with her family to attend her younger brother’s tournament, said the group noticed that total pricing was higher than at other destinations.

"The hotel room base rate was comparable to other resorts we’ve stayed at such as the Fairmont Scottsdale Princess," Melton said. "However, the taxes and extra fees (parking and resort fees) made it much more expensive. In addition, the food prices were insane and much higher than all the resorts we’ve stayed at. Never in my life have I seen a hamburger cost $14."

That said, the higher prices did not dissuade the family from going on a shark dive, taking a catamaran trip and visiting the Polynesian Cultural Center, Hawaii’s largest privately owned attraction.

"My parents figured that if we were going to go to Hawaii, they were going to make a great two-week vacation out of it," Melton said. "I leave for college in a year, and they wanted to have a great family vacation because they weren’t sure how many others we’d get in before I leave."

Eric and Melissa Hernandez of San Diego also splurged a little bit since it was their honeymoon.

For the most part, Hawaii was worth the cost, they said. Besides, "It was cheaper than going to Tahiti," Melissa Hernandez said.

Like niche wedding travelers, higher-spending international visitors also tend to be less price-conscious, Wallace said.

"We’ve been fortunate with visitors from Japan, Canada and Australia," he said. "Now we’re exploring other markets and trying hard to learn how to accommodate more Chinese and Korean visitors."

Westenhaver said Hawaii’s got a good global mix of visitors who will keep occupancy at the Hyatt Waikiki Beach Resort and Spa in the mid-90th percentile through summer.

"I expect a strong June, July and August and a solid fall to materialize," he said.

However, Wallace said that he’s seen some room discounting in the overall hotel market, particularly on the neighbor islands, where demand is lower.

"We’ve had almost 24 months of double-digit (revenue per available room) growth driven by price," he said. "That can’t go on forever."