Growth in Hawaii’s tourism industry, which set records in 2012, is expected to continue this year and into 2014 at a much slower pace, and some in the industry might have to make price adjustments to stay on track.

The Hawaii Tourism Authority forecast Thursday that the industry will bring 8.75 million visitors to Hawaii in 2014, a 3.2 percent increase over the 2013 arrivals goal. The board also set a goal of increasing visitor spending in 2014 to $16.1 billion, a 5.1 percent increase over the 2013 spending goal.

“We’ll continue to grow in 2014 but at a slightly slower pace,” said David Uchiyama, HTA vice president of brand management and a speaker at the two-day 2013 Hawaii Tourism Conference.

Uchiyama said average per person, per day spending also should rise 2.6 percent to $202.57 in 2014, but that the length of time travelers are spending in Hawaii will fall 0.7 percent as prices continue to hit consumer spending boundaries. 

About 700 attendees, 100 more than last year, turned out for the start of the conference, which wraps up today. The conference was designed to help the HTA, which manages the state government’s tourism budget and sets tourism policy, build additional collaboration within the visitor industry.

HTA President and CEO Mike McCartney kicked off the conference by establishing how important the state’s record-setting numbers of 2012 have been to the industry. 

“We had a great year last year. We broke all records,” McCartney said. “We helped to bring into Hawaii $42 million a day in private capital that amounts to $5 million in state tax revenue and supports 170,000 jobs.”

While arrivals and spending keep rising, this year’s results are expected to be a far cry from last year, which set simultaneous records when nominal spending rose 18.7 percent to $14.3 billon and arrivals climbed 9.6 percent to just shy of 8 million. Also, there are signals that more challenges are coming.

To that end, HTA has downgraded its projected arrivals for this year to 8.479 million, which is 5.6 percent over 2012, but 0.3 percent down from its original goal. While 2013 spending had been targeted to rise to $15.86 billion, HTA now anticipates that it will come closer to $15.3 billion.

The total cost of a Hawaii vacation since the low point in the recession has increased 18 percent, said Jay Talwar, senior vice president of marketing for the Hawaii Visitors and Convention Bureau.

“There’s a lot of talk about how we manage it further,” said Talwar, who is in charge of bringing North American leisure and business travelers to Hawaii.

While scheduled nonstop air seats to Hawaii grew 5.4 percent to 10.75 million seats in 2013, seat inventory in 2014 is only expected to rise 0.7 percent  to 10.82 million. HTA anticipates seats will grow 6 percent for international destinations and in every market except the state’s core U.S. West market and Oceania, which includes Australia and New Zealand.

Uchiyama said the new goals for next year take into account that earlier Japan estimates were too aggressive. He said they also recognize other challenges like Hawaii’s geographic isolation and that the Dow Jones Industrial Average is fluttering above the 15,000 mark, crude oil is inching its way up to above $105 a barrel, the dollar is strengthening against international currency and, as a trip to Hawaii gets more expensive, travelers are staying for shorter times and airlines are adjusting seat capacity to demand. 

“About six months ago, capacity (the number of air seats coming into the market) started growing faster than yield growth and you began to see a little weakness in the fares that carriers are able to charge in mainland markets,” said Brad DiFiore, a conference presentor and managing partner of Ailevon Air Service Consulting. “It’s a supply-and-demand business so we are seeing some carriers pulling out capacity in response to the lower yields.”

Ironically, DiFiore said much of the mainland capacity correction is taking place on Kauai and Hawaii island, where vacancy rates are among the highest in the state.

“Airlines are crucially aware of inventory concerns in Waikiki,” he said. “The question is, ‘Are we doing enough to move people to Kauai and Hawaii island?’ Why aren’t we filling more rooms?”

Service from emerging markets and new cities has diversified the product, but DiFiore said in some cases, like Japan, rapid international growth and increased competition have led to more seats and falling yields.

“We’ll start to see downward trending in 2014 again for the neighbor islands as we lose compression from Oahu and flight and seat inventory,” Uchiyama said. “Do we really need to let it get to this point? Let’s not sit there and think the other guy is going to make the adjustment.”

Uchiyama warned that adjustments must be made as the industry heads into 2016, 2017 and 2018. A lack of advance bookings for those years raises concern about Hawaii’s tourism business, he said.

“We cannot price our product for those years based on how they are doing now,” Uchiyama said. “We need to be much more aggressive about filling business in those years. We need to make price adjustments to avoid a fire sale. I don’t want to see any advertisements offering stay five nights get four free.”