State tourism officials expected a downturn in visitors this year just not to this extent.
Hawaii tourism continued moderating in February with total year-over-year arrivals dropping 4.3 percent and total visitor spending coming in flat against 2013. The 646,759 visitors who came to the islands in February spent $1.2 billion, a 0.6 percent drop from February 2013, according to statistics released Thursday by the Hawaii Tourism Authority. February’s visitor declines contributed to a year-to-date drop in visitor spending, which fell 2.8 percent to $2.6 billion, and a 2.1 percent decrease in total arrivals, which came to 1.3 million visitors.
The results were 2.6 percent lower than the pace needed to achieve HTA’s downgraded arrivals target of 8.4 million by year’s end. Likewise, the spending figure was 3 percent slower than the pace needed to hit HTA’s goal of bringing in $15.1 billion in visitor dollars this year.
"In the first 59 days of this year, we experienced a plateauing or leveling off of arrivals and expenditures," HTA President and CEO Mike McCartney said.
When broken out by day, the drop across markets equates to 303 fewer people per day visiting Hawaii. It also breaks down to approximately $3.30 per day less spending from each visitor and $16 less in total trip spending by each visitor, he said. Still, McCartney said that these guests to Hawaii spent $43.8 million per day, added $4.7 million per day to state tax revenue, and supported 175,000 jobs.
To continue succeeding, McCartney said, Hawaii’s visitor industry has to "lead together with focus."
"Right now what I see happening is everyone is going after (his or her) piece of the pie," he said. "But how many of the people do you know that are baking pies? We’ve got to start baking pies. If we don’t, we are in trouble. We have to work together collectively and collaboratively. In 2014 we’ve got to put together the team, reset and get to work."
Hawaii’s top market, the U.S. West, will be one to watch since a 7.1 percent year-over-year drop in February arrivals and an 8.6 percent drop in spending added to industry declines.
According to the HTA, 222,879 visitors from the U.S. West came to the islands in February and spent $349.5 million. These visitor results were a continuation of the declines that became evident in the market in August.
Virginia visitor Kristen Martin was one of 143,688 U.S. East visitors who came to Hawaii in February.
"I thought Hawaii was beautiful," Martin said of her first trip to the state. "It was so green like Ireland, but a tropical environment. We started on the Big Island. It was so chill and calm. We finished in Oahu, where we stayed in Waikiki and Waimea Bay."
Although U.S. East arrivals to Hawaii were flat, higher spending from visitors like Martin brought total expenditures from that market to $332.9 million, a 6.9 gain over February 2013.
"Hawaii is still our biggest destination, but it’s flat. We’ve seen double-digit increases out of the Caribbean and Mexico, whose government and tourism bureau are spending big bucks," said Jack Richards, president and CEO of Pleasant Holidays LLC, Hawaii’s largest wholesaler.
Fewer airline seats and higher airfares combined with increased hotel room costs also have lessened demand from visitors and groups, Richards said.
"I think Hawaii is in one of those cycles where increased costs will cause some people to look at other alternatives in 2014," he said.
"Eventually other carriers will be attracted by those yields and come into the market.If a low-cost carrier like Southwest comes into Hawaii, everything would change overnight."
While Hawaii’s bumpy start is expected to continue, Richards said April, May and June are solidifying due in part to some moderating in West Coast airfares.
"We’ve seen some West Coast fares down below $500 for the first time since mid- to late 2013," he said.
Still, McCartney said the HTA expects the U.S. West and U.S. East markets will continue declining into the second quarter of the year. Going forward, HTA will need to focus on growing arrivals from international markets like South Korea, China and Taiwan, he said.
"Our pivot to further develop international markets will help sustain Hawaii’s tourism economy for the long term," McCartney said. "We see tremendous potential and are committed to diversifying our global portfolio as well as increasing the meetings, conventions and incentives market segment and first-time visitors."
Based on February’s numbers, that goal could prove challenging. Arrivals from Japan, Hawaii’s largest international market, were flat in February at 119,882 visitors as spending fell 5.2 percent to $195.7 million.
While a primary HTA goal is to strengthen tourism by spreading gains across all islands, there were fewer visitors on every island except Molokai as compared with last February. Also, air seats to the Hawaiian Islands remained virtually unchanged from a year ago at 847,238 . While scheduled seats in February rose 1.7 percent year-over-year to 841,536, there were fewer international charters.
"It is important that we offer our visitors greater ease of access to all of our Hawaiian Islands and need to secure additional airlift so that international visitors are able to experience all of the unique attributes of our Hawaiian Islands, beyond Waikiki," McCartney said. "We will continue to work towards re-establishing Kona as a second international port of entry, as well as increasing more neighbor island connections during peak international arrival times on Oahu."