Visitor arrivals decreased during March, quarter 1

There were 760 fewer visitors arriving in Hawaii each day in the first quarter of 2014 compared with a year earlier, and those who came spent a dollar less per day, as the tourism industry continued to lag behind last year’s rec­ord numbers.

Total expenditures by visitors who came to Hawaii in March fell 3.5 percent year-over-year to $1.2 billion, and total arrivals declined 5.2 percent year-over-year to 728,814 visitors, the Hawaii Tourism Authority said Monday. The monthly softening caused first-quarter visitor spending to drop 3.1 percent year-over-year to $3.8 billion and total arrivals to fall 3.2 percent year-over-year to 2.06 million visitors.

"Following two record-breaking years in visitor spending and arrivals, we anticipated a slowdown in growth this year," said Mike McCartney, HTA president and CEO. "While the outlook for the summer remains strong, we expect the fall shoulder period to be challenging, with increased competition, a strengthening U.S. dollar and increased taxes."

Ben Rafter, president and CEO of Aqua Hospitality and president of Aston Hotels and Resorts, said he expects tourism declines to continue into the second quarter with little pickup until summer when Rim of the Pacific, the world’s largest multinational maritime exercise, returns to Hono­lulu.

"We’ll have to work harder to ensure that our traditional shoulder seasons April, May, early June, September and October, remain flat or continue to grow," Rafter said. "Summer looks pretty good."

But fewer domestic air seats and increased tourism competition from destinations like Mexico, which is spending lots of money to distance itself from past crime problems, and the Caribbean have cut into Hawaii’s share of domestic visitors, he said. Homelessness in Hawaii also is an impediment to tourism growth, Rafter added.

"We are one of the safest big cities in the world, but it doesn’t mean that the other problems like homelessness aren’t impacting us," he said. "We track social media mentions and other various channels, and it’s clear that the problem is worse than it has been in previous years."

March arrivals by air from U.S. West visitors dipped 9.2 percent to 268,236 visitors partially due to the Easter/spring break holiday occurring in April this year as opposed to March last year. At the same time, U.S. West visitor spending plummeted 14 percent to $378.9 million in March.

The U.S. West slump was so steep in March that it couldn’t be offset by a 7.5 percent rise in U.S. East visitor spending, which rose to $317.4 million, or a 0.2 percent gain in U.S. East visitors, which increased to 165,745.

Rafter said Hawaii’s visitor industry is working hard to prevent continued losses from Hawaii’s core U.S. West market, which according to the HTA has been falling since August.

"You’ll see lots of aggressive yielding and promotions," he said. "Hotels are offering value ads like free nights, breakfast or parking — things that help pull down the cost of a stay."

Hawaii’s largest wholesaler, Pleasant Holidays LLC, also just released a booking offer that provides a $500 air credit for select spring and summer vacation bookings to Hawaii from domestic cities nationwide.

Additionally, McCartney said that HTA will continue "to focus on enhancing our global marketing efforts to grow our market share from international regions, as arrivals from these areas continue to increase and help to balance the declines from mature markets like the U.S. West and U.S. East."

Arrivals from Japan, Hawaii’s top international market, rose 2 percent to 130,565 in March, and spending stayed flat at $204.4 million. March arrivals from Canada were flat at 74,054 visitors, while spending from the market dropped 5.9 percent to $136.2 million. The small but lucrative "all other markets" category, which includes Asian countries outside of Japan as well as Latin America, Oceania and Europe, saw March arrivals decrease 4.5 percent to 79,622 visitors. However, higher daily spending contributed to a 4.6 percent rise in expenditures to $190.9 million.

McCartney is hopeful that China is becoming a major market for Hawaii’s tourism industry with 11 weekly nonstop flights — five from Shanghai and six from Beijing.

"There is significant growth in visitor spending from this market as Chinese visitors continue to be the highest daily spenders at $411 per person per day, as of March," McCartney said. "We also recently signed a memorandum of understanding with the China Shanghai Film Group to film the first Chinese major motion picture in the Hawaiian Islands. This will provide our state with tremendous exposure in China and help us to reach a vast population."