Spending and arrivals rose in September as Hawaii tourism remained slightly ahead of the three-quarters pace set during the record years of 2012 and 2013.
Visitor spending last month rose 1.4 percent year-over-year to $1.1 billion, according to preliminary statistics released Tuesday by the Hawaii Tourism Authority. At the same time, visitor arrivals increased 4.1 percent to 622,163 visitors.
September visitor arrivals grew in all major markets, while spending grew in all major markets except for the U.S. East, Canada and the category called All Other Markets, which includes Asian markets outside of Japan, Oceania, Europe and Latin America. Visitor arrivals grew on Oahu and Maui but decreased on Kauai and Hawaii island. Spending grew on all islands but Oahu, which saw a 6.1 percent drop in overall visitor spending.
"We beat last year by a pretty good margin," said Barry Wallace, executive vice president of hospitality services for Outrigger Enterprises Group. "We didn’t see double-digit increases, but the gains were pretty significant given that tourism set records last year."
Arrivals by air from Hawaii’s core U.S. West market grew 6.9 percent to 230,512 visitors in September, while spending rose 7.1 percent to $339.3 million, according to the HTA. Hawaii’s second-largest visitor market, the U.S. East, experienced a 1.9 percent gain in arrivals to 110,469 visitors; however, spending fell 3.3 percent to $234 million.
Arrivals from Canada were flat at 19,692 visitors, and spending fell 2.7 percent to $37.6 million. Arrivals from All Other Markets increased 4.6 percent to 112,703 visitors; however, spending fell 1.7 percent to $243.6 million. September cruise ship arrivals grew 11.1 percent to 13,152 visitors, whose spending rose 13.1 percent to $6.3 million.
Arrivals from Japan, which is Hawaii’s largest international market and the top Waikiki market, were flat at 135,635 visitors in September despite the excitement of the Arashi Blast in Hawaii Concert, which drew about 15,000 boy-band fans from Japan. However, spending by Japanese visitors in September rose 2.4 percent to $217.3 million despite a less than favorable currency exchange rate and higher consumption taxes in Japan.
"We got a very nice boost from the Arashi concert, which added more charter flights," said Jerry Gibson, area vice president for Hilton Hawaii.
Air capacity to the state was up 5.6 percent to 863,609 seats in September. There were 10.9 percent more scheduled seats from the U.S. West, 6.6 percent more seats from the U.S. East and 3.8 percent more seats from Asian markets outside of Japan. Seats from Japan fell 7.2 percent and dropped 1.6 percent from Oceania and 1.3 percent from Canada.
Gibson said the consistency of airfare into Hawaii, particularly from the U.S. West Coast, helped to boost September’s visitor counts.
"Oahu was great, although the outer islands, particularly Hawaii island, was still down a little bit," Gibson said. "The expense and lack of direct international flights into Hawaii island certainly hasn’t helped. The cost of airfare for the modern-day family to get back and forth from Oahu to the neighbor islands can reach close to $1,200, and that’s a significant expense."
Despite increased competition from other destinations, fluctuating currency exchange rates and fuel surcharges, as well as unstable economic conditions, HTA President and CEO Mike McCartney said that Hawaii’s visitor industry continues to maintain the positive momentum experienced over the past two years.
"While we are just shy of our targets, we are optimistic that 2014 will be another record-breaking year for Hawaii’s tourism economy," McCartney said.
During the first nine months of the year, higher average daily spending contributed to $11.1 billion in visitor spending, which was 2 percent higher than the same period last year. Arrivals totaled 6,219,927, which was on par with the first nine months of 2013.
"We’ve had a steady pace of business this year. Every month this year has been better than the same month the previous year," said John Votsis, director of sales and marketing at Trump International Hotel Waikiki Beach Walk.
In August the HTA set a target of reaching $14.69 billion in visitor spending, which would be 2 percent above the record 2013, and 8.25 million in arrivals, which would be 0.9 percent above last year’s record. Wallace said the good news is that the booking pace continues to be strong going into the fourth quarter.
"I think almost everyone is sold out for Christmas and New Year’s, and there are a few conferences and the Honolulu Marathon to give us some nice spikes," Wallace said. "With any luck at all, we’ll continue that momentum into 2015."
Indeed, Starwood Hotels and Resorts expects demand for Hawaii to remain strong.
"Based on industry projections, arrivals will grow around 2 percent overall with double-digit growth from international source markets such as China and Korea with more moderate growth from Japan," said Cheryl Williams, regional director of sales and marketing for Starwood Hotels and Resorts Hawaii and French Polynesia. "In the first quarter airlift is solid, so that bodes well for the destination. At Starwood our group pace is strong for 2015, which will help drive our overall performance in all segments and source markets."
