Newlyweds help lift tourism

Domestic travelers kept Hawaii’s visitor industry growing in October, bringing the state closer to its third consecutive annual record in visitor spending and arrivals.

Led by strong increases in travelers from Hawaii’s core U.S. West and U.S. East markets, October arrivals rose 3 percent to 659,821 visitors, the Hawaii Tourism Authority reported Wednesday.

Significant honeymoon growth contributed to a 9.1 percent rise in visitors from the U.S. West, which numbered 259,144 in October, and a 7.7 percent jump to 123,675 visitors from the U.S. East. However, visitors from core markets stayed less time in the islands.

"The HTA continues to monitor slight declines in average length of stay and its potential impact on future expenditure growth. As the U.S. dollar continues to strengthen against international currencies, amidst increasing competition from closer and more affordable destinations, we also anticipate changes in the booking pace through the second quarter of 2015," said Ron Williams, interim CEO of the Hawaii Tourism Authority, in a prepared statement.

October arrivals from Japan, Hawaii’s top international market, fell 2.7 percent and declined 1.4 percent from Canada. They also fell from Korea and Taiwan, but rose from Latin America, Europe and China. And, while there were 51.6 percent fewer cruise ship arrivals in October due to the reduction in one ship, the total number of visitors who came for meetings, conventions and incentive trips doubled from October 2013 to 56,472.

Visitor spending in October rose 3.3 percent to $1.1 billion, a figure that has not been adjusted to reflect inflation. A year-over-year increase in air seats, especially from the U.S. West and U.S. East, helped propel the October gains.

Arrivals from the U.S. West and U.S. East took a hit in October 2013 as airlines cut seat capacity amid falling demand. This October, air capacity to the state rose 5.4 percent to 897,190 total seats. An 11.2 percent increase in seats from the U.S. West and a 9.8 percent jump in seats from the U.S. East offset a 7.8 percent decline in seats from Japan and a 2.6 percent drop from Oceania. Seats from Korea and Taipei also fell.

"During the first 10 months of the year, visitor spending continues to increase for most of our major market areas, which is demonstrative of the continued demand for travel to the Hawaiian Islands," Williams said. "However, we continue to monitor the impact of the weakening yen and recent consumption tax hike in Japan, which has resulted in decreases in expenditures and a shorter length of stay from the region, in comparison to the same period last year."

Visitor arrivals rose 4.4 percent on Oahu this October as compared to last. However, visitor spending on Oahu fell by 6 percent, most likely because of economic pressure on Japanese visitors, who make up the isle’s top visitor market. Arrivals also rose on Maui and Hawaii island, but declined on Kauai

"We had really good news at least on Oahu. It was a record year last year and this year is even better," said Barry Wallace, executive vice president of hospitality services for Outrigger Hotels and Resorts. "It was less robust on the neighbor islands, but it’s improving and getting better."

Jerry Gibson, area vice president for Hilton Hawaii, said the chain is finding that families are increasingly choosing Oahu to avoid paying interisland air fares.

"We’re finding that families are thinking it’s a little more expensive to land in Oahu and plan another round trip back and forth so they are just planning trips to Oahu," Gibson said. "If we could get some of that overflow to go to the outer islands instead of not coming at all, it would certainly behoove the state."

But for that to happen, Gibson said interisland air prices will have to come down and more carriers will have to offer direct flights to the neighbor islands. Reopening Kona as an international port of entry would also help drive traffic, especially from Asia, to the neighbor islands, he said.

Still, October’s results kept Hawaii heading toward a slightly better year-end finish than last year. Arrivals were flat at nearly 6.88 million visitors through October, but total visitor spending increased by 2.2 percent to $12.2 billion.

"While we are still on track to surpass last year’s record-breaking numbers, the growth trend in visitor expenditures and arrivals over the past two years is at a much slower pace than in previous years," Williams said.

The continued success is pumping up all aspects of Hawaii’s tourism economy. Year-to-date through October, Hawaii’s visitor industry had generated $1.3 billion in tax revenue for the state, or $27 million more than the same period last year.

The last three months of 2014 should be strong, said Cheryl Williams, regional director of sales and marketing for Starwood Hotels and Resorts Hawaii and French Polynesia.

"Quarter four is looking good for all islands with year-over-year pace up around 5 percent depending on the island and the hotel," she said. "Again this year, all of our hotels are expected to be sold-out during the holiday season."

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