Tourism agency chief sees obstacles ahead

Hawaii’s record run of visitor arrivals and spending could be in jeopardy next year even though airlines are bringing more seats to the islands than ever before.

Arrivals to Hawaii inched up 2.9 percent to an August record 755,863 from 734,685 in the year-earlier period as the state remained on pace to set new highs for the fourth consecutive year, according to preliminary data released Monday by the Hawaii Tourism Authority.

Spending also is on track for a fourth consecutive record year even though visitor expenditures slipped 0.5 percent to $1.27 billion, a decline of just $6.1 million from the year-earlier period.

Through the first eight months of the year, arrivals are ahead 4.1 percent and spending is up 3.1 percent from the same time in 2014.

But the head of the state’s tourism agency hinted that unstable global conditions could put a damper on Hawaii’s visitor industry.

“While we are pleased with this continued growth for the lead economic driver for the state, we are monitoring various conditions that could impact our industry,” HTA President and CEO George Szigeti said in a statement. “Fuel prices have been dropping, the international stock market continues to be in flux, and economic conditions in both Europe and Asia have been unstable. All of these factors could have a potential impact on spending and arrivals to the state.”

Szigeti cautioned that maintaining the level of growth the state has been experiencing over the past few years will be a “challenge,” but he said HTA will continue to work with the state’s global partners through “creative and innovative strategies” to ensure Hawaii remains “top-of-mind as both a leisure and business destination.”

For retired University of California, Davis, head football coach Bob Biggs, Hawaii always has been a popular vacation destination.

Biggs, who arrived with his wife, Diane, on Sept. 18 to support Davis in its game against the University of Hawaii, decided to make a long vacation out of the trip and is scheduled to fly back today to Davis, Calif. The couple divided their time between the Luana Waikiki Hotel and the Courtyard Oahu North Shore-Marriott in Laie.

“We find that more than any other place outside the mainland, when you come to Hawaii, from the time you step off the plane, there’s a familiarity of it and easiness in getting around,” said Biggs, 64, who lived in Kaimuki from 1975-76 and estimates he’s been back 15 to 20 times since. “With the accessibility of the beaches, restaurants and golfing on the North Shore in a short (travel) time, Hawaii has everything we like. We certainly would like to get to the outer islands, too, because they offer something a little different than Oahu does.”

Airlines, which have pulled back seats during the second half of this year from North America, nevertheless have more capacity to Hawaii than they did a year ago. Total air seats, which include scheduled and charter flights, rose 5.4 percent to 1.1 million, led by double-digit growth in seat capacity to Kona (up 13.9 percent) and Kahului (up 11.5 percent).

The greatest percentage of visitors from any of the key markets came from Canada, which typically is stronger during the first three months of the year as the so-called snowbirds flock to warmer climates. Canadian visitors increased 8.8 percent to 28,214, and their spending rose 6.9 percent to $49.3 million.

The U.S. West, the state’s largest visitor market, posted a 2.8 percent increase in arrivals to 313,181 while spending edged up 0.8 percent to $449.8 million. The U.S. East, typically the second-largest market, had a 2.4 percent gain in arrivals to 146,052. Those visitors, though, spent 2.5 percent less than a year earlier at $287.4 million.

The “all others” market, which includes Australia, New Zealand, China and South Korea, continued to strengthen as arrivals rose 5.8 percent to 110,871 to boost its year-to-date increase to 7.5 percent. Spending from that sector increased 6.1 percent to $255.1 million, boosting its year-to-date increase to 14.5 percent.

As has been the case all year, the Japan market continues to lag in the islands with that country’s weak currency fetching about 120 yen per U.S. dollar. Japan arrivals inched up 0.5 percent to 157,543 in August but are still down 1.1 percent for the year. In a more telling sign of the impact of its weak currency, Japan spending dropped 8.2 percent to $226 million last month to further lower its year-to-date spending decline to 9.8 percent.

“We’ve noticed there’s been a reduced spend by Japanese visitors because of the yen-dollar relationship,” said Barry Wallace, executive vice president of hospitality services for Outrigger Hotels and Resorts. “I’m a hotel guy, and much of that spend is in the retail portion, so it doesn’t affect my business as much as it might affect a jewelry store owner. But we do have tenants in all lines of business, and my understanding is that the Japanese are doing less higher-end shopping. But they’re still doing entertainment stuff and going to restaurants and convenience stores.”

Wallace said overall arrivals being up in August is significant in itself since the number is compared with the record year of 2014.

“Last year was the strongest August we’ve had in a while, so having a better one is significant,” he said. “We didn’t have the benefit of the (biennial) RIMPAC (Navy) exercises in July as we had last year. There’s a lot of travel associated with RIMPAC, and while the peak events are in the middle of July, some travel begins early and people come early in June and some stay over into August, so we usually see a little bit of a lift the first couple weeks of August.”

Despite the global uncertainty, Wallace said Hawaii’s tourism industry is still in good shape.

“Hawaii is a very diversified destination,” he said. “We get visitors from everywhere. One of the strengths of our market, as George (Szigeti) points out, is also one of our risks because when there’s international uncertainty we get hurt a little bit from that. But having a very diverse mix, with the largest tourism source being the continental North America market, North America is strong at the moment, and people are feeling comfortable to travel.

“I think cautiousness comes into the vocabulary now because we’ve had four years in a row of record-breaking performance and no one wants to go on record to say, ‘Yeah, we’re going to do it again.’ It’s a natural tendency from all of us to not talk about what’s going to happen.”