Hawaii’s record-breaking tourism industry appears to be keeping credit and debit card transactions at historically high levels.
Sales at businesses open at least 12 months soared 10.9 percent in the third quarter to mark the second-highest performance since the inception of the First Hawaiian Business Activity Report in 2010, according to the data scheduled for release today. The only larger percentage gain was in the fourth quarter of 2012 when sales jumped 11.3 percent.
The state’s largest bank, which has seen the sales achieve 27
consecutive quarters of growth since the study began, also processed an all-time quarterly high of
$835.5 million in transactions from its Hawaii merchants.
Hotels and restaurants, which produce the most sales volume of any of the 16 sectors tracked in the report, posted strong performances. Hotels’ debit and credit card volume jumped 16.5 percent — the third highest of any sector — while processing $187.4 million in transactions. Restaurants, whose sales rose 7.6 percent, were next in volume at $131.3 million.
Utilities and communications chalked up the highest percentage increase in sales at 20.5 percent to mark the third time the sector occupied the top spot. The sector was third in total sales at $96.3 million.
“The bottom line is these are really good numbers, and they basically reflect the continued strength in tourism,” said Jack Suyderhoud, a professor of business economics at the University of Hawaii Shidler College of Business. “The numbers continue to be good in tourism in terms of arrivals. Maybe spending is not as robust, but arrivals have been looking very good. You can see that in the hotel numbers in the report, and, for that matter, restaurant numbers are not over 10 percent, but are still a very strong
7.6 percent.”
Hawaii has now seen 19 consecutive months of year-over-year growth in arrivals, which were up 2.6 percent for the first eight months of this year. If the gains hold, the state would see its fifth straight record year of visitor arrivals.
Suyderhoud said another reason for the strong quarter could be that the third quarter of 2015 was up just 5.6 percent over the year-earlier period.
“Part of this growth is due to the fact that the prior year’s third quarter wasn’t as strong as the third quarter usually is,” he said. “That may be one of the reasons why these numbers are showing up a little bigger.”
Suyderhoud, a member of the Hawaii Council of Revenues, said he was surprised at the strength of the business activity report.
“I never get too excited about single-period events even if it’s quarterly data,” Suyderhoud said. “One thing I find interesting, in particular, about this one number (10.9 percent) is as part of my responsibility for the Council of Revenues, I track tax collection data. And the general excise tax was down 3.6 percent over the same period in the prior year. So what we see are data that appear to give conflicting impressions. The BAR report is very strong, and the excise tax for the same period is surprisingly weak. We’re getting signals from two different sources that are kind of opposite signals.”
First Hawaiian, which has $19.1 billion in assets, is able to monitor broad economic activity in the state through its card-processing services because it is the islands’ largest local processor of debit and credit card transactions. The bank has more than 6,000 merchants in its network, with most of those in the state.
All 16 sectors tracked by the bank posted positive returns in the third quarter, with seven of the categories showing double-digit gains. Besides utilities/communications and hotels, other sectors with double-digit gains were insurance (17.1 percent), home furnishing (14.3 percent), automotive (14.2 percent), home improvement (12.7 percent) and automotive parts, services and accessories (10.4 percent).
Retail trailed the categories for the third consecutive quarter but posted a 3.9 percent increase in sales to reverse a negative trend that began in the first quarter of 2015. An increase in online transactions has been cited by the bank as a likely reason that local retail transactions have been lagging.
First Hawaiian, which debuted on the Nasdaq stock market Aug. 4, is scheduled to release its first earnings as a publicly traded company
Oct. 27. Shares of the company, which trades under the name First Hawaiian Inc. (ticker: FHB), have risen 13.8 percent since being priced at $23 for its IPO.
