Hawaii tourist arrivals and spending reached records again last year — the fifth in a row — and it appears 2017 will be no different.
A total of 8.9 million visitors came to Hawaii in 2016, topping last year’s high by 3 percent, according to preliminary data released Monday by the Hawaii Tourism Authority. Visitor spending for the year rose just over 4 percent to a record $15.6 billion.
Last year’s strong finish continued the 2012 trend of spending and arrivals setting simultaneous year-end records. The last time that both visitor arrivals and visitor spending increased in consecutive years for a longer period than the current five-year streak was from 1966 to 1979, said Daniel Nahoopii, HTA director of tourism research.
“All indications point to the positive momentum of tourism’s success continuing into this year. This is vital to Hawaii’s economic health, as the benefits of tourism’s success are realized in some way by every resident, business, charitable organization and community statewide,” HTA President and Chief Executive Officer George Szigeti told lawmakers during a recent legislative briefing.
Jack Richards, president and chief executive of Pleasant Holidays LLC, Hawaii’s largest wholesale travel seller, said tourism and trickle-down businesses already are benefiting from sustained visitor-industry performance.
“We’ve had significant double-digit growth in the first three months of 2017,” Richards said, referring to advanced bookings. “From where we are sitting, 2017 looks to us like it could be the best year ever for Hawaii.”
Richards said Hawaii has gotten an assist from the growing preference among U.S. travelers to choose closer-to-home destinations.
“We are seeing people who would have gone to Europe or other international destinations choose Hawaii instead,” he said.
New and revitalized accommodations also are contributing to Hawaii’s success, said Chris Tatum, area general manager for all Marriott brands in Hawaii.
“Hotels have invested significantly into their properties over the last five years. Our products are in great shape. A greater mix of accommodations also has helped spur visitor increases,” Tatum said.
For instance, a $100 million renovation of the Wailea Beach Resort-Marriott Maui was completed in December, Tatum said.
Richards said new investment such as the Ritz-Carlton Residences Waikiki Beach and the International Market Place also have attracted affluent travelers.
“We are seeing a higher percentage of sales in the upscale and luxury side of the business, particularly in Honolulu and Maui,” Richards said. “You see lots of baby boomers and travelers coming out of places like Silicon Valley.”
Indeed, strong year-round performance from Hawaii’s core U.S. West market, which saw arrivals grow 11 out of 12 months last year, drove 2016’s tourism successes. The U.S. West provided nearly 3.7 million visitors, up just over 4 percent from 2015. U.S. West visitors spent $5.6 billion, an increase of just over 6 percent from 2015. Another hot market was the U.S. East, which saw arrivals grow nearly 4 percent to nearly 1.9 million visitors, while spending rose almost 5 percent to $3.8 billion.
South Korea also experienced a 27 percent jump in visitor arrivals to 245,857. Visitors from all international markets outside of Japan and Canada grew just over 6 percent to 1.3 million, and their spending rose just over 6 percent to $3.1 billion. The gains offset a flat year for Hawaii’s largest international market: Japan. Japanese visitor arrivals were up just 0.4 percent at 1.48 million, and spending rose just above 2 percent to $2.1 billion. They also helped balance decreases from Canada, where visitor arrivals fell nearly 7 percent to 478,871 and spending dropped 9 percent to just over $958 million.
“Last year was a very good year, and there really isn’t a downside to hotels this year,” said Jerry Gibson, area vice president of Hilton Hawaii.
New supply like the Hilton Garden Inn, the Hyatt Centric and the Grand Islander by Hilton Grand Vacations Club, which is slated to open in the spring, mean that the hotel industry can sustain growth in 2017, but maybe not at earlier revenue-per-available-room levels, Gibson said.
Keith Vieira, principal of KV & Associates Hospitality Consulting LLC, said he expects 2017’s tourism growth will range from 2 to 4 percent.
“I think the market won’t be a boom, but it will be OK,” Vieira said.
Tatum said he is “optimistic” that 2017 could outpace last year, though it might not achieve 2015 and 2016 growth levels.
To move forward the industry must watch airline access, fuel prices and “aggressive activity from Mexico and the Caribbean,” he said.
The industry also can’t ignore economic issues like lack of affordable housing and homelessness, Gibson said.
“We need to continue to be concerned about homelessness, which has a tremendous impact on our industry,” he said. “It’s also very important to have affordable housing. Very few can come into Hawaii and buy. Our workers need to be able to rent.”