Hawaii welcomed a record 9.9 million tourists in 2018, just 45,452 visitors shy of a 10 million benchmark that had been anticipated before head winds emerged in the back half of last year.
Still, it was another year of record-setting arrivals for Hawaii’s visitor industry, which has realized growth over the past seven years. While the total spending results were higher than last year, the Hawaii Tourism Authority does not adjust its spending to account for inflation or include supplemental business expenditures.
HTA released preliminary numbers Thursday showing that 2018 arrivals increased nearly 6 percent from the 2017 arrivals record of more than 9.4 million visitors. This gain got an assist from a more than 8 percent increase in trans-Pacific air seats, which rose to more than 13.2 million in 2018.
Total visitor days rose more than 5 percent in 2018 to bring the average to 242,629 tourists, on any given day, visiting the Hawaiian Islands.
Nominal, or not inflation- adjusted, visitor spending in 2018 increased nearly 7 percent to more than $17.8 billion, generating $2.08 billion in state tax revenue in 2018. Spending rose in all major markets, including the U.S. West, U.S. East, Japan, Canada and the category called all other international markets, which includes all international markets outside of Japan and Canada. Japan was the only major tourism market to post a slight year-over-year decline in arrivals.
The year-end gains were achieved despite the roller- coaster-like highs and lows many visitor industry members experienced as the market responded to unplanned events. First there was a major flood on Kauai in April. That disaster was followed by a heightened eruption at Kilauea Volcano, weather disasters in Hawaii and Japan, a 51-day hotel strike, stock market volatility and then a government shutdown.
Jack Richards, president and CEO of Pleasant Holidays, was among those forecasting early in the year that 2018 would break the 10 million arrivals benchmark, but downgraded his bullishness in the latter half of the year.
“Our Hawaii business was having a record year with month after month of double-digit growth up to May,” Richards said. “Then we gave everything back and ended up flat. It was all the stuff that Hawaii was dealing with.”
Some companies and some regions experienced greater softening. Oahu, Maui and Kauai all realized spending and arrivals increases in 2018. However, Hawaii island and its spewing lava made the mainland news cycle for months, causing flattening visitor spending and declining arrivals.
In December, visitor arrivals rose more than 3 percent to 910,060; however, spending declined nearly 4 percent to $1.6 billion. That softening has carried over into 2019.
“There was so much stock market volatility, and then we had the government shutdown. We didn’t see a good day in January until the day after the government reopened,” Richards said. “Competition from Europe, Mexico and the Caribbean, which reopened in December (after weather disruptions), hasn’t helped.”
Keith Vieira, principal of KV & Associates Hospitality Consulting, said the current Hawaii tourism market is still reeling from several months ago when negative events caused some tourists to make other choices.
“It’s just going to take some time to improve,” Vieira said. “On top of that, we had a phenomenal start to 2018, so we have to get past those comps before we’ll see positive results.”
Chris Tatum, HTA president and CEO, shared a similar view with the HTA board during its Thursday meeting.
“Hawaii island is still struggling, but I will tell you that the overall (statewide) pace is somewhat concerning. We don’t want to take our foot off the gas, we can’t turn it around any other way. It’s not a panic situation, but we have to be cognizant of what is going on in the market,” Tatum said.
Tatum said HTA will continue working with its contractors Hawaii Tourism Japan and the Hawaii Visitors and Convention Bureau to address shortfalls.
Richards said bolstering marketing efforts will help Hawaii tourism rebound, as will the coming arrival of Southwest Airlines, which he expects will start selling seats to Hawaii before Valentine’s Day.
“Anytime you have a major carrier come into the market, it’s positive. They have a lot of very loyal customers,” Richards said. “I think the first quarter will be down. We’ll probably see a rebound in late April, and hopefully we’ll be up for the whole of 2019.”