No major impact to Hawaii tourism expected with COVID testing change

The COVID-19 testing mandate for international travelers to the U.S. is being lifted, and while local visitor industry officials welcomed the move, they said they aren’t expecting a dramatic increase in tourism to Hawaii.

The Centers for Disease Control and Prevention on Friday announced that the requirement for international air travelers to take a COVID-19 test within a day before boarding their flights will end at 12:01 a.m. Sunday. The restriction was one of the last national mandates meant to curb the spread of the coronavirus.

International travel to Hawaii has mostly been at a standstill since the beginning of the pandemic in early 2020, but that hasn’t been because of any restrictions imposed by the U.S. government. Japanese citizens, in particular, still have to comply with pre- and post-travel testing requirements and quarantine upon returning home, if required.

Japan is Hawaii’s largest international market when it comes to visitor spending. In 2019, 1.57 million visitors from Japan visited Hawaii, and together they spent $2.25 billion, according to the state Department of Business, Economic Development and Tourism.

Visitor arrivals plummeted during the COVID-19 pandemic. In 2020, arrivals dropped by nearly 82% compared with 2019. That trend has continued, as shown by the 6,700 visitors from Japan who came to Hawaii in April, according to DBEDT. That’s a drop of more than 94% compared with the 119,500 arrivals in April 2019.

Lifting the U.S. mandate doesn’t address restrictions still in place in other countries, so opinions among local industry officials on its possible impacts to tourism in Hawaii varied. But it’s generally thought of as a step in the right direction.

“I look at President Biden’s announcement just as removing another barrier between international travelers and Hawaii,” said Mufi Hanne­mann, president and CEO of the Hawaii Lodging and Tourism Association. “Certainly we welcome that, but it’s not going to create … a dramatic increase overnight.”

Jack Richards, president and CEO of Pleasant Holidays, said the change will increase competition between Hawaii and international destinations. Pleasant Holidays sells vacation packages and cruises to areas around the world, including Hawaii.

Richards estimates that 10% to 15% of the company’s U.S. travelers have not been traveling outside the country because of the testing requirement. Not all of those travelers rerouted to Hawaii instead, but some of them did, he said.

“I just got back from Cancun, Mexico, and I had the test within 24 hours. It’s a hassle. It cuts out a lot of time on that last day,” he said. “Our company is expecting a fairly significant increase to international destinations now that this has gone away.”

Keith Vieira, principal of KV and Associates, Hospitality Consulting, said the change will be good because it will help the Hawaii tourism market diversify away from its reliance on the U.S. market for the better part of the pandemic.

“We’re better when we have a greater mix of visitors,” he said. “The visitor spending tends to be greater, and the mix is just who we are.”

Historically, Vieira said, about a third of the visitors to Hawaii have been international. Pandemic travel restrictions in the U.S. and their home countries contributed to dramatic drops in arrivals.

Sam Shenkus, director of marketing for the Royal Hawaiian Center, called Biden’s move an “incremental positive step.” She and Hannemann agreed that travel from Japan could begin returning to pre-pandemic normalcy sometime this fall.

Meanwhile, tourism in Hawaii so far this year has almost completely rebounded from the pandemic, and that’s almost entirely due to a booming domestic market.

“The mainland U.S. market is (experiencing) a double-digit increase over 2019, which was a record-breaking year,” Shenkus said, later adding, “The mainland U.S. market is on fire. I mean, it’s crazy.”

Domestic travel to Hawaii is generally a bigger market than even Japan, and so far this year it’s exceeding domestic visitor arrival numbers set in 2019, when a record 10.4 million visitors entered the state.

More than 2.46 million Americans have visited Hawaii this year, according to the latest DBEDT reports, which is nearly 13.8% more than the 2.16 million who vacationed in Hawaii during the first four months of 2019.

And despite lagging international travel, total visitor spending in Hawaii is slightly up compared with 2019, and again it’s mostly because of domestic travelers. Visitor spending in 2022 is currently at $5.83 billion, and at this point in 2019, spending was at $5.81 billion.

Canada, Hawaii’s second- largest international market for tourism, has also shown signs of returning to pre- pandemic levels this year. The 150,000 visitors to Hawaii from Canada during the first four months of this year represent a 44% drop compared with the 270,000 visitors during the first four months of 2019, although that gap shrank in March and April.

The 97,600 Canadian arrivals in March and April represent only a 27% drop compared with the 133,700 arrivals during those two months in 2019.