Arrivals from Hawaii’s top market for visitors — the U.S. West — were up 10% compared with June 2019, but they were down 4.5% from June 2021, the Department of Business, Economic Development and Tourism reported Thursday. Visitors from the U.S. East were up 3.9% in June compared with June 2019, but this June were flat at 0.9%.

The dampening is expected to continue into fall and extend into 2023, according to some local visitor industry members, who say Hawaii’s top international market, Japan, has not returned in significant enough numbers to offset the trend.

Jerry Gibson, president of the Hawaii Hotel Alliance, said, “I don’t see any shining stars throughout the next months. The festive season (Dec. 23 to Jan. 3) will always be strong. The rest of the year is softer than I expected.”

Nearly 89%, or 748,042, of the 842,927 visitors who came to Hawaii in June were from the U.S., DBEDT reported.

Only 11,940 visitors from Japan came to Hawaii in June, down 90.6% from the 126,592 visitors who came in June 2019. Visitors from Japan spent $24.3 million in June, a drop of 86.7% from the $182 million spent in June 2019.

Gibson said the U.S. economy, which has led Hawaii’s tourism recovery, is weighed down by high inflation, rising interest rates and labor and supply shortages. U.S. gas prices are still high, along with the price of food and other goods.

“I think people are thinking a little bit about whether they are going to be coming these last few months,” Gibson said.

Overall and domestic visitor spending in June was still up by double digits against June of 2021 and 2019, which has positive and negative economic benefits. In recent years HTA has focused on replacing large volumes of arrivals with mindful visitors who are willing to pay more for authentic experiences. Since these travelers spend more, Hawaii’s economy theoretically needs fewer of them.

However, if prices get too high, consumer demand could drop, especially as the perception of Hawaii’s affordability already is showing signs of weakening among U.S. travelers.

Chris Kam, president and chief operating officer of Omnitrak, said according to data collected from U.S. travelers in April and May, most indicators of travel sentiment for Hawaii were unchanged save for the perception of Hawaii’s affordability.

“In 2021, 6 out of 10 surveyed gave affordability of travel a low score. By the time 2022 rolled out, now 7 out of 10 are giving affordability of travel a low rating,” Kam said.

DBEDT reported that overall visitor spending rose in June to $1.83 billion, up 12.3% from the $1.63 billion in visitor spending generated in June 2019. U.S. West visitors spent $963.3 million in June, up 39.4% from $691.2 million in June 2019. U.S. East visitors in June spent $662.5 million, a rise of 34.9% from $491.1 million in June 2019.

ACCORDING TO marketing documents obtained by the Honolulu Star-Advertiser, Hawaii Tourism Authority’s current U.S. contractor, the Hawaii Visitors and Convention Bureau, originally had planned to address the U.S. West softening with a September campaign in Los Angeles that emphasized regenerative tourism and culture. HVCB’s plan included offering marketing co-ops to the industry to boost short-term sales along with sales in the first and second quarters of 2023.

However, those plans were shelved when HVCB lost its bid for a new U.S. tourism contract this spring. On June 21, HVCB formally protested HTA’s June 2 decision to award a multiyear U.S. tourism contract to the Council for Native Hawaiian Advancement worth more than $34 million during the first two years.

HTA extended HVCB’s U.S. tourism contract for three months ended Sept. 28. The $4.25 million stopgap measure was to give the agency time to sort out the procurement protest.

HVCB Chief Marketing Officer Jay Talwar presented short-term plans to the HTA on Thursday that mostly focused on visitor education and messaging to residents about HTA’s efforts to manage tourism.

“WHAT WE want to do is keep educating potential visitors about our communities’ desires for regenerative tourism and attract people who enjoy that sort of experience,” Talwar told the Star- Advertiser. “That takes communication; that takes budget; that takes commitment for a long-term communications plan. It’s not just saying that we are open. That can be done relatively inexpensively. If we are saying that we are open to visitors who behave in this fashion, that’s an educational program and that takes much longer.”

Keith Vieira, principal of KV &Associates, Hospitality Consulting, said he’s concerned that the HTA’s U.S. tourism contract is still uncertain at a time when softness is threatening the market.

Vieira said the contract dispute comes as most Hawaii hoteliers are reporting a 10% reduction in booking pace compared with what they saw in the second quarter for the summer. Likewise, Hawaii’s wholesalers, who represent about 20% of Hawaii’s domestic tourism, are reporting that their bookings are off this fall and even more so in 2023.

“Anytime you don’t react to what would normally be done to shore up softness, that’s scary,” Vieira said. “We are a big business, and we are the largest business in the state; and 80,000 hotel workers and $3 billion in visitor taxes are crucial for our ongoing survival as an economic entity.”