Hawaii tourism arrivals hit recovery benchmark in July — but not all residents embracing the rise

July brought the highest monthly count of visitors since January 2020 — a benchmark that is creating economic hope for the pro-tourism crowd and angst from those concerned about whether the numbers can be properly managed to avert the threat of overtourism.

Some 919,154 visitors came to Hawaii in July, representing a 92% recovery rate from July 2019, according to preliminary visitor statistics released Monday by the state Department of Business, Economic Development and Tourism. There were actually more domestic visitors in Hawaii in July as compared with July 2019, especially from the U.S. West. However, international visitors in July were still down compared with July 2019, especially from Japan, which is normally Hawaii’s largest source market for international visitors.

DBEDT Director Mike McCartney said in a statement that the state agency is not forecasting full tourism recovery until 2025. Still, July’s tourism results are cause for celebration for some Hawaii residents, who point out that even though fewer visitors came to Hawaii in July than in July 2019, visitor spending reached $1.94 billion — a 14.3% increase over the $1.7 billion spent in July 2019.

More than 5.3 million visitors came to Hawaii through the first seven months of 2022, a 13.2% decrease from the same period in 2019. However, total visitor spending through July rose 5.8% to $11.16 billion.

It’s the hope of those in the pro-tourism camp that the strength of the domestic market will continue offsetting group business declines, as well as declines from Japan.

Hawaii Tourism Authority President and CEO John De Fries said in a statement, “Travel demand from Japan is anticipated to gradually increase as we head into the fall and winter seasons, with the recent resumption of air service between Tokyo-Kona and Tokyo-Honolulu adding to the steady return of international flights.”

Hawaii Hotel Alliance President Jerry Gibson said group business travelers are likely to take longer to recover than visitor arrivals from Japan as bookings in that segment are typically made five to seven years out. He said that he is getting mixed reviews about future booking pace, which in some cases has started to slow down along with the economy.

“A few hotels are somewhat even with 2019, while others are saying it’s a little slower going forward,” Gibson said. “We hope to recover the Asian markets by 2024, but we don’t think that we’ll get that association business consistently in the pipeline before 2025.”

Gibson opined that Hawaii’s current tourism market is fairly well-balanced given that arrivals and hotel occupancy are slightly down, while spending is significantly up. But he said that Hawaii tourism still needs more international and group arrivals.

“The other day the stock market going down 1,000 points just shows you how the economy is and it doesn’t appear that it’s going to correct itself quickly,” he said. “It’s important that we get the amount of tourism that we need to sustain Hawaii.”

On the flip side, some Hawaii residents remain concerned about the effect of too much tourism, which they say strains the environment and culture and negatively affects the quality of life for local residents.

KC Connors, a moderator for the Facebook page ETA Hawaii — Enough Tourists Already, said of July’s visitor performance, “We wouldn’t call it the best figure. We would call it overtourism.”

Connors said the onus is on HTA and other policymakers to figure out the tourism-carrying capacity for each island and take steps to ensure that arrivals do not exceed those limits.

“There doesn’t seem to be the political will to set limits, but when we exceed them, there are hidden costs and diminishing returns,” she said. “We are overstretched from police to lifeguards to sewers to garbage pickup and landfills. We have overcrowded, dirty beaches, parks and hiking trails.”

Connors said Hawaii’s current tourism dependency tilts its whole economy.

“We need to diversify away from tourism to higher-paid, modern 21st century jobs like all the other states do,” she said.

The July visitor arrivals report follows DBEDT’s release of the Spring 2022 Resident Sentiment Survey, which showed early signs of strengthening resident sentiment toward tourism. HTA said the survey showed that the desire for destination management remains strong. It also showed that residents who are aware of HTA’s efforts to manage tourism were generally more positive toward tourism in the survey. However, the survey found that awareness of statewide efforts such as the Destination Management Action Plan for every major county is relatively low.

HTA has overseen the development of DMAPs in every county to implement steps that the community, the visitor industry and other sectors deem necessary to improve tourism over the next several years. Last July HTA’s board of directors approved the DMAP for Oahu, the state’s most visited island, which was published on HTA’s website, bit.ly/3cvYuoE.

According to the Oahu DMAP, the top action is “decreasing the total number of visitors to Oahu to a manageable level by controlling the number of visitor accommodations and exploring changes to land use, zoning and airport policies.”

The Oahu DMAP also focused on several other key actions that the community, visitor industry and other sectors deem necessary over a three-year period. Establishing a regenerative tourism fee, creating reservation systems for natural and cultural sites, managing visitors’ use of cars and expanding and supporting “buy local” programs also were key actions.

The plan also hoped to attract more respectful visitors by implementing a pre- and post-arrivals communication program and developing marketing programs to attract “positive- impact travelers who prioritize the environment, culture and investing in our local community.”

HTA has been working with Waikiki stakeholders to bring crime-reduction initiatives to the state’s top tourism district.

Waikiki Neighborhood Board member Kathryn Henski said more still needs to be done, especially in regard to crime, which was a growing negative resident sentiment in the HTA report.

“We need to improve infrastructure and do more to educate visitors as to safety concerns,” Henski said. “It seems like crime in Waikiki has only grown worse. People can’t possibly imagine the 5,000 to 6,000 incidents a month that the police are responding to in Waikiki.

“I don’t think HTA is making enough progress in addressing resident concerns.”

In a March progress report on the Oahu DMAP initiatives, HTA noted that it had helped to lower the number of illegal short-term vacation rentals by supporting county enforcement of current regulations and implementation of new rules. HTA said it also had provided resources to engage communities and agencies to collaborate on additional short-term vacation rental rules, particularly to limit expansion of legal short-term vacation rentals outside of the resort areas.

Indeed, the Hawaii Vacation Rental Performance Report, which utilized data compiled by Transparent Intelligence Inc., showed that vacation rentals in July reported higher average daily rates than in July 2019. However, there was lower vacation rental supply, demand and occupancy.

Hawaii hotels reported slightly lower occupancy in July, which was 3.8 percentage points lower than in July 2019, according to the most recent Hawaii Hotel Performance Report released by DBEDT, which was produced using hotel survey data compiled by STR. However, revenue per available room was 30% higher, driven by 36.1% higher average daily rates.

HTA’s March progress report for Oahu said it had not yet begun to commit resources to study methods of limiting supply. such as controlling new visitor accommodation development through building permits or approvals for new sites. It also had not started exploring changes to land use, zoning, airport policies and other actions that influence tourism infrastructure, ultimately determining the number of visitors that can access Oahu sites.

De Fries said in a statement, “It takes a collaborative effort to bring these destination management actions to fruition, from the respective steering committees and task force members HTA has convened in recent years, to the increased inter-agency coordination among state and county departments, visitor industry stakeholders, and the substantial array of community-based organizations engaged in cultural and natural resource stewardship and community enrichment programs.”