Visitor arrivals in January recovered to almost 97% of 2019, and international arrivals hit their highest monthly level since the pandemic — but maintaining that momentum likely will hinge on arrivals from Japan recovering in time to offset the loss of some U.S. visitors if a U.S. recession materializes.

There were 791,781 visitors who came to Hawaii in January, down 3.2% from January 2019, the benchmark year prior to the COVID-19 pandemic, according to preliminary data released Tuesday by the state Department of Business, Economic Development and Tourism. Arrivals were up 37.9% from January 2022.

The visitors who came to Hawaii in January spent more on a nominal basis than visitors who came in 2022 and in 2019. Visitor spending in January reached $1.89 billion, a nominal increase of 35.5% from January 2022 and 17.2% from January 2019.

January’s results were better than many in Hawaii’s visitor industry had anticipated based on the softness that emerged during the fall and lingered into the festive season. A reason is that changes in the market since COVID-19 — mainly, more U.S. visitors with a preference for making their travel bookings less than 90 days out— have made comparisons harder to read and the future more challenging to predict.

Though the booking pace is still down compared with the same period in pre-pandemic times, Hawaii’s hotels are seeing an increase in guests, especially from the U.S. West, who are booking in the 25- to 45-day window.

Keith Vieira, principal of KV &Associates, Hospitality Consulting, said, “You don’t see a normal pace because of the short-term booking window. But it’s shaping up better than expected.”

Hawaii continued to benefit from demand in January from U.S. travelers — a trend that emerged during the earlier part of the pandemic. U.S. arrivals in January reached 596,637, a gain of 16.9% from 2022 and 18.6% from 2019.

Hawaii Hotel Alliance President Jerry Gibson said many in Hawaii’s visitor industry are awaiting March visitor industry data, which he called a “bellwether” for whether summer can come in as robust as 2019 and before.

“This is the big month — March — and we’ll start to get an indication of what the rest of the year will be like shortly,” he said.

Hawaii’s economy is dependent on a delicate balance of maintaining enough of these U.S. travelers in the earlier part of this year to counter sluggishness in the return of Japanese visitors, and then getting enough Japanese visitors to offset pullback in U.S. arrivals if the U.S. economy worsens.

So far, so good. DBEDT Director Chris J. Sadayasu said in a statement, “Hawaii’s tourism industry had a good start in 2023 with nearly a 97% recovery in arrivals. International visitors by air in January 2023 accounted for 23% of the total visitors by air — the highest since the start of the pandemic. January 2023 was the second-best month for arrivals from Japan and Canada for 34 months. The same was true for cruise ship arrivals during the month.”

Chris Kam, president and chief operating officer of Omnitrak, told the Honolulu Star-Advertiser that Hawaii’s January results are in keeping with a forecast given by Aran Ryan, Tourism Economic’s director of industry studies, at the 2023 Annual Outlook &Economic Forecast Forum held Jan. 31 by the Pacific Asia Travel Association Hawaii Chapter and the Travel and Tourism Research Association.

“It was noted at PATA that the economy was going to soften, but travel demand was going to outperform other economic indicators,” Kam said. “When it comes to a market like Hawaii, since we attract a more affluent, experiential traveler, they will continue to travel. They might cut back on spending in certain areas if they can in order to keep to certain budgets, but they will travel.”

Still maintaining momentum in Hawaii’s fragile visitor industry is quite the balancing act, and recovery won’t happen overnight.

Sadayasu added, “With the recovery of tourism, especially international tourism, those businesses that rely on international visitors will experience a better year in 2023, although full recovery may take a few years.”

While international arrivals showed significant year-over-year improvement, DBEDT data showed arrivals from Japan, Canada and all other international markets were down by double digits compared with January 2019.

Last spring a delegation from the Japan Association of Travel Agents visited Hawaii and forecast that the recovery of Japanese visitors to Hawaii would start with the 2022 Golden Week travel period and by year’s end would have returned to 40% of the pre-pandemic 2019 level. Instead, arrivals from Japan finished 2022 down 87.3% from 2019 when more than 1.5 million visitors came. In January, only 32,305 visitors from Japan came to Hawaii, down 73.2% from January 2019 but up 1,033.6% from January 2022.

Gibson, who spoke with the Star-Advertiser from Tokyo where he was meeting with Japanese wholesalers, said there is an expectation that travel demand from Japanese visitors for long-haul destinations like Hawaii will improve once Japan’s mask mandate is lifted in mid-March.

“I think once all that starts to move forward, people will want to travel, and we’ll see some kind of pickup by May,” he said. “We’ll see some pickup, but I don’t think that this year is going to be robust. It’s just going to take a while for the (Japan) market to get going.”

Arrivals from other international markets also are still in recovery mode, but the smaller size of these markets means that the overall health of Hawaii tourism depends less on their presence. Visitor arrivals from Canada were at 56,501, a gain of 139% from 2022 and an 18.9% drop from 2019. Arrivals from the category “All Others,” which included visitors outside of Japan and Canada, hit 89,689, a gain of 195.8% from 2022 and a drop of 20.3% from 2019.

Visitor arrivals by cruise ships reached 16,648, which was up 137.7% from January 2022 and up 38.4% from the same month in 2019.

Results varied across the islands. Oahu, the island most dependent on arrivals from Japan, recovered to 89% of its pre-pandemic level, pulling down the statewide January result. Maui recovered to 98%, and Hawaii island and Kauai had slightly more visitors in January compared with January 2019.

The changing mix of visitors, especially on Oahu, where visitors from Japan are significantly down, also has created new winners and losers.

Many businesses on Oahu that cater to Japanese travelers are still struggling. However, Pleasant Holidays, a Hawaii wholesale travel seller, has benefited from the availability of more hotel rooms since Japanese visitors have a high Oahu hotel utilization rate.

Jack Richards, Pleasant Holidays president and CEO, said, “The fact that the Japanese travelers are not returning is actually good for my business in Hawaii. We are having the best first quarter in over three years.”

Richards said bookings to Hawaii have improved as prices began to moderate and now are running ahead of the same period in 2022 and 2019.

“Price moderation has helped for March, April, May and June travel,” he said.