The full recovery of visitor arrivals from Japan, one of Hawaii’s most coveted source markets, continues to fall short, and a complete return to 2019 levels could take until 2026.

Eric Takahata, managing director for Hawaii Tourism Japan, said the first quarter is tracking about the same as the disappointing fourth quarter of 2023. But he said some pickup is expected for the Honolulu Festival, the peak seasonal Golden Week and the Honolulu Marathon, an event that traditionally draws Japanese arrivals.

Takahata said summer holds the promise of more traffic because of some abatement to U.S. inflation. Also, monetary policies in both countries are expected to narrow the gap between the dollar and the yen.

Takahata said earlier this year the travel industry was forecasting that Japanese arrivals to Hawaii would be recovered by as much as 70% or 80% of 2019 by year’s end. However, he said current market conditions are difficult to read.

“If you are talking about 100% of what Hawaii had in 2019, then it’s probably going to be 2026,” he said.

The return of the Japan market to Hawaii has been much anticipated, and frankly over-promised. As far back as 2022, a delegation from the Japan Association of Travel Agents visited Hawaii and predicted that in 2023 Hawaii would see the Japan market restored to its 2019 level of more than 1.5 million visitor arrivals.

In July an inaugural Hawai‘i-Japan Sister State and Sister City Summit drew hundreds of senior government officials and business and civic leaders with the aim of revitalizing sister relationships in the wake of the pandemic to create new initiatives to boost trade, direct investment and improve collaboration between Japan and Hawaii. During the summit, the outlook for full recovery of the Japan tourism market to Hawaii was over-optimistically targeted for the end of this year.

The continued shortfall is a huge cause for concern for Hawaii’s greater economy as plenty of tourism infrastructure and businesses have been built around catering to more robust visitor arrivals from Japan. Hawaii businesses that specialize in the Japan market also have noted that the continued downturn in arrivals from Japan has affected recovery of Hawaii’s film industry and educational exchange programs.

Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism, said during the 2024 Annual Outlook &Economic Forecast Forum for the Hawaii Chapters of the Pacific Asia Travel Association and the Travel and Tourism Research Association that between 2019 and 2023 Japanese arrivals dropped from a 15.4% share of Hawaii’s overall arrivals to a 6% share.

Japan travel sellers and marketers told the Honolulu Star-Advertiser that the Japan visitor market has lagged returning to Hawaii for a variety of reasons. One of the key reasons is that the Japanese government did not lower its COVID-19 threat and put it on par with the flu until May.

More recently, the issue has been high airline fuel surcharges and an unfavorable exchange rate due to the strong dollar. That’s been exacerbated by U.S. inflation and aggressive marketing from other other destinations like South Korea and Guam as well as Europe.

Ted Kubo, president and CEO of JTB Hawaii, said during the PATA/TTRA event that if customers “used to pay $3,000 for a trip, it’s at least $4,000 now.”

Kubo said fuel surcharges have come down some but still range from $300 to $400 per person round trip. He said that’s part of the reason that South Korea and Hawaii now are tied for the No. 1 travel destination in JTB’s most recent survey of customer travel demand.

Moreover, he said, another concerning development is that there are signs that the younger generation of Japanese travelers has lost some interest in Hawaii. He said a reason might be that since the pandemic, fewer of them have traveled overseas for school or cultural exchange.

Kubo added, “During this time there also were YouTube social media posts that the younger generation watch, and at one point you see so many, ‘Oh wow, this one bowl of ramen cost me $30.’”

In response, Kubo said JTB Hawaii has increased its value proposition by offering Hawaii-bound customers airport shuttles, trolley service, hotel lounges, customer service stations and packages that include meals or activities.

Despite the roadblocks, there are opportunities for Japan to rebound. Takahata said the Hawaii Tourism Authority approved a $9 million budget for the Japan market for 2024 — the first time since 2019 that the budget has been fully restored. He said HTA also approved pivoting from a strictly malama (take care of) Hawaii marketing campaign to two new campaigns called “Beautiful Hawaii” and “It’s Got to Be Hawaii.”

“The airlines and wholesalers had said that the malama messaging wasn’t driving business. The new campaigns, which are getting back to a more aggressive approach, have been well received,” he said.

Dave Erdman, founder, CEO and president of PacRim Marketing Group Inc., said getting visas for entry of media from prime-time TV shows, their actors, celebrities and comedians will prove critical to getting out the right messaging.

“This barrier is important to focus on as the positive media coverage, particularly on nationwide television, is critical to building demand now,” Erdman said.

Takahata said the rebound of arrivals from Japan to Hawaii also is dependent on the continuing restoration of air seats. He said Hawaiian Airlines has pulled some of its service from Japan since its proposed merger with Alaska Airlines was announced, causing a minor disruption in the market.

Erdman opined that Hawaii has decent airlift and seats in the market compared with 2019. He said Hawaii needs to be thankful to Hawaiian Airlines for restarting service from Fukuoka and opening that market, and for all the lift during COVID-19 and early post-COVID-19 that fueled the rebound.

He said Delta Air Lines is flying again from Haneda, and ZIP Air is in the market from Narita. Erdman said ANA’s double-daily A-380 also has added more premium seats to the Japan- Hawaii market, “which is key to growing that important higher-spending and revenue market.”

“The bottom line is, if the destination has strong demand, the carriers will respond,” Erdman said. “We have to create the demand — all of us in the industry,” he said.

Erdman said investment and effort in digital marketing and public relations also is needed and is critical to success in the evolving Japanese traveler journey post-COVID-19.

“We need to get smart marketing intelligence, adjust our messaging, and the industry who desire Japanese visitors needs to be creative and smart on their target marketing to gain share and spend,” he said.