Japan returned more than a year ago to its position as Hawaii’s top source of international tourists, but the market isn’t expected to attain its pre-COVID-19 level of more than 1.5 million visitor arrivals until 2026 or 2027.

Eric Takahata, managing director for Hawaii Tourism Japan, said arrivals remain nearly 50% below pre-pandemic levels, and he anticipates the year will end overall that way. Takahata said there should be a slight summer boost followed by a dip in the fall, and a pickup at year’s end.

“Right now Hawaii is hard to predict, but we do show year-over-year gains. We’re up from 2023 and we’ll be up in 2025 over 2024,” he said. “The goal for Hawaii is to get back to the 70% to 75% of the 2019 level by the end of 2025. We won’t get to 100% until 2026 or 2027.”

Takahata and others familiar with the Japan to Hawaii travel market have been steadily revising their projections downward. In the spring, Takahata had anticipated that the Japan market would rebound to 60% or 70% of the 2019 level by the third or fourth quarter of this year, and earlier projections were even as high as 80%.

“Our hotel, retail and dining partners had planned and hoped for growth and continued rebound in the Japan market for this summer,” said Dave Erdman, founder, CEO and president of PacRim Marketing.

But that hasn’t happend for myriad reasons.

Takahata said U.S. inflation combined with an unfavorable yen rate are among the challenges, though if the U.S. Federal Reserve Board cuts interest rates in September it will help. “If they are slightly raising their interest rates and we are cutting ours, it will help with the currency exchange,” he said.

Helene “Sam” Shenkus, vice president and director of marketing for the Royal Hawaiian Center, said another cost issue is that fuel surcharges continue to add hundreds of dollars to each round-trip plane ticket.

“Our American currency is the strongest in the world so our international business is very, very challenged,” Shenkus said.

Takahata said a newer issue is the confusion that has accompanied the Japan Meteorological Agency’s megaquake advisory after a magnitude-7.1 temblor that struck on Aug. 8 on the western edge of the Nankai Trough. He said the messaging has left some wondering if now is the right time to travel given warnings about the increased likelihood of a stronger quake.

He added that Japanese travelers tend toward caution so global macro issues — like Ukraine making gains in Russia and the perception that the U.S. is getting dragged into the Israeli conflict — also may affect travel plans.

Erdman said another factor is that “some of Hawaii’s best guests might have opted this summer to head to Paris for the Olympics, or stay at home to watch their favorite Japanese Olympians live on Japanese TV, despite the time zone differences and cost to travel to Paris.”

Some of the challenges are evident now during Obon week, which traditionally is one of Japan’s three major holiday periods outside of New Year’s and Golden Week. Obon in mid-August is rooted in Buddhist tradition commemorating ancestors whose spirits during this time are believed to return to visit relatives.

Golden Week (which took place April 29-May 5) is the traditional peak Japanese travel season, and was better this year than last. But it wasn’t the gold mine that it once was.

Jean Dickinson, chief integrated marketing officer for PacRim Marketing, said before COVID-19, visitor arrivals were robust for the August Obon holidays, but that has been fairly lackluster too.

The Pokemon World Championships currently under way with its 14,000 ticketed attendees, also has brought a bump.

Chris Brown, Pokemon Co. International’s director for global esports and events producer, said some 365 players came from Japan and brought at least two guests each.

The Pokemon Co. International and All Nippon Airways have been welcoming guests arriving on ANA’s specially painted “Pikachu Jet NH,” which showcases the Sky High Pokemon Rayquaza on the fuselage, accompanied by other flying Pokemon like Charizard, Latias, Latios, Vivillon and Pikachu.

“The exposure that Hawaii received from hosting the Pokemon World Championships definitely gave us a boost from Japan. We’re hoping to host more events and groups like this to stimulate travel to Hawaii,” said Duke E. Ah Moo, Hilton vice president and commercial director of Hawaii and French Polynesia.

Shenkus said travel patterns haven’t altered much for Hawaii’s wealthy Japanese visitors, who might even own property here. However, she said normal Japanese travelers, especially family groups, are increasingly price conscious.

“We have families that are coming and they pack ramen in their luggage. You get people that just want hot water,” she said. “Our restaurants are steady, but they aren’t packed like the food court. You might see a family of four or five buying one or two meals at the food court and splitting. If you aren’t uber wealthy but Hawaii is a dream, you make it work.”

Shenkus said Japanese shoppers also are “following a list and staying on budget.”

She said the center gets calls weeks out from Japanese visitors who are inquiring about how to attend the center’s free hula and lei making classes, which offer strong value-added benefits.

Dickinson said clients who serve the Japan market expect occupancy in 2024 to finish nearly flat compared to 2023. Still, she said that “some of our forecasts are showing that rooms are starting to fill in during the remainder of the year and we are all hopeful that the new campaigns will yield positive results.”

Erdman said properties offering value-oriented packages or competitive rates have seen uplift in the market share for family and value-minded travelers.

“Overall, the feeling is some disappointment in the summer business from Japan. The pace for the fall looks like it lost some momentum, and usually September with Silver Week holidays from Japan is positive, ” Erdman said. “It is hard to tell this year as bookings are coming in very late, and with the exchange rate adjustments — the yen was at 147 Friday — we are hopeful to see some late pickup for September with Japan’s extended summer travel time period.”

Earlier this summer, Erdman said there were some airfare sales that got a bump in Japan bookings, but when that ended Hawaii also saw “near-in” bookings slow.

“Overall, the Japanese continue to be great customers and guests, and now it will be up to individual companies and organizations to get their ‘share’ and ‘spend’ from these Japanese travelers — meaning smart marketing and messaging is more important than ever,” he said.