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Hawaii's Visitor Spending Could Break Annual Record Despite Anemic
Growth in Arrivals; October Spending Up 15.6% to $1.1 billion

By Allison Schaefers, The Honolulu Star-AdvertiserMcClatchy-Tribune Regional News

Nov. 30, 2011--Hawaii's tourism industry is heading into December with a fighting chance to break the record for annual visitor spending despite anemic growth in the number of arrivals so far this year.

Total visitor spending in October jumped 15.6 percent from a year earlier to $1.1 billion, according to statistics released Tuesday by the Hawaii Tourism Authority. The $141.7 million gain was the 18th consecutive monthly spending increase and helped push spending during the first 10 months of the year to $10.3 billion, an increase of 14.8 percent from the same period of 2010.

Annual visitor spending peaked at $12.8 billion in 2007, and the HTA had set an aggressive goal of $12.6 billion for 2011, which officials now expect to reach.

"Our spending is spot on, but there may be a chance to break the record," said David Uchiyama, HTA vice president of brand management. "It's just a matter of, in all honesty, how strong the Asia market comes in during November and December."

Overall visitor arrivals in the first 10 months of the year grew 2.6 percent to 6.034 million, and will likely not meet a 7.4 million-visitor arrivals goal for 2011 set by the HTA. Arrivals peaked at 7.63 million in 2006.

Hawaii hoteliers and other members of the state's visitor industry, who spent the better part of 2009 and 2010 dropping rates to drive demand, have been pushing up prices in 2011 to help regain tourism revenues.

By summer of 2011 demand had returned, said Barry Wallace, executive vice president of hospitality services for Outrigger Enterprises Group.

"Our occupancies have returned to historical levels and are very solid, but average daily rate continues to lag," Wallace said. "Most of us are focused on reducing the level of discounting that we put out and are now seeing how much of the rate that we can recapture."

While travel specials are already out there for December, January and February, offers are not as cheap as they were for the same period last year, he said.

"With less discounting of Hawaii's tourism product, spending increases are looking good year over year and could hit industry records," Wallace said.

Greg Kazmar, a Canadian visitor vacationing on Oahu, said that while Hawaii is more expensive than some other isle destinations, the cost didn't deter him.

"Hawaii is safe, easy and convenient, and it has beautiful beaches," said Kazmar, who has vacationed here about 10 times. "And it's really not that expensive relative to other popular destinations."

The cost of traveling to Hawaii was competitive with other destinations, said Yunis Qazi, a software engineer from San Diego who was vacationing on Oahu this week with his wife, Uzma, and 21-month-old daughter, Zara.

"She wanted to go to New York, but I said it would be too hectic," Qazi said. "We both work so we wanted a relaxing atmosphere."

HTA visitor industry statistics show total visitor arrivals, which declined in June, July and August, rose 2.3 percent to 587,711 in October from a year earlier. An increased airlift and international arrivals helped offset a worrisome 5.1 percent drop in Hawaii's core U.S. West market, officials said.

For the full year, visitor arrivals "will probably come in at 7.3 million arrivals or a little less," HTA's Uchiyama said. "The Japanese didn't come back as quickly as we had thought they would. We were off there by a few months, and we are just missing a little from every market, it seems."

Even though arrivals are off pace, a 0.1 percent growth in year-to-date airlift and full planes are indicators that gains could still come this year or next, Uchiyama said.

He said with planes coming to Hawaii with 90 percent or more of their seats filled, "additional flights will come in, and that creates a good momentum for the market.

"We are in that mix right now, and I'm pretty confident that we'll see additional carriers and new routes coming here."

As such, there are plenty of reasons to be cautiously optimistic about the state of Hawaii's visitor industry, said Brad Mettler, director of sales and marketing for the Hyatt Regency Waikiki Beach Resort & Spa.

"We are seeing a strong fall -- slightly better than what we expected -- and we think that there will be strong marathon and end-of-the-year numbers," Mettler said.

While the HTA will continue shooting for its 2011 targets, Uchiyama said 2012 will be the year when visitor industry efforts pay off. Improvements in airlift and greater interest from niche and emerging markets could bring $13.3 billion in spending and 7.69 million in arrivals to Hawaii in 2012, he said.

If these targets were achieved, it would be the first time since 1990 that Hawaii's visitor industry hit spending and arrivals peaks in the same year.

"I think 2012 is going be our year," Uchiyama said.


(c)2011 The Honolulu Star-Advertiser

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