Total $0.00


Nov. 28--Visitor arrivals and spending declined in October for the second month a row, an indication the high cost of a vacation in Hawaii is slowing growth in the state's No. 1 industry.

Total October arrivals dropped 1.6 percent to 636,245 mostly due to a decline in the number of tourists from the U.S. and the cruise ship market, according to the Hawaii Tourism Authority. The numbers are in keeping with a trend of slower growth in the tourism industry since July. HTA president and CEO Mike McCartney said the declines in September and October are expected to continue through the rest of the year and into 2014.

"Visitors have become more conscientious of their spending as the cost of a Hawaii vacation continues to rise," McCartney said in a statement. "This trend has caused a shortening in the average length of stay. Currency exchange rates and competitive pricing are also affecting visitor arrivals and spending and may contribute to continued declines and potentially move market share to competing destinations."

Arrivals from the largest U.S. West market fell 8 percent, 3.8 percent from U.S. East and 9.2 percent from cruise ships. The drop in domestic arrivals likely reflected a 4.8 percent decrease in scheduled air seats from the U.S. West and an 8.7 percent drop from the U.S. East. Also, one fewer cruise ship came to Hawaii in October 2013 than during the same month last year.

Barry Wallace, vice president of hospitality services for Outrigger Enterprises Group, said the latest numbers could reflect some softness in the hotel and airline industries. Sequestration, the government shutdown, and intense competition from other nearby destinations may have kept some domestic visitors at home or steered them to Mexico and the Caribbean, Wallace said.

"The hotel sector has seen relatively soft occupancies from the second half of October to all of November and the first three weeks of December," he said. "We expect it to be about an eight- or nine-week dip. While we've got occupancies that many cities would like to have, year-over-year these numbers aren't as strong as what we've been seeing."

"That generally means ... airlines will cancel some of their routes to stay profitable," he said. "We've already seen some of that happening, especially domestically."

On the other hand, a pickup in international arrivals corresponded with increased air seats. Scheduled seats increased by 12.3 percent from Japan; 3.3 percent from Canada; 54.5 percent from Oceania; and 20.8 percent from Other Asia, which includes China, Taiwan and Korea. This contributed to gains in international arrivals, which rose 9.4 percent from Japan; 2.4 percent from Canada; and 5.3 percent from Europe and so-called emerging markets including China, Korea, Taiwan and Latin America.

However, the international gains were not enough to increase overall spending. Total visitor spending also dropped in October to $1.09 billion, a 2.6 percent decline from October 2012.

Total spending declines from the U.S., Japan and cruise ships were partially offset by gains from Canada and the all other category, which includes Europe and emerging markets. Visitors from all markets showed drops in average daily spending, which fell 1.5 percent to $195 per person.

Despite the dip in arrivals and spending in October, the industry continued to pace ahead of 2012 for the first 10 months of the year.

"As a whole the year will be a great one. It's probably going to be a record breaker, especially on Oahu," Wallace said. "The last few months have been flat or down, but it's so far ahead on a year-to-date basis that I think we'll remember this year for some time."

Year-to-date visitor spending is up 3.4 percent to nearly $12.1 billion and total visitor arrivals increased 3.9 percent to nearly 6.9 million. McCartney said tourism through October contributed $1.26 billion in tax revenue for the state, an increase of 3.4 percent compared with last year.

"As we prepare for a potential downturn in Hawaii's tourism economy, we continue to focus on driving demand from growing international markets to bolster a softening domestic market and maintain a sustainable tourism economy," McCartney said.

Keith Vieira, principal of KV and Associates Hospitality Consulting, said the visitor industry considers the fourth quarter as more of a blip. Still, travel companies have asked the tourism authority to support an early winter campaign to drive more businesses from cold-weather places.

"We're coming out of three years of very good news," Vieira said. "While I don't think the latest numbers are very bad news, they do point to some concerns on the horizon."

He said that Hawaii "will have to fight and scrape" to increase its market share against other destinations as it heads into next year.

Related News

All News »