The HVCB says figures for 1997
will barely top last year's and are
expected to be level, at best, next year

By Rob Perez
Star-Bulletin

Despite the third consecutive month of gains, Hawaii's tourism count for 1997 will barely top last year and the industry expects a flat year -- at best -- for 1998, according to a forecast released today.

Hawaii's No. 1 industry is expected to finish the year with only a half-percentage-point gain over 1996's 6.87 million tourists, the Hawaii Visitors and Convention Bureau said.

And with the financial crisis in Asia remaining a wild card for Hawaii tourism, the bureau is projecting a flat 1998 -- even under the most optimistic conditions.

If that forecast holds true, Hawaii's struggling economy isn't likely to get a boost from the industry -- bad news for isle residents already suffering from record foreclosures and bankruptcies and little, if any, job growth.

"The biggest question mark for 1998 is the Asian economic crisis and its effect on Hawaii's visitor industry," said Tony Vericella, HVCB president. "The impact of the Asian situation will not be limited to Asia. It is already being felt on the mainland. Ultimately, arrivals from Japan and the U.S. could be affected by worsening economic conditions triggered by the economic crisis in various Asian countries."

Tempering the pessimistic forecast was November's growth in visitor counts and the amount of time they spent in the islands.

Total arrivals increased 3.9 percent to 540,500, the bureau said, while visitor days were up 2.8 percent.

"November was another much needed shot in the arm for Hawaii's economy -- the third month in a row that we have had increased arrivals and visitor days," Vericella said.

But for all of 1997, the agency expects a mixed bag.

Hawaii should end the year with slightly more visitors than 1996, but the key statistic of visitor days will remain slightly behind last year's levels, translating into fewer dollars spent and less tax revenue generated for the state, HVCB said.

Weakness in the Japanese market -- a critical one for Hawaii -- has resulted in year-to-date eastbound arrivals that lag 1996 by 0.6 percent and a loss of 3.7 percent in eastbound visitor days.

But better performance from the U.S. mainland and European markets resulted in an 11-month increase of 1.2 percent in westbound arrivals and a 0.4 percent gain in visitor days, the bureau said.

The tourism tallies for Oahu and Maui were essentially flat through the first 11 months of the year, while the Big Island, helped by the start of direct air service from Japan, enjoyed a 4.3 percent gain.

Kauai's tourism count also was up 1.1 percent through November.

The bureau based its 1998 outlook on a November survey of 351 travel agents in North America and Japan, as well as interviews with key industry executives throughout Asia.

The survey was taken, however, before the financial crisis in Korea, Indonesia and Thailand surged in recent weeks.

Based on the survey, the agency expects the westbound market to grow as much as 2 percent next year, but that will be offset by litte or no growth in Japanese arrivals and economic turmoil that will affect visitors from other parts of Asia.

The weak yen, a weak Japanese economy, the Korean economic crisis and the likely devaluation of the Taiwan dollar are factors that could especially affect Hawaii's tourism picture, the agency said.