Asian economic woes
hurt visitor numbers
for 1997

The negative impact
is expected to continue

By Russ Lynch
Star-Bulletin

Mainland tourists flowed to Hawaii in December in big enough numbers to counter a substantial downturn from Asia, but the state's No. 1 industry saw only minimal growth in 1997 and expects another slow year for 1998.

December tourist arrivals were up 2.5 percent, but shorter stays meant tourism's total economic impact was flat, as it was for 1997 as a whole, which saw only a 0.7 percent increase in arrivals from 1996, the Hawaii Visitors & Convention Bureau said today.

The financial turmoil in Asia has put a damper on what appears to be a steady increase in traffic from the mainland.

"The best-case scenario for 1998 is no-growth due to these kinds of external market conditions," said Tony Vericella, HVCB president and chief executive officer.

The important factor is visitor days, flat in December with just a 0.4 percent increase from a year earlier and down 2 percent for the full year, the HVCB said.

One visitor here for one day equals one visitor day, and Hawaii lost more than a million of them in 1997, Vericella said.

"While we ended the year slightly ahead of our no-growth prediction for 1997, the shorter length-of-stay numbers completely eclipsed the marginal increase in visitor arrivals," he said.

"Shorter stays and fewer visitor days mean fewer dollars spent and less tax generated, which hurts the entire state economy."

For all of last year, Hawaii attracted 6.88 million visitors, an increase of just 0.7 percent from 6.83 million in 1996.

Westbound arrivals, even with the December boost, were up only 1.8 percent at 4.08 million for 1997, from 4 million in 1996.

Eastbound arrivals last year slipped 0.9 percent to 2.8 million from 2.83 million.

Visitors from all points stayed an average of 8.43 days last year, down from 8.66 days in 1996.

The result was a drop to 57.98 million visitor days in 1997 from 59.16 million in 1996, a loss of nearly 1.2 million.

For December, Hawaii saw a 10.3 percent increase in visitor arrivals from the mainland, bringing the overall westbound mainland-Europe-Canada total to 337,360 for the month, up 8.9 percent from 309,920 in December 1996.

But eastbound travel -- hit hard by drops from Korea and other countries hurt by the Asian economic crisis -- dipped 5.3 percent for the month, resulting in an eastbound total of 241,100 visitors compared with 254,520 from the Asia-Pacific countries in December 1996.

The result was a 2.5 percent increase in total visitors to 578,460 in December, compared with 564,440 in the previous December.

Japan helped, by not suffering as much from the Asian meltdown as other countries, but the outlook is uncertain, the HVCB said.

"Approximately two-thirds of the loss in eastbound visitors was from our other Asian markets while only one-third came from the Japan market," Vericella said.

However, Korean Airlines plans to cut its service from Korea to Hawaii to five flights a week from seven starting this month. And the other specialist in Korea-Hawaii service, Asiana Airlines, dropped its daily Seoul-Honolulu service early in January.

"The loss in eastbound arrivals is unfortunate but not surprising," Vericella said. "Many of the challenges Hawaii faces in Asia are not within our control, yet we feel their impact."

Hawaii was fortunate in being able to attract more westbound visitors in the fourth quarter of 1997, at about the same time traffic from the Asia-Pacific region began to lag, Vericella said.

The U.S. market will continue to be the bright spot in 1998, he said.

Pleasant Hawaiian Holidays, the biggest mainland wholesaler of package tours to Hawaii, agrees.

"Our January bookings were 23 percent above last January's," said Ken Phillips, a spokesman for the Westlake Village, Calif., company.

"For February, . . . we're already showing a 22 percent increase in advance bookings. Our first-quarter average is 18 percent ahead of last year." The bookings are coming in spite of price increases, Phillips said today.

One concern for Pleasant Hawaiian is that some of that money could be lost if hotels start cutting prices to attract more mainlanders to make up for slower Asian bookings, he said. The company doesn't want to see potential customers hold off on booking trips with the hope that better deals might come along, he said.