September visitor spending down 1.6%
Some fear Japanese declines will pull 2006 totals below last year
With Hawaii coming off a soft September, some members of the state's visitor industry have begun to question whether tourism revenues in 2006 can surpass last year's record.
Japanese arrivals, which plummeted 13.6 percent last month, created the first decline in spending for Hawaii's visitor industry since March, when spring's rain dampened the isles' tourist appeal.
While visitor spending is still up 3.8 percent for the year, overall visitor spending fell 1.6 percent in September to $910.7 million, as tourists from Japan spent 13.3 percent less than they did last year, according to data released yesterday by the state Department of Business, Economic Development and Tourism.
Spending from the U.S. West visitor market was flat, although revenues rose 6.8 percent from the U.S. East and 10 percent from Canada.
Any time the market turns, it should be watched, but it is still too early to tell if visitor spending for 2006 will surpass 2005, said Frank Haas, vice president of marketing for the Hawaii Tourism Authority.
"I don't know that it will," he said. "September is typically a lighter month, so we'll just have to wait and see how the market looks in December."
But he noted that last year's figures left Hawaii safely in a comfort zone. "When you run your numbers over a record 2005, even flat looks pretty buoyant," he said.
The Honolulu Marathon and holiday travel generally spike December arrivals for Hawaii's visitor industry, Haas said. However, some members of the visitor industry have said that performance could be skewed by Waikiki renovations that have made it difficult for some eastbound visitors to find rooms.
"Demand for the Honolulu Marathon exceeds both airline and hotel capacity," said Jim Barahal, president of the Honolulu Marathon.
Last year, the eastbound market brought about 21,000 marathon and walk participants to Honolulu. Registration for these December events is ahead of last year's pace, but it is still unknown how the decline in hotel and airline capacity will play out, Barahal said.
After nearly a year of steady growth, Hawaii's visitor industry first stumbled in March with a 4.6 percent drop in arrivals and a 5.2 percent drop in total days that visitors spent here, caused by heavy rain, the fatal bursting of a Kauai reservoir dam and a shark attack on Oahu. On top of all of these factors, the placement of the Easter holiday pushed most spring-break travelers into April.
Now the Japanese visitor market is declining from strains related to high fuel surcharges, growth in average daily room rates, fewer available hotel rooms and flights, and competition from other destinations.
"We're all concerned," said State Tourism Liaison Marsha Wienert. "The Japan market has been the butter to the U.S. market's bread."
For the first nine months of 2006, Japanese arrivals have fallen by 9.2 percent.
Year to date, Japanese spending, which dropped to $1.6 billion, is down 4.9 percent as compared with the first nine months of 2005. It is a continuing saga for Hawaii's visitor industry.
"The drop in arrivals was not unexpected, given the decline in airline seats and other factors," Wienert said.
Japan Airlines cut two daily flights to Hawaii last November, and fuel surcharges have raised the price of airline tickets from Japan to Hawaii by a third, she said.
But reductions in airline seats are not the primary reason that Hawaii's visitor industry has experienced a substantial decline from Japan, said Gilbert Kimura, regional sales manager for Japan Airlines.
Whenever there is sufficient demand, the carrier has added extra capacity, he said.
"We've doubled the flights for the marathon, but due to the lack of hotel space, many passengers can't come to Hawaii," Kimura said.
Still, like flight capacity, inadequate hotel space is only part of the problem, he said. While Hawaii still holds its 20-year designation as the most beloved international destination for Japanese travelers, some are putting off travel because it is inconvenient and costly, Kimura said. Others, especially younger repeat travelers, are heading to destinations such as China, South Korea and Southeast Asia.
In an attempt to turn the decline, the state's Japanese tourism marketer, Hawaii Tourism Japan, has increased its promotion of Hawaii's unique arts, culture and aloha spirit, Wienert said.
In the meantime, record domestic arrivals are maintaining the overall health of Hawaii's visitor industry. Visitor arrivals from the mainland to Hawaii rose 4.8 percent in September to 402,483, bringing the year-to-date domestic arrival count to 4.1 million, a 2.5 percent gain over the same period last year.
Total arrivals to Hawaii in September remained flat, bringing the visitor tally for the first nine months of the year to 5.6 million, a scant 0.1 percent gain over the same period in 2005.