Exchange rates are benefiting the Japanese visitors but not Hawaii's contract marketers in Japan.
Yen makes it more costly to market isles in Japan
While visitors from Japan have seen greater buying power due to the weakening of the U.S. dollar against the yen, the currency movement has caused the value of Hawaii's marketing budget in that country to plummet by $781,000.
At a time when the state still is struggling to bring back the declining Japan visitor market, contract marketers in Japan have already had to cancel nearly $400,000 worth of consumer promotions to make up for the shortfall in their buying power, said David Uchiyama, marketing director for the Hawaii Tourism Authority (HTA).
Uchiyama requested that the state transfer up to $600,000 from its planning and research fund so that Hawaii Tourism Japan would not have to further reduce its marketing efforts.
"These guys went through the drill and made some decreases based upon a stinking, sinking (dollar)," said Rex Johnson, HTA president and chief executive officer.
Board members authorized a transfer of up to $400,000 so that HTJ will be able to complete the rest of its budgeted promotions for the year, but declined to appropriate the requested $600,000.
"Why are we increasing funds to pay a contractor that has lost 40 percent of our market share?" said HTA Board Member Stephen Yamashiro. "Our budget is going up and our visitors are going down. Something is not quite right."
Indeed, despite favorable exchange rates, arrivals from Japan hit a decade low in market share last year and haven't recovered. While the exchange rates are very favorable for Japanese visitors, Hawaii has been facing stiff competition from emerging destinations in Thailand, Korea and China. As a result, through February arrivals from Japan were down 4.2 percent and scheduled air seat capacity was down 8.3 percent.
Yamashiro recommended that the HTA should consider whether HTJ is the best marketer for Japan and whether or not more money should be pumped into a declining market when other markets, like Canada, Korea and China, appear more promising.
"We still have a Japan market that is ready, willing and able to travel, but if we want them to travel we'll need to stimulate Japan," said HTA Board Member Kelvin Bloom.
HTA Board Member John Toner recommended that the HTA make this year's Japan marketing budget whole, but said that he would not advise putting additional money toward it.