Tourism in a tizzy as arrivals fall
Promotions designed to keep business hot during the summer are on the rise
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Hawaii's airline-dependent visitor industry was already struggling with rising fuel costs in March when two high- profile airline shutdowns compounded the problem and reduced access to the islands.
New visitor figures from March -- even before the bank-ruptcies of Aloha Airlines and ATA Airlines cut seat capacity to the islands by some 15 percent -- show the visitor count just below that of last year, although expenditures gained.
Now, members of Hawaii's visitor industry are now trying to stem the compounded impacts of the shutdowns. They are worried not only that some customers will find it more difficult to get to the islands, butthat many will be lured away by less expensive-destinations.
As hotel occupancy rates plummet across the state, promotions designed to keep business hot during Hawaii's peak summer period are on the rise.
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Increased hotel cancellations and less demand for Hawaii in the wake of rising fuel costs and the recent Aloha
bankruptcies have resulted in a plethora of deals running from now until the end of the year.
Hawaii's airline-dependent visitor industry was already struggling, as evidenced by flat March numbers even in the midst of the Easter holidays.
Data released yesterday by the state Department of Business, Economic Development & Tourism showed that total arrivals to the state declined 1 percent to 666,167 visitors in March 2007, compared with the same month a year ago.
Also, while visitor spending increased six percent to $3.2 billion during the same period, that is not necessarily a great selling point for attracting new tourists.
"The March numbers weren't good. They show that demand for Hawaii is down," said Jack Richards, president and chief executive officer of Pleasant Holidays LLC, Hawaii's largest wholesaler. "Easter shifted from April into March this year, so Hawaii should have had more positive growth."
The number of visitors arriving in Hawaii by air in March, -- before the shutdown of Aloha and ATA airlines -- with the percentage change from the same month last year:
Source: Department of Business, Economic Development and Tourism
The continued rise in fuel costs had already begun to affect demand for Hawaii when the state abruptly lost 15 percent of its airline seats from the U.S. mainland, Richards said.
Members of Hawaii's visitor industry are now trying to stem the compounded impacts. They have likened the events of this past month to 9/11 or the United strike in the 1990s or the DC-10 groundings in the 1980s, which crippled Hawaii's visitor economy.
"We seeing that demand for Hawaii is down for the period of April through the remainder of the year," Richards said. "We attribute this primarily to the rising cost of jet fuel and the fuel surcharges that have been imposed. Airfares are up significantly over last year."
Additionally with air capacity to Hawaii down and the elimination of some low-cost fares from the market, members of the state's visitor industry also are worried that some customers might find it more difficult to get to the islands and others might be lured by less expensive destinations.
As hotel-occupancy rates plummet across the state, promotions designed to keep business hot during Hawaii's peak summer period are on the rise.
From the Halekulani, arguably one of the state's luxury leaders, to Turtle Bay to the ResortQuest Hawaii and Castle chains discounts range from 20 to 30 percent off to every fifth night free to value-added benefits like airline discounts, free breakfasts and two-for-one luau and dinner-show tickets.
A recent search on the travel Web site Travelocity.com, for example, turned up 33 properties in town with rooms available for less than $260 per night and 12 properties for less than $130 during the week of April 29.
Most of Hawaii's hoteliers will be discounting or offering value-added specials through the end of the year, said Shari Chang, senior vice president of sales, marketing and revenue management for ResortQuest Hawaii.
"It's going to be a tough year. We are seeing ATA-related cancellations into September," Chang said. "It's having a huge impact and over the summer period many of us are worried that there won't be enough available seats to make up the difference."
While Starwood Hotels and Resorts has not resorted to room-rate reductions, 10 days ago the chain launched the Keep it Hawaii promotion, which offers a $200 airline credit per booking through the end of the year, said Keith Vieira, senior vice president of operations for Starwood Hotels & Resorts in Hawaii & French Polynesia.
"Our cancellations are running about 20 percent higher than usual and there's a lot of value added packaging going on," Vieira said, adding that though the chain usually ends special offers by May 1 it will extend this one through the end of the year.
While Outrigger Hotels & Resorts have not offered customers any panic offers, the chain is carefully monitoring occupancy levels as well as bookings and cancellations, said Barry Wallace, executive vice president of hospitality services for Outrigger Enterprises Group.
"So far we've had about a 500-room-night drop," Wallace said. "We're cautiously optimistic that the fallout won't be significant."
While airfares are going up so far the forward booking pace at Outrigger Hotels has remained stable, Wallace said. Because of Outrigger's reinvestment, guests have been willing to absorb the price point, he said.
"However, if the airlines sell out all their capacity than the hotels won't be able to sell out our hotel rooms," Wallace said. "Many people believe that seats might run out in July and August."