Slow growth seen
for isle hotels

By Russ Lynch
Star-Bulletin

Business in Hawaii's resort hotels is expected to show modest growth this year but it's going to take some new approaches to keep it going, according to a national consulting firm.

"While Hawaii continues to be a competitive tourism destination, those in the industry must work smarter than ever to maintain its position in the shifting tourism market," said the report written by Suzanne McConney in the Los Angeles office of the E&Y Kenneth Leventhal Real Estate Group.

In its annual forecast for the hospitality industry, the Leventhal firm described Hawaii as a mature destination where hotels must look for new ways to enhance their performance.

"It must battle intense and expanding competition from newer destinations and cater to a more sophisticated visitor," McConney said.

The Hawaii Visitors & Convention Bureau has been saying the same for some time.

The Leventhal report said changing patterns in worldwide travel have caused Hawaii to lose some of its share of foreign travelers visiting the United States.

But Hawaii is well positioned in the expanding Pacific market, the report said. "The average Pacific market growth rate, of 15 percent per year since 1960, is more than double the world average," the report said.

McConney called Hawaii's hotel occupancy rates "stable" for the last four years but said occupancy is healthy despite the lack of growth and room rates have risen.

The firm predicts a 4 percent increase in visitor arrivals this year.

That is much more optimistic than the HVCB's prediction of a flat year at best.

Barbara Okamoto, HVCB director of market research, said her office's forecast was more negative probably because of late information about the currency turmoil in Asia.

The forecast was based on a poll of travel agents in the mainland, interviews with wholesale and retail agents in Japan and input from travel executives about the Asian crisis.

The HVCB expects Japanese travel to Hawaii this year to be in a range of up or down one percent and mainland travel to be flat or at best up 2 percent.