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As others see us:
Pricey, but now
willing to dealAT 9:40 a.m. on Tuesday, Sept. 11, 2001, the planes stopped flying. Honolulu International Airport remained closed until Thursday.
By Saturday, Sept. 15, more than 4,000 Japanese tourists remained stranded on Oahu, many standing in line for hours. Japan Airlines was flying 12 flights a day to catch up with the backlog of travelers trying to get home.
Hawaii's economic engine, tourism, seized up like an oil-starved V8. Layoffs and bankruptcy filings surged. Hawaiian Airlines alone sent 430 workers home. Between Sept. 10 and 22, more than 5,600 isle residents filed for unemployment benefits.
As legislators and social service agencies struggled to keep the boat afloat, Hawaii resorts struggled to prop up their prices. The Hawaii Visitors and Convention Bureau encouraged hotels to be patient, to "maintain brand integrity" by not slashing prices, and launched a $10 million marketing campaign.
"Unlike places such as Las Vegas and Florida," wrote Wall Street Journal travel writer Nancy Keates, "most of Hawaii kept prices high and balked at discounts earlier this year."
In an article last Friday headlined "New in Hawaii: Bargains," Keates quoted Jason Ader, hotel analyst for Bear Stearns, who said Hawaii "has priced itself into a recession."
TODAY, in what Keates describes as "normally one of Hawaii's strongest times of the year, when deals would be rare," island hotels are changing their strategy and offering bargains. She cites room rates, down overall 16 percent from a year ago, and deals such as a free extra night's stay, free golf and food and beverage credits.
The reason: "The islands find themselves in an odd space, missing out on travelers who are slowly coming back in the post-Sept. 11 era."
Keates quoted an Outrigger spokesperson: "We are getting really nervous. Most of our business used to be booked six months out, but now we look ahead a few months and see lots of rooms available."
One reason is that Japanese visitor numbers remain down -- eastbound arrivals are 17 percent lower than a year ago. Travel from the U.S. mainland remains steady, as do airfares, which Keates says now "are the make-or-break expense for many travelers."
THIS NEW willingness to cut deals is seen against a backdrop of high price expectations. As Keates puts it, "notoriously pricey Hawaii may be the deal of the season. After raising rates for much of the past decade, even as occupancy rates fell, hotels on the islands are starting to bargain."
Hawaii has created its image as a dream vacation destination that can demand high prices. During the last decade, rates went up every year -- a total of 35 percent over the period, Keates wrote. Perhaps that has backfired.
She complains that "you still pay Manhattan rates -- $500 a night" for an oceanfront room in the Kahala Mandarin Oriental, although today you'll be offered a fourth night free if you pay for three. The Orchid at Mauna Lani is offering oceanfront rooms for $605, she says, but will throw in a second room for $20.
David Preece of HVCB said in February, "Many hotels learned as a reaction to 1991's Gulf War that when they make sudden drops in room rates, it's very difficult to raise them back to normal levels as the market starts to pick up," hence the strategy of keeping prices high while offering extra nights and other enticements.
This exposes an industry in denial, unwilling to concede that times have changed. Unfortunately, it is a new world -- a world with airlines struggling to survive, airports changed into armed camps and cutthroat competition from other destinations.
The further we get from Sept. 11, the more we want to pick up right where we left off Sept. 10.
If only we could.
John Flanagan is the Star-Bulletin's contributing editor.
He can be reached at: jflanagan@starbulletin.com.