Visitors spending
less on isle trips

More visitors are coming to Hawaii, but they may be spending less, according to recent state data.

While visitor expenditures have grown 7.9 percent to $1.8 billion during the first couple of months of 2005, per-person spending has dipped 1.8 percent to $159.50, according to statistics from the Department of Business, Economic Development and Tourism.

"We're experiencing what I think is kind of a hiccup in visitor spending, said state tourism liaison Marsha Wienert. "We have seen a remarkable few months of 2005. The domestic market is stronger than it's ever been and the international market, especially the Japanese market, continues to increase."

But the growth runs counter to the state's strategy of building a sustainable tourism industry by focusing on increasing visitor spending rather than attracting more tourists.

"Our criteria is not to increase arrivals, but rather to increase expenditures," said Hawaii Tourism Authority board member Vernon Char, referring to the state's strategic plan for tourism.

That's not what's happening, according to state numbers. Per-person Japanese visitor spending fell 4.8 percent from the previous year to $247 a day.

Those who spent the least included visitors from the U.S. West Coast, at $139 a person per day and Canadians at $125 a person per day.

Visitors from the East Coast are one of the few markets that have been increasing spending, about 2 percent higher at $162 a person per day.

Neither DBEDT nor the tourism authority can account for the drop in spending at the same time arrivals are growing, said state economist Pearl Imada Iboshi.

"[The drop] has been hidden by the fact that overall spending is going up and people are feeling good about the whole thing," Iboshi said. "However, the number of arrivals is not by itself a good enough indicator of the health of the state's visitor industry."

The islands welcomed $1.2 million visitors through the end of February, an 11.3 percent increase over the same period in 2004.

There's no clear explanation for the dip in per-person spending, Wienert said. Hawaii's hotel room rates, which generally represent the bulk of daily expenditures, have risen on all islands and a preliminary look at the numbers eliminates the growth of the state's time-share and cruise markets as the primary drags on the spending figures, she said.

"I have a hard time believing that spending is down, but if expenditures are behind target certainly we'll watch that," said Rex Johnson, tourism authority executive director.

The results are also baffling to some members of Hawaii's visitor and retail industry. The Maui Divers Jewelry chain has posted exceptional growth, with a 24 percent rise in spending during the first quarter, said Bob Taylor, president and chief executive.

"I'm surprised at the visitor data," Taylor said. "We are having record expenditures."

Maui Divers, which tracks visitor data, recorded a 10 percent rise in per-capita spending from mainland visitors during the first quarter, he said.

Japanese visitor per-capita spending dropped off about 15 percent during the same period, Taylor said.

The drop could be related to an overall trend toward value shopping, said Stephany Sofos, a retail analyst.

"Everybody is watching their dollars more," Sofos said. "Visitors may come to Hawaii and stay in a fancy hotel, but more of them are eating cheeseburgers at MacDonald's."

It also could be indicative of the season, she said.

"Right after the holidays people watch their spending. They also start thinking about tax season," Sofos said. "Spending is usually a little down at this time of year."

Rob Solomon, senior vice president of sales and marketing for Outrigger Hotels and Resorts, said he's not going to read too much into the state data.

"If anything, it just validates the strategy of reinvesting in the destination," Solomon said.

The replacement of older lodging with newer products and fresh attractions will attract more first-time visitors and bring higher spending tourists to Hawaii, he said.

"A number of factors are all pointing in the same direction for this destination that over time will bring us new and different visitors that have different behaviors in spending," he said.