More U.S. visitors offset drop from Japan

Waikiki improvements are credited with also raising spending and average stays in June

Visitor arrivals to Hawaii rose 2.9 percent in June to 670,257, with a drop in Japanese arrivals offset by growth from the mainland and continued strength from Canada.

While foreign arrivals declined during June, arrivals from the mainland increased to a record 519,386, up 7.5 percent over the previous year, according to data released yesterday by the state Department of Business, Economic Development and Tourism.

"For each of the past three months, we have realized positive growth in total visitor days and expenditures," said state Tourism Liaison Marsha Wienert. "Gains in visitor spending continue to help keep our robust state economy moving forward."

The average amount of time visitors spent in Hawaii increased 1.6 percent from last June. Visitors stayed an average of 9.27 days last month and spent $1.1 billion, boosting overall spending in the first six months of the year by 7 percent, to $5.8 billion.

Improvement in Waikiki infrastructure and hotel properties has increased demand for the destination and prompted visitors to pay more for their stay, said David Carey, president and chief executive officer of Outrigger Hotels & Resorts.

"Average daily room rates are substantially up year over year and up over the year before," Carey said. "There's tremendous demand for Hawaii."

Some returning visitors, who make up 63.2 percent of Hawaii's arrivals, have noted that they see improvements, Carey said.

"They keep saying that it's really nice now," he said. "Guests don't mind paying more if they perceive that it's worth it."

While total spending by Japanese visitors has decreased 2.2 percent for the year, the U.S. West and Canadian visitor markets have held strong, DBEDT data showed.

Arrivals from the state's top two markets, the U.S. West and U.S. East, were up 10.2 percent and 4.4 percent, respectively, in June. These two markets represent more than two-thirds of Hawaii's visitors.

"The domestic market continues to perform above expectations, with increases in the number of visitors traveling to Hawaii for pleasure/vacation, to get married and for honeymoons," Wienert said.

While arrivals from Canada rose 12.1 percent in the first half of this year, arrivals from Hawaii's top international market, Japan, fell 8.8 percent as short booking windows, higher hotel room and gas prices and fewer flights took their toll on the market.

Visitor arrivals from the state's cruise ship industry rose by 83.9 percent in June, with about 26,529 visitors touring the islands by ship. NCL America now has three home-ported Hawaii ships.

A 3.1 percent growth in total visitor days -- to 33.5 million days -- resulted in a record first half in 2006, Wienert said. In the first six months of the year, the state welcomed 2,657,472 domestic visitors and 980,093 international visitors.

Year to date, domestic arrivals increased 4.6 percent and international arrivals fell 3.8 percent, resulting in a net 2.2 percent rise in total arrivals.

A strong performance, at least from the mainland, is expected to continue through fall, said Kelvin Bloom, president and chief executive officer of ResortQuest Hawaii.

"The first half of the year through June has been outstanding," Bloom said. "We have enjoyed record revenues supported by record occupancies and average daily rates, and we expect to see continued strength through fall."

Come fall, ResortQuest will have completed more than $15 million in renovations at its Waikiki Beach Hotel, Bloom said.

"We expect strong results," he said.

Hilton Hawaiian Village is also in the midst of renovations that could boost fall revenues. The property's Tapa Tower is undergoing an upgrade, and environmental and landscaping renovations at the Hilton lagoon are expected to start at the end of the summer, Hilton spokeswoman Cynthia Rankin said.

"The water is going to be crystal clear for swimming," Rankin said.