Japanese tourism weakens

Arrivals of the state's top-spending visitors resumed dropping last year after a reprieve

Japan, still the country of origin for Hawaii's top-spending tourists and the state's No. 2 visitor market, has turned into the local visitor industry's biggest question mark.

The Japanese visitor market -- which had bounced back in 2004 after falling for several years -- is declining again, with both arrivals and spending dropping in 2006 from 2005, according to a year-end report released yesterday by the state Department of Business, Economic Development and Tourism.

Restricted availability of hotel rooms and flights as well as high airline fuel surcharges have contributed to a softening of Japanese tourism in Hawaii, pulling down arrivals and visitor spending from that country, state Tourism Liaison Marsha Wienert said.

While Hawaii's total visitor spending hit a record $12 billion in 2006, the mild 2.9 percent increase over 2005 left some officials concerned about a continued loss of ground with Japanese visitors, traditionally the state's biggest spenders.

The decline in international travelers to Hawaii flattened overall arrival figures for 2006 at 7.4 million, and total visitor days were 0.3 percent below the record set in 2005. The lone strong spot was the state's westbound visitor market.

"We don't want to be as dependent on the U.S. market as we are right now," Wienert said. "We're all concerned because Japan is still a much-sought-after and important market for the state. We have a strong relationship and we share cultural likenesses; I see no change in the importance of the Japan market for Hawaii's tourism and businesses."

Overall spending by visitors from Japan, who spent an average of $267 per day -- the most of any travel group -- fell 6.5 percent to $2.1 billion in 2006. While the Japanese visitors who came to Hawaii spent 4.7 percent more per day, far fewer of them came to the islands and those who came took shorter trips.

Japanese arrivals declined 9.4 percent to 1.37 million visitors for the year -- a 36 percent drop from the peak 2.15 million visitors that Hawaii welcomed in 1997. The total days the Japanese spent in the islands dropped 10.7 percent as the average trip fell to 5.6 days.

An 18.6 percent decline in wedding- and honeymoon-related traffic from Japan led to a 12 percent decline in Hawaii's overall wedding visits last year, Wienert said.

Hawaii's visitor industry once thought it would bring in 3 million or more tourists from Japan, but the market shifted after 1997 and the state become more reliant on visitors from North America, Wienert said.

The phenomenal success of the domestic segment of Hawaii's visitor industry, which welcomed a record 5.45 million visitors in 2006, has at times squeezed out the higher-spending Japanese.

It has been hard for members of the state's visitor industry to evaluate the decline in Japanese arrivals when business from the U.S. mainland and Canada is on fire. Arrivals increased 2.6 percent from the U.S. mainland and 9.9 percent from Canada -- with the strongest growth coming from the islands' biggest source of visitors, the U.S. West region.

But the dismal performance from Japan appears to have hastened the closure of several Waikiki businesses that relied on traffic from that country, including Kyo-ya restaurant and the nightclub Deep Blue.

Frank Haas, marketing director for the state Hawaii Tourism Authority, was in Japan yesterday to meet with travel agents and wholesalers to determine why Hawaii is losing ground in Japan, Wienert said.

"We need to understand what is happening in this market," she said.

Some recovery in the Japanese market is expected when the Royal Hawaiian Shopping Center and the Waikiki Beach Walk renovations are completed, Wienert said.

"This is a market that likes to see new things and responds quickly to trends," she said.

However, continued recovery will depend on how soon the country's airlines can restore flights that have been cut, Wienert said. Airlines eliminated 7.8 percent of the 1.97 million seats that were available in 2005, she said.

Fuel surcharges, which increased up to $200 per person this year, also will have to come down for Hawaii to compete with other favored Japanese destinations such as Okinawa and Korea, said Yujiro Kuwabara, general manager of tour planning and marketing for JTB Hawaii, Hawaii's largest tour group operator from Japan.

"Going to New York or Paris was much further for the Japanese, but they paid the same fuel surcharges," he said.

JTB already has seen customers begin to respond to slight drops in the fuel surcharge, Kuwabara said.