Visitor count edges down

STORY SUMMARY »

For Hawaii's visitor industry, the end of 2007 is likely to echo that of 2006, which ushered in the New Year with a decline in arrivals and a slight gain in expenditures.

It was a very good run, but as the November and year-to-date performance for 2007 indicates, the exuberantly good times are likely over.

Visitor expenditures rose to $933.8 last month, only 0.1 percent above November 2006 levels, according to data released yesterday by the Department of Business, Economic Development and Tourism. And, expenditures for the first 11 months of the year totaled $11 billion, a mere 0.6 percent gain from the same period last year, DBEDT said.

Visitor arrivals and spending from Hawaii's highest-spending source markets, Japan and the U.S East, were down for both November and the year. In addition, Hawaii's top-traffic market, the U.S. West, has had its own problems. In November, arrivals in Hawaii's from that region grew a scant 1 percent to finish out the first 11 months of the year with a mere 0.7 gain. And, while expenditure gains for the U.S. West market were the highest of any except Canada, they were low for both the month and the year to date.

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Hold the champagne.

Not too long ago, the state's visitor industry seemed to be on an unstoppable trajectory to break the 7-million-visitor record it achieved in 2005.

But like Hawaii's hot housing market, the state's visitor market seems to have cooled, with the best that can be hoped for is that it will hold steady into 2008.

It was a very good run, but as the November and year-to-date performance for 2007 indicates the exuberantly good times are likely over, and Hawaii's visitor industry will have to work hard for its supper like everyone else. Looking back, though, members of Hawaii's lead industry have been singing that song all year long.

Visitor expenditures rose to $933.8 million last month, a scant 0.1 percent above November 2006 levels, according to preliminary statistics released yesterday by the Department of Business, Economic Development and Tourism. And, expenditures for the first 11 months of the year totaled $11 billion, a mere 0.6 percent increase from the same period last year, DBEDT said.

And arrivals, which peaked in 2005, fell another 1.1 percent to 6.7 million.

During the Hawaii Visitors and Convention Bureau luncheon in 2005, Starwood Hotels & Resorts' Karen Hughes summed up the state of Hawaii tourism by saying, "These are the good old days."

Unfortunately, Hughes was right. Last year, the pressure was on to beat 2005's record industry performance, which didn't happen. This year, there's pressure just to keep up.

Visitor arrivals and spending from Hawaii's highest-spending source markets, Japan and the U.S East, were down for both November and the year. And, spending for these has also leveled off.

In addition, Hawaii's highest-traffic market, the U.S. West, has had its own share of struggles. In November, arrivals in Hawaii's top market grew a scant 1 percent to finish out the first 11 months of the year with a mere 0.7 percent gain. And, while expenditure gains for the U.S. West market were the highest of any except Canada they were low for both the month and the year to date.

"We are experiencing a slowing of business from North America in 2007," said John Monahan, the director of the HVCB at the organization's annual luncheon earlier this year.

In the times to come, Hawaii will face challenges from improved competitors and emerging destinations that span the globe, Monahan said.

Monahan added that in 2008 and beyond the state's lead industry also will have to find a way to address three key challenges:

» Consumers have more travel options than ever before;

» Consumers are traveling more frequently, but making shorter trips closer to home;

» Time-impoverished consumers are looking for convenience.

"None of these points is good news to an established, mature destination who also happens to be the most isolated land mass on the globe," Monahan said. "It is therefore critical that our product and service continue to improve to stay ahead of this time value equation."

Despite decreasing visitor count, satisfaction levels remain high Satisfaction levels among visitors from the U.S. West, Canada and Europe were their highest in two years in the second quarter of 2007, according to newly released data from the Department of Business, Economic Development and Tourism As many as 71.8 percent of visitors to Hawaii from the U.S. West said that they would have rated their second quarter trip to Hawaii as excellent, which represented a 4 percentage point increase from the same period in 2006. Overall, visitors from the U.S. West, Hawaii's top market, tended to rate the islands lower than their U.S. East counterparts. From April to June of 2007, 73.4 percent of U.S. East visitors rated Hawaii as excellent, a slight drop compared to 74.8 percent a year ago. As many as 70.9 percent of Canadian visitors said that they had an excellent stay in Hawaii, a 3.2 percentage point decrease from the same quarter in 2006. The steadily declining Japan market showed little change in satisfaction levels with 52.5 percent of Japan visitors rating their second quarter trip as excellent compared to 52.8 percent last year. Among Hawaii's relatively few European visitors, 70.9 percent rated their Hawaii experience as excellent as compared to 69.5 percent in 2006.

The end of 2007 is likely to echo that of 2006, which ushered in the New Year with a decline in arrivals and a slight uptick in spending, said State Tourism Liaison Marsha Wienert said. But she added that there is cause for optimism in the industry.

"Visitor spending remains strong, and the overall condition of Hawaii's visitor industry remains stable," Wienert said. "Overall, we're doing very well."

However, one of Hawaii's major challenges moving forward will be to try and attract more first-time visitors, she said. The number of repeat visitors coming to Hawaii increased in 2007, with the split at 64 percent repeat and 36 percent first-time visitor during the first 11 months of the year, Wienert said.

As a result of the visitor mix, hotel occupancy is down and occupancy at timeshare and condominium accommodations are up, she said.

"That's a concern for the state because historically timeshare and condo guests don't tend to spend as much as hotel guests," she said.

On the one hand, the state's changing visitor mix presents a challenge for the state; however, it has its positive aspects, Wienert said.

"So many repeaters mean that the visitors love us. They all want to come back, and that's a good thing," she said.

There were quite a few other highlights in November, Wienert said.

"We are particularly pleased with the increase in the total number of visitors who came to honeymoon and get married in November, and the continued strong growth in arrivals from the Pacific Northwest," Wienert said.

Arrivals from Washington state, which have grown every month since May 2006, jumped 32.8 percent in November 2007, according to DBEDT. Contributing to the November increase was the addition of Alaska Airlines' direct flights from Seattle to Honolulu and Lihue in mid-October. Year-to-date, visitors from Washington have risen by 13.5 percent, DBEDT said.

Likewise, arrivals from Oregon rose 2.3 percent in November and 8.4 percent year to date, DBEDT said. Oregon visitors have shown year-over-year growth for 22 out of the past 24 months, DBEDT said.

Honeymoon traffic to Hawaii increased 10.1 percent in November with the number of honeymoon arrivals up 1.7 percent year to date. Similarly, the number of visitors who came to the islands last month to get married rose 6.6 percent from the same period last year.

Cruise ship arrivals to Hawaii grew 6.9 percent in November and 23 percent year to date. So far this year, there have been 72 cruise ship arrivals as compared to 58 in the same period last year.