Weakened dollar helps isle visitor industry

Isle travel industry finds silver lining in wave of Canadian and European travellers

Continued weakening in the U.S. dollar might have played a key role in the good news from Hawaii's visitor industry last month.

Visitors from Canada and Europe, especially, were taking advantage of favorable exchange rates, members of Hawaii's visitor industry say. For the first time since the 1980s, the number of Canadian visitor days surpassed Japanese visitor days in Hawaii.

Overall, February arrivals by air rose 5.6 percent to 592,889 visitors compared with the same month last year, and arrivals from Canada soared 31.5 percent. Overall expenditures totaled $1 billion, a 5.2 percent increase from the year before.

The sagging dollar also could be responsible for an uptick in domestic travel to Hawaii, officials say, as affluent East Coast travelers look for a vacation destination that does not require converting a weakened dollar.

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At this time in 2007, Hawaii's visitor industry was struggling to overcome falling demand amid rising vacation costs, an imbalance that resulted in a 2.1 percent drop in arrivals from the year before.

But in February this year, the continued weakening of the U.S. dollar seems to have reversed that trend.

Favorable exchange rates have fueled demand for Hawaii in Canada and Europe, a trend that is expected to continue driving travel preferences. And Hawaii also might be seeing some of this benefit among affluent U.S. travelers who now prefer to make luxury trips to Hawaii rather than spend weakened dollars abroad.

Last month, arrivals by air rose 5.6 percent to 592,889 visitors from the year-ago 561,410. Visitor arrivals from three of Hawaii's top four visitor markets rose, pushing visitor expenditures up to $1 billion, a 5.2 percent increase from the prior year.

Arrivals from Canada climbed 31.5 percent, arrivals from the eastern U.S. rose 4.3 percent and arrivals from the western U.S. rose 1.6 percent.

"We are very pleased by the continued growth in total visitor spending and the increase in Canadian visitors to the state," said Tourism Liaison Marsha Wienert. "January and February 2008 marked the first time since the early 1980s that Canadian visitor days surpassed Japanese visitor days."

The number of Canadian visitor days totaled 618,043 last month, versus 541,561 for Japanese visitors, even though the number of Japanese visitor arrivals during the month was more than double the total from Canada. Canadian visitors tend to spend more time here than their Japanese counterparts.

Total arrivals from Canada, meanwhile, posted their seventh consecutive month of increases. At 44,992 arrivals in February, Canada is still the smallest of Hawaii's top visitor markets. But favorable exchange rates are starting to turn pent-up demand into ticket sales; expenditures were up 30.1 percent, to $94.1 million.

"We honeymooned here 27 years ago and always planned to come back," said Cheryl Webb, a Canadian resident who visited Hawaii in February. She and husband Darcy were accompanied by their 17-year-old daughter, Kaylee.

Of course, Hawaii's sunny weather was another incentive, Webb said.

"It's starting to warm up but it's been cold in Canada," she said. "(In January) it was minus 30 degrees."

Some Hawaii hoteliers have credited weakness in the U.S. dollar in part for the increase in domestic travel to Hawaii that they experienced last month.

"It's just logical," said Keith Vieira, senior vice president and director of Hawaii operations for Starwood Hotels & Resorts Worldwide Inc.

Travel agents are putting more emphasis on U.S. destinations than foreign destinations because of the weakness in the dollar, Vieira said.

"We've been told that many travelers are deciding that Hawaii is a better value," Vieira said.

While arrivals from long-struggling Japan were down 3.2 percent last month to 98,174, change could be on the horizon. Expenditures were up 4.8 percent, to $163.3 million.

"The catch phrase in Friday's Nikkei Shimbun is 'Hawaii iki yasuku,' meaning it's 'easy to go to Hawaii,'" said Dave Erdman, president of PacRim Marketing. Many other Japanese newspapers also are running articles about how it is a good time to go to Hawaii, Guam or the U.S. mainland because of the weak dollar.

That might mean a stronger Golden Week, a peak spring travel season for Japan that coincides with several holidays there, and summer bookings than originally expected from Japan, he said.

Wienert noted, however, that visitors from Japan still face rising fuel surcharges, a shortage of airline capacity and increased marketing efforts from other destinations. But continued improvement in the yen just might make Hawaii a break-even proposition for Japanese travel, she said.

"We began seeing the benefit from the strong Canadian dollar and the decreases in the U.S. dollar last year with increases in travel and spending from that region," Wienert said. "At this point we aren't projecting any increases out of Japan. Our goal is just to stabilize the market."