The ongoing turbulence in the national economy has resulted in the abrupt closure of one of Hawaii's mid-sized whole-sale travel partners and layoffs at the state's largest wholesaler.

Creative Leisure, a mid-sized wholesaler in Hawaii's luxury market, shut down its luxury resort business on Oct. 8 and will focus on the high-end villa business, said Simon Goodall, senior vice president and general manger of the California-based Creative Leisure. The company's existing bookings will be honored, but the long-term Hawaii partner will not be taking any more reservations for its luxury resort business, Goodall said.

Even Hawaii's largest wholesaler, California-based Pleasant Holidays LLC, has not been immune to rising airfares, lowered airline seat capacity and a fallout in the mortgage and banking industries. Two weeks ago the company was forced to lay off an undisclosed percentage of its work force as it headed into what looks to be a challenging fourth-quarter, said Jack E. Richards, company president and chief executive. The company will continue all its Hawaii operations.

The businesses that make up Hawaii's visitor industry have been reducing personnel hours and cutting staff since fuel charges peaked last summer, said State Tourism Liaison Marsha Wienert. Properties have also reduced costs by closing unused wings and towers and cutting unnecessary lighting and other services, she said.

The loss of wholesalers, Hawaii's key sales force, will only make matters worse for the state's visitor industry, Wienert said.

“;We rely on them to sell Hawaii. If there are less of them that can't be good,”; she said.

Hawaii's entire visitor industry will feel the trickle down impacts of what's happening in the wholesale industry, said Keith Vieira, senior vice president of operations for Starwood Hotels and Resorts in Hawaii and French Polynesia.

“;Everyone from the hotels to the lei greeters to the transporters to the restaurants and activities will feel the difference,”; Vieira said. “;Quite frankly, given all that has taken place, I'm surprised that we've only seen layoffs and closures at these two wholesalers.”;

A drop in demand for Hawaii travel combined with key staff changes forced Creative Leisure to abandon its interests in the resort market and refocus on the burgeoning private residential rental or villa market, Goodall said. The company had operated as a luxury wholesaler in Hawaii for 40 years, he said.

“;We really saw a noticeable drop off in demand to Hawaii after the first quarter,”; Goodall said. “;The closures of Aloha and ATA airlines, although we tended to do less business with them, also were most certainly a factor.”;

While Hawaii's high-end segments of the visitor industry used to be more insulated from economic turbulence, the financial implosion on Wall Street has changed everything, Winenert said.

“;People have lost hundreds of thousands of dollars on Wall Street and the loss of net worth has hit some of those folks hard,”; she said.

In the Hawaii market, Creative Leisure will operate as Villas of Distinction, specializing in building Hawaii vacation packages around rentals at its one- to seven-bedroom luxury private residences.

“;This is a segment of our market that we believe will continue to grow,”; Goodall said. “;We want to thank the many other Hawaii partners that we have worked with over the past 40 years. Hawaii has been great to us.”;

The continuing high cost of airline tickets, which began escalating in June, is also responsible for some of the market lag, Richards said.

“;The price of oil has come down but airline fuel surcharges are still costing a family of four more than $1,000 before they even pay their base fares,”; he said.

The Hawaii Visitors and Convention Bureau has joined forces with wholesalers such as Pleasant Holidays to drive travel from key mainland markets with specials below last year's prices, said John Monahan, HVCB's president and chief executive.

“;It's too early to tell the results; however, the media has responded to our message that there are lots of values available in Hawaii,”; said Monahan, who just returned from a media blitz in New York, Boston and Washington, D.C.