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Holding On By Their Fingernails

Hawaii tourism down 6.9% in May — not as bad as past 10 months

Robbie Dingeman,  Jun 27, 2009

About 6.9 percent fewer visitors came to the Islands of Hawaii in May and spent US$133 million, or 15 percent, less than a year ago, but industry leaders were encouraged that the decline in tourism seems to be slowing.

"(May) is the first month it's not down double digits," said Hawaii hotel executive David Carey.

A recent marketing push to attract more west coast visitors, a decline in fuel prices, and hotel discounts have helped, said Carey, president and CEO of Outrigger Enterprises Group.

Before May and April, the state had 10 consecutive months of double-digit declines in visitor arrivals. But even though the numbers are improving, industry officials aren't ready to say the worst is over.

"I feel less bad, but I'm not optimistic," Carey said. "We're still holding on by our fingernails."

For May, total arrivals by air and cruise ships decreased to 516,204. For the first time since February 2008, arrivals from one major market climbed. Air arrivals from the US west last month rose 4 percent compared with May 2008.

But air arrivals from the US east fell 8.9 percent, Japan dropped 15.5 percent — reflecting swine flu fears that erupted in mid-May — and arrivals by air from Canada decreased 12.4 percent, the biggest drop in arrivals for the Canadian market since April 2004.

Keith Vieira, senior vice president and director of operations for Starwood Hotels and Resorts in Hawaii and French Polynesia, said "a little blip in bookings for July" is good but the overall picture remains shaky.

He's pleased to see visitors taking advantage of good values at higher-end properties such as The Royal Hawaiian. But he revised his prediction for a rebound from late this year to summer of next year.

"What's scaring me is the long-term lack of group activity," Vieira said, adding that business groups are still shying away from traveling and from planning trips.

Spending Less

Carey said summer has brought more visitors, but those who come are spending carefully, a trend noted by a variety of industry experts.

While visitors are still eating out at Duke's, Shorebird, and Yard House, the restaurants report diners spending a little less. Carey said they buy less wine or split an entree to save money.

Carey noted that Maui and the Big Island have been hard hit by big drops in visitors and spending, especially missing the east coast market.

Like Vieira, he's heard the fallout from corporations and organizations fearful of creating a bad impression with a meeting in an "exotic" destination like Hawaii. He heard of an organization that flatly said, "We're not going to a place that says resort in it."

And Hawaii retailers feel the pinch of bargain-hunting visitors. "They're looking for deals," said Hawaiian Island Creations general manager B.J. Yap. Yap, who has worked for Hawaiian Island Creations since 1986, said the company sees the effects of the decline in visitors but is hanging in there.

"Our sales are pretty close to last year," she said. "We're down a little. We're kind of holding our own here."

Costco, Wal-Mart, and other discount stores are competing for customers for boardshorts, T-shirts, and even surfboards. "They're all carrying surf clothing now, where before you could only get those in a hard-core surf shop," Yap said.

With locations at Ala Moana and Pearlridge, as well as Kapolei, Kailua, Mililani, and Lahaina, Maui, the surf company founded in Kailua still relies on a mix of residents and tourists.

"It really helps when the waves are good and the weather is good," Yap said. Visitors will buy everything from swimsuits and slippers to surfboards when they realize how good the surf gets here," she said.

Ground transportation company Roberts Hawaii wasn't surprised by the latest statistics. "We're happy to see things begin to flatten out," said marketing manager Dave Mark.

He said the company usually counts on a spike in visitors during the summer, and he's encouraged by the uptick in visitors from the US west.

"We're pretty optimistic that there's a light at the end of the tunnel," he said.

Total visitor days for air and cruise visitors in May 2009 were down 5.4 percent from the same month last year.

State tourism liaison Marsha Wienert said Hawaii is still held back by the global economic crisis, as well as travel fears traced to the H1N1 flu.

"On a positive note, visitor arrivals from the Pacific states, Hawaii's largest source of visitors, rose 5.4 percent compared to May 2008," Wienert said. "California arrivals increased 1.9 percent, Oregon 1.6 percent, and Washington state arrivals grew by 18.5 percent."

Tourism businesses have slowed the decline by discounting rates to lure visitors. And that number is reflected in the total expenditures by visitors.

Those who came by air in the first five months of 2009 spent US$4.1 billion, 16.4 percent lower compared to the same period in 2008, according to preliminary statistics released by the Department of Business, Economic Development, and Tourism.

The plunge in total visitor expenditures for May 2009 resulted from lower average daily visitor spending (US$165 per person, down from US$185 in May 2008) and a 6.4 percent decline in visitor arrivals by air to 514,004 visitors.

Hawaii tourism down 6.9% in May — not as bad as past 10 months
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