Sheraton Princess Kaiulani general manager Fred Orr has picked up on a new way to measure tourism spending — the trash cans in guest rooms. When you see a lot more Burger King, Pizza Hut, and McDonald’s wrappers, it’s clear tourists are cutting corners.
Orr’s unofficial trash-can index highlights the dual challenge facing the state’s no. 1 industry: it needs to get more tourists to come and to get the ones who do visit to spend more.
While Hawaii’s visitor arrivals in the first half of this year are down about 10 percent from a year ago, spending is off 15 percent. That translates into US$900 million less flowing into the state in six months.
For the staff at the Princess Kaiulani, it means “maybe you don’t work as many hours as you used to work, or you don’t work as many days,” Orr said.
But it’s hard to blame the tourists. The travel industry is thrilled they are still coming to Hawaii amid the worst economic climate in decades. And you have to expect they will pinch pennies.
Take Keri and Mike Bame of Utah. The couple came to Hawaii this month for their honeymoon and were grabbing sandwiches and shopping for lunch in the Kuhio Avenue Food Pantry supermarket for some of their meals.
“Normally, we vacation — we eat out,” Keri Bame said. “Now, we tend to be a little bit more frugal.” When they shopped for a hotel, they chose the Aqua Surf because it included breakfast, a kitchenette, and other amenities. “I think you can still do fun things but you need to be more creative and more cost-conscious,” Keri Bame said. And that’s a change for them, as well as taking a shorter vacation, one week instead of two.
Two visitors from Milan, Italy — Eleonora Cassinelli and Diego Tomassone — recently spent US$30 for groceries in Waikiki, picking up a mango and some taro chips, as well as salmon and bagels. They said shopping local makes sense to them for the more authentic experience, as well as the savings.
In one extreme example, a general manager at a luxury Kohala Coast resort dropped his jaw when one of his well-heeled guests rolled into the porte cochere a few weeks ago and unpacked five bags of groceries alongside his family’s luggage.
Barbara Campbell, Outrigger Enterprises Group vice president for retail development and leasing, said she looks at the bags people in Waikiki are carrying to help gauge spending. “You do see a lot of plastic bags from convenience stores, from ABC stores, Coco Cove, from Food Pantry,” Campbell said.
Foodland corporate chef Keoni Chang has noticed the change. “People are buying the deli meats by the pound,” to make meals in their rooms, he said. “And we’ve seen an increase in our liquor sales. They’ll pick up a bottle of wine and take it to their hotel.”
Bill and Shaylah Warner-Hall of Moscow, Idah, flew to Hawaii for their five-day honeymoon. They stocked up on groceries for most of their meals at the Food Pantry and budgeted for one splurge. “We’re going to go out for one nice dinner,” Shaylah Warner-Hall said.
State tourism liaison Marsha Wienert said businesses are adapting where they can, but they have to cut employees’ hours and lay off workers when business drops. In addition, “The restaurants have reduced hours and reduced personnel,” she said, “From Starbucks to the five-Diamond properties, it’s being felt because that spending is not trickling down.”
To adapt to the spending shift, Princess Kaiulani’s Orr said his hotel changed the menu in the restaurants and lowered prices and picked up business. “We developed a US$10 take-away plate for breakfast,” he said, where guests can choose what they want from the breakfast buffet and take it with them. They cut the dinner buffet price from a weekend high of US$39.95 to US$29.95 every day.
Restaurant owner Bob Bach has four locations in Waikiki — two Round Table pizzas, one deli and Giovanni Pastrami, which has deli, pizza, and pasta. The Lewers Street location has struggled with fewer tourists in town, but his Round Table Pizza at the Hilton Hawaiian Village has seen record high sales from April through July because of the low prices. “When they see my pricing, that’s a good value,” Bach said.
Retailers have also retooled, offering frequent promotions and selling items at lower prices. Maui Divers president and chief executive officer Bob Taylor estimates spending per transaction dropped about 20 percent since the economy declined. “We’re definitely seeing the falloff,” Taylor said. He said the company’s sales people work “really extra hard” to make sales. In addition, he said, “We’ve introduced a significant number of sterling silver items, which we had not done before.”
Restaurants are surviving by offering specials as well, said Outrigger’s Campbell. “The restaurants are faring better than retail,” Campbell said. “People need to eat. They don’t have to buy that piece of jewelry or that piece of art.”
Restaurant owner Bach said one concierge told him the most frequent request he got in years past was for a list of the best restaurants. He said that’s now changed to directions to the nearest Wal-Mart, Target, or Costco.
Foodland chef Chang said his company is constantly adding grab-and-go sandwiches, salads, sushi, and easy-to-prepare foods at the two Food Pantry supermarkets it runs in Waikiki and at the Coco Cove convenience stores. “We are definitely seeing the frugal tourist niche.”