Where will Hawaii’s tourists come from?
HONOLULU, Hawaii - Tourism is Hawaii’s #1 export industry, so it has to be conscious of where its customers hail from.
HONOLULU, Hawaii – Tourism is Hawaii’s #1 export industry, so it has to be conscious of where its customers hail from. That’s why it is always fun to look at the forecasts published by the Hawaii Tourism Authority (HTA). Let’s take a look at HTA’s best guesses about where they think it’s tourists will come from in 2012. There may be a surprise or two for the direct flight adherents. My data comes from stats released by HTA in its fall market briefing. And here we are talking about okoles (rear ends), not just seats.
Japan: HTA expects arrivals from Japan to climb about 4 percent to 1,322,348 travelers. They expect a stronger yen, which makes Hawaii less expensive to Japanese pocketbooks, and pent-up demand from a reluctance to travel after the 2011 disasters in Japan. I’m not too sure about the yen forecast, but the pent-up demand seems to fit. HTA also cites new charter services and growing seat capacity (that hasn’t been seen yet) to serve the MICE market. MICE is industry jargon for Meetings, Incentives, Conferences and Exhibitions – what most of us might call the meetings market. HTA expects the Japanese to stay about 6 nights and spend about US$295 a day, about a 5 percent increase that presumably reflects their judgement on the strength of the yen over the coming year. Total Japanese spending (i.e., Hawaii exports to Japan) should be US$2,339,800,000.
Canada: Our Canadian friends, said HTA, should benefit from a strong economy and a strong Canadian dollar, and will choose to spend some of their excess cash on Hawaii’s sunny shores. They see visitor arrivals going up 4.5 percent to 468,062. The Canadians will defrost in Hawaii for 12-13 nights and spend about US$158 a day – tight-fisted compared to our Asian customers, but they do stay longer. All told, Canadians will spend US$936,200,000 – a 5.8 percent increase in a single year. The trend is good.
China: HTA’s forecast relies on China’s economy staying strong, a big assumption depending on what happens to China’s export markets. They also forecast a strengthening yuan, which I think will happen in a modest fashion. To the downside, HTA cites slow visa processing, but here, I think we might see a pleasant surprise. New procedures and more personnel in the American Consulate in Shanghai have made a huge difference, and I expect the same changes will be made in our other consulates in China. At the end of the day, HTA expects a nearly 37 percent increase in arrivals from China, which should total 125,394 (don’t you just love the precision?). The Chinese will spend about US$357 a day, down just a bit because the market is moving lower, bringing in a total of US$267,400,000. They should stay an average of six nights.
South Korea: HTA, once again, expects a stable to growing economy, and a strong won, to bring on the tourists. They expect a more than 29 percent increase in Korean travelers to 165,253. The Koreans should stay for 7-8 nights and spend about US$256 a day. So, they will stay slightly longer than the Chinese or the Japanese, but won’t spend as much per day. Their total spend in Hawaii should be US$316,300,000 in 2012. HTA’s contractor, however, notes a superstition in Korea that you shouldn’t travel abroad during a leap year. (This is said to be an “ancient” custom though one wonders how long Korea has used a western calendar.)
Australia & New Zealand: HTA calls it Oceania, but they really mean Australia and New Zealand. We just don’t get that many Fijian tourists. Again, they rely on expectations of strong economies and strong currencies, to forecast a 9.5 percent increase to 235,598 visitors for 2012. HTA also expects those Aussies and Kiwis to stay for 10 nights and spend nearly US$218 a day. That implies total expenditures of US$515,200,000. This is despite what HTA’s own contractor describes as “insufficient marketing funds for branding purposes.” What could they do with real money?
Europe: To HTA, “Europe” means Germany and the United Kingdom because those are the only places they spend any money – and that is precious little. About US$100,000 out of close to US$70 million, last I heard. They are rightly skeptical of European economies and expect the currencies to fall, reasonable assumptions. Despite all that, HTA expects a slight increase in the number of European visitors to 115,995, many of whom are neither German nor British. Europeans spend about US$180 per day, but they should stay in Hawaii for thirteen nights. That means a total spend of US$270,300,000.
There is the big surprise for the so-called tourism “professionals.” Despite almost no marketing and NO direct flights, the poor benighted Europeans are still coming to Hawaii – and still outspending the Chinese in total amount dropped in our islands. Just think what we might do if we tried to entice European visitors. Not to mention all those Latin Americans, Indians, Middle Easterners, and SE Asians on whom HTA spends… absolutely nothing.
According to HTA’s last publicly available budget, admittedly a couple of years old, Japan soaked up more than 60 percent of the foreign marketing funds. And, according to HTA’s own predictions, the Japanese market will contribute about 50 percent of the foreign spend in Hawaii in 2012. What would happen if 10 percent of the budget were moved from Japan to Europe, Australia, New Zealand, and some of those places where no marketing is done now? Heresy, I know.