Tourism fears worst to come

By Michele Kayal
Advertiser Staff Writer

Hotel, retail and other tourism executives say they are still waiting to reach bottom, and that the weakness in the state's visitor industry caused by the Sept. 11 terrorist attacks on the Mainland could continue into next year.

The tourism industry is hoping that more visitors soon will return to fill Hawai'i's beaches — as well as airplanes, hotels, restaurants and shops. Advertiser library photo • Oct. 8, 2001

"People are terribly concerned about the rest of the year," Towill said.

After an encouraging stabilization at the beginning of last month, Towill and others said the numbers plunged again, making the end of October worse than the beginning. Visitor arrivals are off more than 20 percent so far in November, and some executives said the weakness could continue into the first quarter of next year.

Christmas will be the first big test, the executives said, and so far it is soft.

"I have never seen a Christmas pattern pick up so slow in my entire life," said David Carey, chief executive officer of Outrigger Enterprises and a tourism authority member.

The first quarter is usually the nut-gathering season for the hotel business, the period during which occupancy and rates are both high. Some hotels, Carey said, could find themselves short of cash for the rest of the year if the first quarter turns out badly.

Retailers and attractions executives said numbers are not looking up for their clients either.

"I wish I had good news," said Carol Pregill, executive director for Retail Merchants of Hawaii. "It's getting worse."

Sales are down 50 to 70 percent in stores from Ward Center to Waikiki, she said. Local shopping malls are doing better, she said, because they are fueled by resident shoppers. But even mall retailers are becoming nervous, Pregill said, as local people lose jobs and have their hours cut.

Hawai'i stores that are part of national chains are down more than their Mainland counterparts, Pregill said. Many of her members have reduced their work forces between 10 percent and 25 percent, she said, and expect to make further cuts.

Business is down 20 to 30 percent at many Hawai'i attractions, Hawaii Attractions Association president Lori Lum told the authority, due mostly to the drop in Korean, Chinese and Japanese visitors.

Lum said the loss of American Classic Voyages also had a severe impact on her members, many of whom counted on the steady stream of visitors delivered by the company's two weekly cruise ships.

"Our members pretty much wrote off the end of this year," Lum said.

American Classic Voyages declared bankruptcy and shut down its Hawai'i operations last month.

Keith Vieira, senior vice president for Starwood Hotels and Resorts-Hawai'i and an authority member, said temporary solutions — cutting employee hours, closing hotel restaurants at lunch — may soon give way to more permanent, structural changes at many businesses.

Meanwhile, cruise lines provided a small bright spot, according to Bill Thayer, president of Waldron Steamship Co. Ltd.

Since Sept. 11, the number of port calls expected in 2002 rose 13 percent, from 478 to 538.

Thayer attributed the increase to lines that redeployed some ships from places such as Europe and the Mediterranean, and to the newly available berth spaces created by the demise of American Classic.

Vieira said that at the recent convention for the American Society of Travel Agents in New York, agents said the overall feeling about Hawai'i was very positive. The destination mainly is being hurt, Vieira said, because people just do not want to travel.

"It gave you some hope for the future," he said, "but no one knows when that future is."

Reach Michele Kayal at mkayal@honoluluadvertiser.com