Tourism industry sensing likely impact of war

By Kelly Yamanouchi
Advertiser Staff Writer

Some of Hawai'i's tourism businesses say they already are feeling the impact of travelers' apprehension about a possible war, fears that could further hurt the state's major industry.

It's a precarious situation for tourism. Hotels, airlines and other visitor-related firms are struggling to recover from a severe slowdown following the Sept. 11 attacks.

If uncertainty over military action in Iraq spreads, Hawai'i could see a economic free fall similar to the one that preceded the Gulf War in 1991.

For now, the situation is less than clear. Industry observers say some of the slowness can be traced to a poor economy and a growing trend of visitors booking later than in the past.

Keith Vieira, regional vice president of Starwood Hotels & Resorts, said his company is seeing weak hotel bookings, and attributes that partly to growing concerns about war.

"February does not look very good — a lot of which we attribute to the economy, and perhaps to a larger extent the potential for war," Vieira said. "I don't feel there's been a momentum built out of 2002."

Hawaiian Airlines is recording transpacific flight load factors — which show how full planes are — that are 2 percentage points lower, year to date, than for the previous year.

"It's difficult to put your finger on exactly the reasons for that, but we feel that apprehension over the possibility of war is certainly a factor," spokesman Keoni Wagner said.

Whether war anxieties are the cause, tourism industry managers are bracing for a slowdown in bookings, while many say visitors continue to make reservations.

Outrigger Hotels & Resorts had a 6 percent increase in bookings during the first four weeks of January over the same period last year.

"But should war break out, we suspect that we will see a slowing of reservations," spokesman Jim Austin said. "It really doesn't matter how much advertising or marketing you try to step up. What we typically find is that those that have made their reservations will keep them, but those that were on the border of getting ready to commit and plan for a vacation tend to hold back a little."

Hilton Hawai'i has not seen any noticeable drop in bookings this year, said spokesman George Hayward.

"We've not had any big impact, but we are of course concerned about what will happen if there is a war," Hayward said.

Ron Howard, president and owner of bus company Superstar Hawai'i and Paradise Cruise Ltd., which runs cruises aboard the Star of Honolulu, said bookings for the first quarter are 20 percent ahead of last year, but significantly below 2000 and 2001 levels.

"If there's some kind of Iraq intervention, we know we'll have cancellations," Howard said. "Only two things we can really do is try to sell as hard as we can and try to contain the costs."

The prospect of war is especially worrisome because it comes during Hawai'i's peak winter tourism season after more than a year of inching toward a recovery.

Joseph Toy, president of Hospitality Advisors LLC, said it is critical that Hawai'i's tourism economy stage a recovery in the first three months, when business should be robust.

If war breaks out, "It certainly would be far worse if it occurred in the first quarter," Toy said. He expects a scenario similar to that during the Gulf War: Hotel occupancy plummeted 19 percentage points in the first month, and hotels struggled for another two months.

The biggest declines likely would be seen in the Japanese market.

Japan Airlines has not seen any major change in reservations for travel to Hawai'i, said Gilbert Kimura, sales director for Japan Airlines here. But if there is a war, he said, the impact will be worldwide.

"It's in the back of everybody's minds. ... People will cancel; to what extent is the question," Kimura said. "The most terrible scenario is probably up to about 50 percent drop in bookings."

Danny Casey, president of the Hawai'i chapter of the American Society of Travel Agents, said people making reservations for travel in the summer or later in the year do not seem as concerned about a potential war.

Travel agents, meanwhile, have been recommending travel insurance for those buying large travel packages and concerned about the risks, Casey said.

He said travelers should find out exactly what the insurance covers, and if there are special clauses in case of war or terrorism.

Reach Kelly Yamanouchi at 535-2470 or kyamanouchi@honoluluadvertiser.com.

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