Posted on: Sunday, May 9, 2004
Tourism expects banner year
By Kelly Yamanouchi
Advertiser Staff Writer
Predictions that 2004 would be a strong year for Hawai'i tourism have proved accurate so far. The state's No. 1 industry is recovering nicely from the past three years of tumult, thanks to a turn in Japan's long-suffering economy and the continuing strong allure of the Islands among Mainland travelers.
Many in the tourism industry just hope that no international catastrophe will get in the way of this recovery.
By state projections, about 6.7 million visitors are expected to come to Hawai'i this year and spend more than $11.14 billion — up from about 6.4 million visitors last year spending close to $10.46 billion. That would make 2004 visitor arrivals the highest since 2000, when more than 6.9 million traveled to the Islands. And the additional $680 million circulating in the state's economy means more jobs and more tax revenue.
"We think that '04 will be a banner year for tourism on all of our islands," said Marsha Wienert, Gov. Linda Lingle's tourism liaison.
"Tourism is very volatile, things could happen that are uncontrollable, but this trend could continue into next year."
In the first three months of 2004, about 1.6 million tourists visited Hawai'i, up 3.8 percent from the same period in 2003. March was even more impressive, with a 6.5 percent increase, including an encouraging 6.6 percent climb in international arrivals from March 2003. To some extent those numbers are to be expected because a year ago the SARS scare and the start of the Iraq war knocked tourism down.
"We're still recovering from all of the challenges we faced over the last three years," said Joseph Toy, president of Hospitality Advisors LLC. "We're still behind 2000 levels. That being said, we're still in a good recovery compared to where we've been."
Toy's overall view is that "aside from any major calamities, I think the indication in the market is to have a stronger 2004."
Just last week, the flows of Japanese vacationing in Hawai'i during Japan's Golden Week holidays were an indication of the recovery in the critical international travel market. Japanese tourism, which accounts for about 20 percent of the state's visitor arrivals, has been one of the most prominent factors holding back a full recovery in recent years.
"We know that Japan is slowly coming back and Golden Week was good," Wienert said. "But we also know that more and more companies in Japan are allowing their employees to take vacation when they want to."
Traditionally Japanese workers take vacation en masse three times a year — New Year's, O-Bon in August, and Golden Week in late April and early May. With more vacation flexibility, Japanese arrivals could increase at other times of the year, Wienert said.
Some key markets including those coming to Hawai'i for weddings and those coming for business have posted improvements, she said. But travel from Canada has declined this year compared with last year.
The Hawai'i Convention Center is bringing in significant business this year, but hoteliers and tourism officials around Honolulu are concerned about a shortage of events at the center in future years.
Cruise business will get a boost with the addition of Norwegian Cruise Line's first U.S.-flagged ship based in Hawai'i for seven-day cruises starting in July.
"It hopefully will introduce people to the Islands that haven't been here before," Wienert said.
"It could be very good for us overall."
This year is also the first time the state is counting on five different marketing contractors developing new promotions around the world for leisure travel to Hawai'i. In the past, the Hawai'i Visitors & Convention Bureau was the state's tourism marketing agency, while today it markets only to North America and corporate meetings and incentives customers.
"There were a lot of hiccups in the first few weeks," and island visitor bureaus are adjusting to coordinating with the different contractors around the world, Wienert said. "I think it's being worked out," she said.
One of the new marketing contractors is Hawai'i Tourism Japan, associated with Japanese advertising firm Dentsu. "HTJ is working very hard to create a buzz in Japan," said Kiyoko Tanji, HTJ's general manager in Hawai'i. "We are getting back some of the Japanese tourists."
A significant factor for tourism is that Japan's economic recovery "is on a firm path," according to a recent global outlook report by the University of Hawai'i Economic Research Organization.
A Japan Association of Travel Agents survey showed that April and May bookings were "quite brisk," with Hawai'i and Europe leading the way.
"The Japanese economy is definitely doing better than it has in a long time," said Sumner La Croix, a professor in the UH economics department and senior fellow at the East-West Center. "We really haven't seen this type of growth in over a decade. At the same time it's fragile growth."
A stronger yen has also helped the travel industry. The dollar traded for about 107.5 yen over the past four months, compared with about 109.8 yen in the four months previous. A stronger yen makes travel to Hawai'i cheaper for the Japanese.
"It's really nice to have that (Japanese) growth but it's a much smaller share of the tourism market," La Croix pointed out. "It's a much smaller share of the Hawai'i economy."
Japanese visitors accounted for about 32 percent of arrivals in 1997, compared with about 20 percent now.
One indicator of the recovery in Japanese arrivals and the steady growth in Mainland visitors is that airlines are adding to Hawai'i. Among the airlines that are planning for additional flights or have recently added service to Hawai'i are American Airlines, ATA, United, Hawaiian and Northwest.
"This year's shaping up to be something to stand up and shout about," said Kelvin Bloom, president of Aston Hotels & Resorts."
"It's encouraging to see the growth this year, but we still have a long ways to go compared to where we were. Thank goodness for the U.S. Mainland because if it wasn't for them we'd be singing an entirely different tune."
Some competing destinations, such as the Caribbean, are doing even better with double-digit growth in tourism, but Hawai'i does not have the inventory — the hotel rooms or the space — to accommodate such growth, Wienert said. That's one reason the Hawai'i Tourism Authority wants to increase the economic impact of tourism by bringing in higher-spending visitors instead of focusing only on increasing the number of tourists flowing in.
As the tourism industry recovers, the question of Hawai'i's carrying capacity for tourists will become more urgent.
For now, tourism officials are just happy to see more business flowing into hotels, retail operations, restaurants and attractions.
"As long as we live in a semi-settled world," said Sharon Weiner, group vice president for DFS Hawaii, "the demand for Hawai'i is going to be strong."
Reach Kelly Yamanouchi at 535-2470, or at kyamanouchi@honoluluadvertiser.com.
