Posted on: Saturday, September 11, 2004
Tourism rebounds in 9/11's shadow
By Catherine E. Toth
Advertiser Staff Writer
Three years after the Sept. 11 terrorist attacks, Hawai'i's tourism industry is finally recovering.
Visitor arrival numbers reached record-high levels this summer, boosting visitor spending and filling hotel rooms across the state. Waikiki is bustling again, and the Neighbor Islands are benefiting from more direct flights from the Mainland.
But despite the stellar summer, people remain mindful of the vulnerability of the state's No. 1 industry.
"The main thing we've learned is now we face a permanently uncertain future," said Sharon Weiner, group vice president for DFS Hawai'i, which runs duty-free shops at Honolulu International Airport and in Waikiki. "We will be living in the fear of terrorism forever."
Total visitor arrivals in July were up nearly 11 percent from the same month last year. Domestic arrivals by air rose 7.2 percent in July to 504,692, the best July on record. International arrivals saw an even bigger increase, up 22.1 percent from last year. It was the fifth consecutive monthly increase in international visitor arrivals.
Those numbers are expected to continue to rise, with industry stakeholders hoping for a record fall season, typically slow months for tourism.
"I think business has returned to pre-9/11 levels," said David Carey, chief executive officer of Outrigger Enterprises Inc. "But what it brought home was how vulnerable we can be to world events. That still looms out there, even though the memory fades when business is strong. We talk about it all the time ... We worry about it, but there's not much we can do about it, frankly."
Right after Sept. 11, companies had to downsize, streamline operations and figure out creative ways to fill hotel rooms and airline seats.
That, in a way, forced the industry to diversify, which has become a key component of strategic plans today. The number of coveted U.S. East visitors, who tend to stay longer and spend more, has risen over the past three years, as Hawai'i became viewed as an exotic leisure destination still within the safety of the United States.
"We learned to better balance our markets," said Keith Vieira, senior vice president of Starwood Hotels & Resorts Hawai'i. "That was true before 9/11, and it's true after."
Vieira said the terrorist attacks changed the way many people viewed leisure travel. Instead of coming to Hawai'i to lie on the beach, more visitors want to do something — hike, kayak, surf — to make their trip more meaningful and, often times, more spiritual. They're traveling more with extended families and booking more spa visits, for example.
"It really became much more important for people to bond and connect (with each other), to enjoy life," Vieira said. "Getting massages, hiking in green forests — all these things became precious to us. And it fit in perfectly with what Hawai'i has to offer."
When Starwood's Princeville Resort opened on Kaua'i in 1986, for example, only 3 percent of visitors went on a hike, Vieira said. Now, 48 percent of visitors to the hotel go on hikes around the island.
"While I'll never say 9/11 helped us, it did make people aware of how precious our time is here on earth," he said. "What's become important is the spiritualness of a destination. And Hawai'i has that."
Bob Twogood, owner of Twogood Kayaks Hawai'i in Kailua, recalled the three weeks after the attacks, when the number of tourists renting his kayaks and booking guided tours dropped off dramatically.
"We slowed down to nearly nothing," said Twogood, who has been in business for 23 years.
But after six weeks, business picked up again, thanks to a savvy marketing plan that targeted residents who were looking to vacation at home. He bought ads in magazines distributed in Waikiki and sharpened his focus on the kama'aina market.
"Local residents were staying at home, and that helped us immensely," Twogood said.
He learned that spending money on advertising during down times, even at a high cost, can pay off in the long run.
"It's critical when your income stream is slowing," he said. "You need to maximize that as much as you can ... If it worked during slow times, there's no reason that wouldn't be effective in good times, as well."
Companies that have weathered severe storms such as Hurricane 'Iniki, for example, found getting through the downturn caused by the Sept. 11 attacks — even the SARS outbreak — incomparable.
"Natural disasters are, unfortunately, an accepted part of life," said Vieira, whose Princeville Resort underwent a major renovation just before Hurricane 'Iniki ravaged the property in 1992. "People learn to prepare for them and deal with them, but it doesn't change their view of life ... But when you have a terrorist attack or war, that changes your attitude about everything, the economy, your safety. It's more significant ... "
The Japanese market is beginning to rebound, say industry experts, after its own economic downturn, SARS and bird flu scares and concern about terrorist attacks worldwide.
DFS, which relies on the Japanese market, hasn't fully recovered from Sept. 11, Weiner said. But business has started to show signs of improvement since last September.
First-quarter sales this year were weaker than expected for DFS, despite strong numbers of arrivals from Japan.
"In July, arrival numbers were very strong from Japan, but the spending wasn't as strong as we had hoped," she said, noting the large number of school groups to Hawai'i this summer. "It's not really a numbers game, it's not a body count. It's much more about the quality of who's coming in terms of their propensity to spend."
While the tourism industry has learned from the experiences after the attacks of Sept. 11 and most companies have in place a plan to deal with similar circumstances, no one wants to see the event repeated.
"It shattered people's confidence and stability, no question about that," Carey said. "It will take years and years before the memory is gone. We're all hoping lightning doesn't strike again. I saw what it was like and I didn't like it ... This year we've been celebrating every day because it's been a wonderful year, financially and emotionally for our employees. Prosperity is possible, but it's fragile. And 9/11 reminds us just how fragile it is."
Reach Catherine E. Toth at 535-8103 or ctoth@honoluluadvertiser.com.
