The average length of stay for visitors fell 1.3 percent over 2003, but the increase in arrivals lifted total visitor days by 6.8 percent to set a new record of 62.8 million days.

Visitors who came by air spent an all-time high of $10.3 billion, according to the state. Officials had previously reported a spending record of $11.1 billion in 1995, but they have revised that figure after changing calculation methods a few years ago.

"2004 was a great year for Hawai'i's visitor industry with impressive record-breaking results, growth and stability in all key areas," said Marsha Wienert, state tourism liaison. "Contributing to the success was an 8.5 percent increase in total air seat capacity to the Islands."

State and industry officials expect visitor arrivals to reach new heights this year. DBEDT is forecasting 7.14 million visitors for 2005, which would take arrivals beyond pre-Sept. 11 levels.

Economists' predictions for visitor arrival growth this year range between 3 percent and 5.2 percent barring unanticipated events such as international terrorism or airline financial troubles.

Wienert said new DBEDT data shows strong growth in scheduled domestic and international air seats to Hawai'i for February, March and April.

"Our hope is that this increase in capacity will further stimulate and strengthen our visitor industry and help Hawai'i's businesses plan," she said.

The increase in visitors helped pump more dollars into local businesses last year.

Hawaiian Walkways, which runs guided tours on the Big Island, saw more customers last year and the outlook is good for this year as well, said owner Hugh Montgomery.

"We're busier than we've ever been," Montgomery said. He said the increased presence of cruise lines such as NCL America has helped. "We have more employees and more vehicles and some more activity."

But other tourism-dependent businesses, such as Kelii's Kayak Tours on Maui, haven't seen much of a difference over 2003. Mainland visitors make up the bulk of customers for both Hawaiian Walkways and Kelii's Kayak Tours.

"2003 seemed to be a pretty booming year. I think maybe 2004 would be on parallel to that," said manager Anne Taylor. "I don't think we noticed a dramatic increase in business at all."

Taylor said a large factor could be last year's winter rains, which kept many customers away. She said the company also saw a slight decline in corporate group bookings.

"But taking in those factors, it still was a very good year for us," she said.

Hawai'i hotels also benefited from the boost in visitors.

"We had a great 2004 and we expect to have a great 2005," said Stan Engeldorf, general manager of the Waikiki Beach Marriott Resort & Spa. "I would say, yes, that we are recovering and we have recovered."

Every island except for Moloka'i and Lana'i saw more tourists for the year. O'ahu visitor numbers increased 9.4 percent, followed by growth for the Big Island of 5.9 percent, Kaua'i 3.7 percent and Maui 2.2 percent.

More people came to Hawai'i for vacations (up 9.9 percent), honeymoons (12.1 percent), to get married (5.5 percent) and visit friends or relatives (7.3 percent).

The conventions markets fell by 6.2 percent.

Hawai'i's cruise industry numbers also improved last year. About 240,800 people either came to Hawai'i by cruise ship or flew here to board a ship for a 4.5 percent increase over 2003.

Last year ended with 622,433 visitors in December, up 6.4 percent over the same month in 2003. Mainland visitors grew by 10.4 percent while international arrivals fell slightly by 1.4 percent.

Visitor expenditures last month totaled about $1 billion, virtually the same as reported in December 2003.