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The Honolulu Advertiser
Posted on: Wednesday, March 22, 2006

Fewer Japanese coming to Isles

By Lynda Arakawa
Advertiser Staff Writer

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Japanese visitor arrivals to Hawai'i are off to a slow start this year, and the state's top marketer to Japan doesn't expect a quick turnaround.

"To be honest, it (Japanese arrivals) will be flat" in 2006, said Takashi Ichikura, executive director of Hawai'i Tourism Japan, which has an $8 million annual state contract to market Hawai'i in Japan.

State economists had projected Japanese arrivals to grow 2.9 percent this year to about 1.56 million visitors. The Hawai'i Tourism Authority also set that figure as a target for 2006.

"Unfortunately it will be a very challenging target," Ichikura said yesterday, after a presentation to tourism officials.

Japanese tourists are valuable to the visitor industry because about one in five visitors comes from Japan. Japanese also tend to spend more money daily than other visitors, and are a critical source of income for many businesses here.

Ichikura pointed to several of issues challenging the Japan market:

  • Limited number of hotel rooms and higher room rates. Japanese tend to book rooms later than Mainland tourists. Hotel inventory has been reduced because of renovations. When renovated hotel rooms come back on the market, they cost more.

  • Reduced airline seats since Japan Airlines suspended two of its eight daily flights to Hawai'i last October.

  • A weaker yen. The yen hovered at around 115 to the dollar in January, compared to less than 105 last year. A weaker yen makes travel to the U.S. and goods priced in dollars more expensive for Japanese buyers.

  • The increasing number of younger Japanese who don't hold steady jobs has contributed to a decline in disposable income. The Japan Times reported nearly two years ago of the "upsurge in so-called NEET youths young individuals who are not engaged in education, employment or training."

    Regardless of the reason, the trend is disturbing for Hawai'i businesses that depend on Japanese customers.

    Japanese arrivals to Hawai'i fell 7.3 percent in January and slid about 10 percent in February, Ichikura said. Arrivals from Japan are down more than 4 percent so far this month.

    It may not be a case of Hawai'i losing its appeal. Japanese international travel overall fell 7.6 percent in January, which has experts puzzled because the Japanese economy has been gaining strength.

    "All the customers are saying it's hard to get a hotel because there are not enough hotel rooms over here and not enough (flights) too," said Shigeko Mitsunaga, the manager of Kyo-ya Restaurant.

    Mitsunaga said business at her restaurant has been "a little bit better than last year."

    Ichikura says Japanese are beginning to realize Hawai'i is a luxury destination, not necessarily suited for budget travel.

    "Japanese visitors (are) beginning to understand the economic situation in Hawai'i and ... accept paying a higher price for Hawai'i," Ichikura said.

    While the number of visitors may be declining, Japanese spending is up. Japanese per day and per trip spending increased in November, December and January, Ichikura said.

    Japanese visitor arrivals peaked in 1997 with 2.2 million tourists. The 9/11 terrorist attacks accelerated the trend, leading to a recent low of 1.34 million Japanese arrivals in 2003.

    The past two years have marked encouraging growth and a turnaround in the market, with 1.52 million Japanese tourists visiting Hawai'i last year.

    Ichikura said the disappointing numbers this quarter could be a temporary setback. Wholesalers are reporting more positive figures for the second quarter.

    He said Northwest Airlines plans to replace two of its planes that fly here from Japan with larger ones this summer.

    In the meantime, Hawai'i Tourism Japan is hoping to attract more visitors and higher-spending tourists by marketing Hawai'i as a "refined destination that is worth traveling to by spending more time and money," Ichikura said. The contractor also is encouraging early bookings and traveling during the slower spring and fall seasons, and is targeting consumers in markets including romance, incentive and seniors.

    Still, the bigger picture of Hawai'i's visitor industry appears to show healthy growth. The decline in Japanese tourists has been offset by higher arrivals from the Mainland and Canada.

    As for Japan, limited hotel rooms and air seats may be making it difficult to travel here, but there is still demand for Hawai'i trips, said Frank Haas, director of tourism marketing for the Hawai'i Tourism Authority.

    "The good news is we've had seven years of decline and now we have two years of growth, and we're seeing continued strong demand, so it's not like the market is falling out of bed," he said. "It's just that there's some structural issues that we're dealing with."

    Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.