Fewer tourists visited the Islands in August, the second consecutive month of declines in visitor arrivals.

Those visitors, however, spent more during their trips here, according to a report released yesterday by the state Department of Business, Economic Development and Tourism.

Hawai'i hosted 688,817 visitors last month, down 1.2 percent compared with August last year. But visitor spending rose 3.5 percent to nearly $1.1 billion.

The state figures come a day after Hospitality Advisors LLC reported that average hotel room rates last month reached an all-time high despite a drop in occupancy.

Mainland arrivals increased 0.7 percent to set a monthly record of 512,631 visitors. But that was offset by a 6.2 percent drop in the number of international visitors. Japanese visitor arrivals, which have fallen all year, were down 5.7 percent.

"The domestic market continues to be the foundation for the visitor industry's success," said state tourism liaison Marsha Wienert. "We are very pleased with the continued growth in visitor spending and tourism's impact on the state's economy."

The industry still appears to be strong and steady, although the record-breaking growth Hawai'i has experienced over the last two years seems to be leveling off. Some in the industry are seeing a softer fall "shoulder" season — traditionally a slow period for Hawai'i tourism — compared with last year.

"This is the first time this year we're seeing a real soft period come into play," said Duke Ah Moo, staff vice president of Hawai'i operations for Pleasant Holidays, the largest U.S. tour operator to Hawai'i. "There haven't been really any shoulder seasons this year until now."

In response, "we're putting out a lot of free added-value offers, like free rental car, free upgrades, free breakfast, free parking at the hotels," he said.

"The booking pace is slowing in the fourth quarter leading into 2007," said David Uchiyama, spokesman for Starwood Hotels & Resorts in Hawai'i. "If you took this fall and compared it to a slump fall, I think you're going to see it's comparable. If you're comparing this fall to an upswing year, then it is going to be soft."

For August, visitor days fell 2.9 percent and the average length of stay declined 1.7 percent. Still, people spent 6.5 percent more per day, and 4.7 percent more per trip.

The number of visitors here for conventions was half as much as August last year. The honeymoon and wedding market also declined year-over-year.

O'ahu saw a 4.8 percent decline in tourists, while Maui visitor arrivals were relatively flat at -0.4 percent year-over-year. Visitor arrivals grew on the other islands, including Kaua'i (5.9 percent) and the Big Island (6.3 percent).

Out of the visitors last month, 27,436 flew here to board cruise ships in Hawai'i, up 15.6 percent from August last year.

So far this year through August visitor arrivals are relatively flat — up just 0.1 percent — compared to the same period last year. Total expenditures year-to-date are up 4.5 percent.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.