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The Honolulu Advertiser
Updated at 3:11 p.m., Sunday, August 3, 2008

Maui tourism lashed by rough waters

By ILIMA LOOMIS
The Maui News

MAKENA, Maui — Just about any way you count it, tourism is down — and it's not likely to get better anytime soon.

The Maui News presented the first of a two-part series on tourism today.

Visitor industry leaders meeting Thursday faced bleak numbers: Maui's June visitor arrivals of 184,877 representing a 22 percent drop from a year ago; total visitor days of 1.4 million, down 14.9 percent; and visitor spending of $266.6 million, down 15.6 percent.

The causes are simply beyond local control, they said - global fuel prices are pinching airlines, while the national credit crisis has consumers reluctant to plan any spending, The Maui News said.

"We're in for some tough, trying times," Maui Visitors Bureau Executive Director Terryl Vencl warned Thursday at MVB's marketing meeting at the Maui Prince Hotel.

The six-month visitor arrival numbers, released earlier in the week by the state Department of Business, Economic Development and Tourism, show that Maui's declines are steeper than the state as a whole. Statewide, visitor arrivals in June were down 14.2 percent from a year ago.

Moloka'i and Lana'i are also feeling the slowdown. Total arrivals on Moloka'i (5,499) were down 15.7 percent in June from a year ago, and Lana'i arrivals (6,633) dropped 30.9 percent, the most in the state. (Because Moloka'i and Lana'i figures are low, percentage figures reflect the small sample size.)

While tourism statistics are already gloomy, the worst is yet to come, Vencl warned.

"Summer is down, and fall may be our deepest cuts," she said.

Kaanapali Beach Hotel General Manager Mike White said the numbers were sobering, but came as no surprise.

"We all recognize these are challenging times," he said.

Beyond focusing on the quality of their product, there's not much hotels and activity providers can do about the situation, he said.

"The forces at play here are almost totally out of our control," he said.

The soaring price of oil is the most obvious contributor to the downturn, Vencl said. It played a role in the failures of Aloha and ATA, and is causing surviving airlines to reduce the number of flights to Hawai'i, increase ticket prices and add baggage fees and surcharges.

The nationwide banking and mortgage crisis is just as big a factor, she added, causing mainlanders to decide to stay home rather than take expensive Hawaiian vacations.

"Consumers are tightening their belts," she said.

A 13.3 percent drop in total airline seats into Hawai'i is a big part of the decline in visitors, said John Monahan, Hawai'i Visitors and Convention Bureau president and chief executive officer.

Between the loss of interisland seats and the cutbacks of Mainland flights, "the transpacific loss is much more significant," he said.

That's because the interisland carriers had been flying with a fair number of empty seats prior to the cutbacks, and Hawaiian Airlines has added flights to its lineup in order to meet increased demand in the wake of Aloha's closure, he said.

Total seat capacity for the state is back to 2004-05 levels, after "all-time highs" in 2006 and 2007, he said.

To the extent the industry moves in cycles, he said, "You could say there was a little bit of a natural contraction."

But economic factors have also been crucial, with Monahan noting that high airfares are running headlong into increasingly cautious consumers.

"A Hawai'i vacation has never been inexpensive, and in these tough economic times, it presents a real challenge," he said.

Looking at arrivals for the first half of the year, the numbers are less severe. The 1.1 million visitor arrivals to Maui were down 8.8 percent for the first six months of 2008 compared to the same period in 2007; Lanai was down 5.6 percent, while Molokai saw a 5.5 percent increase. But the period included three months of relative stability prior to the grounding of Aloha Airlines and ATA in early April.

Visitors to Maui spent an average of $186 per person per day in June, down less than 1 percent from a year ago. The average length of stay on Maui was 7.74 days, up 9 percent. Lower total expenditures and total visitor days were driven by the drop in arrivals.

While they may not be able to do anything about the larger economic trends, Vencl urged hoteliers, activity providers and others serving the visitor industry to "get back to basics" and shine up their infrastructure, staff training and sense of aloha.

"The visitor experience is going to be paramount," she said. "The new norm will be higher prices with higher expectations."

Mayor Charmaine Tavares agreed, saying she has been concerned that negativism and a "go home" attitude expressed by some residents are a turnoff to visitors. Everyone in the county shares responsibility for creating a welcoming environment and keeping the economic engine well oiled, she said.

All businesses, not just hotels and activity providers, will feel the slowdown, she added.

"It's rippling through our whole economy," she said.

For more Maui news, visit www.mauinews.com.