The number of Japanese visitors arriving in Hawai'i plunged over the last two weeks amid swine-flu fears — even though Hawai'i cases have remained few and mild — and cancellations over the next few months are likely to cost the state millions more in lost revenue.

That's the assessment from several businesses that specialize in Japanese visitors. State tourism liaison Marsha Wienert said, "It is very concerning" to see a double-digit decline in arrivals that began on May 10 with a whopping 25 percent drop in daily arrivals.

"And that sharp decline is continuing today," Wienert added.

Hawai'i reported its first swine flu case on May 5, and since then the number of cases has grown to 26.

The plunge in arrivals from Japan followed a fairly rosy Golden Week, with the numbers of Japanese visitors on the upswing as tourists enjoyed the string of holidays that fuels a busy travel season for Japan.

The troubled world economy has pushed Hawai'i's No. 1 industry into a slump, with months of double-digit declines in arrivals and drops in revenues as hotels and others in the industry discount rates to compete with other destinations. Japanese visitors had lessened in numbers in recent years but remain a valued and important part of the visitor mix, as a loyal and traditionally high-spending visitor.

"The first part of May was fabulous with increases of up to 15 percent," Wienert said.

"The situation is very, very critical and very, very serious," said Akio Hoshino, senior vice president of Jalpak International Hawaii Inc., which sells travel packages. He offered a conservative estimate of 2,000 would-be visitors opting not to fly to Hawai'i for his business alone, at a revenue loss of about $4 million.

And Hawai'i hotels feel the pain of Japan-to-Hawai'i cancellations as well. "It's tanking as we speak," said Keith Vieira, senior vice president, Operations-Hawaii & French Polynesia of Starwood Hotels & Resorts.

Vieira estimates that the cancellations of bookings from Japan over the next four months already amount to about $5.5 million worth of business for the four hotels his company runs in Waikiki — The Royal Hawaiian; Moana Surfrider, a Westin Resort; the Sheraton Waikiki; and the Princess Kaiulani.

TAKING PRECAUTIONS

Part of what's fueling the drop is that some private businesses in Japan are telling employees who travel overseas that they must stay home an additional five to 10 days before returning to work to prevent the risk of spreading the flu.

Jalpak's Hoshino said health-conscious Japanese carefully monitor the news, and many have donned masks to reduce their risk.

"I think Japanese people are very, very sensitive because Japan is isolated, an island, like Hawai'i," he said.

He is especially worried that the travel pattern will follow that of the SARS scare, when overseas travel plunged by more than 50 percent.

In his worst-case scenario, a majority of Japanese would-be travelers might not go anywhere. "The Japanese people might think it's better to stay at home," Hoshino said.

Wienert said the year-to-date numbers for arrivals from Japan — one of Hawai'i key sources of visitors — is still respectable considering the global economic downturn. "We're only down 9.9 percent in arrivals."

Wienert said the Japanese are following health precautions set up after SARS even though this flu has not had as devastating an effect. "There's no question it's contagious, but it hasn't had the same deadly effects as SARS," she said.

WEIGHING RISKS

Now that Japan has had more than 160 cases of swine flu, the travel climate may shift in the coming weeks as travelers weigh how much more of a risk they face from leaving home than staying home.

"When Japan didn't have infection, people just thought to cancel," Hoshino said. Now that Japan has swine flu cases, "it's very hard to guess what will happen."

Wienert said Hawai'i and other destinations will be wrestling with marketing to wary and worried travelers. "What do you do to be able to convince them that it's OK to travel?" she asked.

Starwood's Vieira said it's "devastating" to have the Japan market plummet after it had steadied. The initial swine-flu fallout had swung the other way. "We did pick up some cancellations from Mexico," which had the first widespread outbreak and more casualties.

Hoshino said Hawai'i can help by spreading the word that the state "is a completely safe destination, with only mild cases of swine flu."

Leon Yoshida is president of Sawayaka Hawaii Inc., a travel company that brings about 30,000 Japanese visitors to Hawai'i each year. He also serves on the board of the Hawai'i Tourism Authority.

Yoshida worries about the breadth of the sudden plunge in the Japanese market, crossing group and individual travelers.

"Summer cancellations are happening; it's also the new bookings that are not happening," he said.

He said the Japan visitors are canceling trips to every popular destination — including South Korea, China, Vietnam, Guam and Saipan.

"We sell every destination," Yoshida said. "It's scaring a lot of people away from travel."