A recent article in the Honolulu StarAdvertiser noted mixed results for October but year-to-date numbers are all up. Comparing the first 10 months of 2015 to the same period in 2014, visitor arrivals were up 4.2% to 7.2 million, total visitor days were up 3.7% to 62,470,434 and visitor spending was up 2.2% to $12.5 billion. Scheduled air seats continue to grow and bookings for early 2016 look strong.
The article also notes changes in visitor accommodation preferences but unfortunately compares October 2015 to October 2014 for certain submarkets to generate seemingly large / noteworthy changes in visitor preferences. When one looks at year-to-date data, these changes are much smaller. There is increased demand for condominiums and timeshares, but these changes amount to only about 1% of the market.
I believe these trends in visitor accommodation preferences will continue and are worth studying further. Meanwhile, Hawaii visitor metrics continue to impress.
By Allison Schaefers
Posted November 30, 2015 | STAR-ADVERTISER
Visitor arrivals hit their eighth consecutive monthly record in October, but year-over-year spending fell because visitors generally spent less per day and on each trip.
Total arrivals to the Hawaiian Islands grew 4.8 percent to 692,930 visitors in October, according to preliminary statistics released Monday by the Hawaii Tourism Authority. Since March, total visitor counts have exceeded previous monthly records.
The expansion in arrivals was led by Hawaii’s core U.S. West, which saw a 4.5 percent increase to 272,539 visitors. Hawaii’s second-largest visitor market, the U.S. East, contributed to the monthly success with a 5.3 percent gain to 130,655 arrivals. Arrivals from the category of “all other” markets, which includes Asian nations outside of Japan, Europe, Oceania and Latin America, rose 7.8 percent to 107,121 visitors. That category’s performance was led by Australia and China, the only nations in this market to post increases. These markets offset a 2 percent drop in arrivals from Canada and continued flattening of the Japan visitor market.
A 3.5 percent year-over-year air seat increase contributed to October’s arrivals gains, with 928,866 total air seats to Hawaii last month. Serious growth from Canada and Oceania and some expansion from the U.S. West and East offset a 2.8 percent decline in seats from Japan.
“Despite the gains in visitor arrivals, spending continues to plateau as visitors are adjusting how long they stay and how much they spend while in the Hawaiian Islands,” said George D. Szigeti, HTA president and CEO.
A 5.9 percent decrease in each visitor’s daily spending and a 6.7 percent decline in each traveler’s total trip spending contributed to a 2.2 percent decrease in visitor spending, which fell to $1.2 billion. The U.S. West saw October visitor spending rise 1.1 percent to $406.3 million, and the U.S. East experienced a 1.8 percent increase to $268.1 million, but these lower-spending domestic markets couldn’t offset spending drops from higher-spending international countries. Spending from Japan fell 8.9 percent to $195.2 million, and it declined 21.5 percent to $58 million from Canada.
Barry Wallace, executive vice president of hospitality services for Outrigger Enterprises, said some of the spending variances also can be explained by the type of visitors and their growing use of alternative accommodations — since typically visitors who stay in hotels spend the most.
“Everywhere you look arrivals are up, but the number of visitors choosing to stay in a hotel is getting smaller,” Wallace said. “There’s a significant shift in the choices that travelers are making. Our industry is studying the impact on our business models. It’s been estimated in Hawaii out of all the transient accommodations available that 25 percent fall into short-term online rentals — that’s as big as the traditional hotel industry.”
For instance, the HTA reported that significantly more U.S. West visitors, 13.1 percent, stayed exclusively in timeshare properties compared with October 2014. Among U.S. East visitors, 17.2 percent more stayed with friends and relatives, 13.8 percent more stayed in bed-and-breakfast homes and 29.1 percent more stayed in other nontraditional accommodations than a year ago.
For the Japanese market there was a 7.2 percent loss in leisure visitors, but it was offset by a 27.1 percent rise in visitors who came for meetings, conventions and incentives. Also, hotel stays by Japanese visitors fell 4.9 percent, while 55 percent more Japanese visitors stayed in condominiums and 29.9 percent more stayed in timeshares. Canadian visitors chose timeshares 33.7 percent more, while stays in hotels fell 3.5 percent and condominium usage dropped 11.4 percent.
There were 18,231 visitors who came by cruise ship to Hawaii in October. That figure was nearly 53 percent higher than the prior year.
The mix of visitors and their spending patterns affected each island individually. All four major islands experienced growth in visitor arrivals. However, only Maui, Hawaii island and Kauai saw gains in visitor spending. Visitor spending on Oahu, the state’s most significant island for visitors and the island with the most hotel inventory, dropped 9.3 percent to $554.9 million largely because of decreases from Japan, which is Waikiki’s core visitor market.
“We are very encouraged by the pickup in visitor arrivals across the islands,” said Jerry Gibson, area vice president for Hilton Hawaii. “It’s nice to see the outer islands shine this year as well as Oahu. The holiday season is starting to get busy, and a lot of hotels are booking nicely. Holiday compression on Oahu will give the outer islands a further boost. It’s really, really good for the state to see all the oars in the water and all the islands doing well for our No. 1 industry.”
While visitor spending was a challenge in October, Gibson said he expects to see it pick up for Christmas and the New Year holiday. In the meantime, Gibson said, the state needs to work hard to ensure that its restaurants, parks, activities and attractions are in peak shape so that ancillary spending will move in the right direction.
Through the first 10 months of 2015, HTA reported total arrivals rose 4.2 percent, and visitor spending increased 2.2 percent to $12.5 billion. In the first 10 months of 2015, total air capacity rose 6.2 percent to 9.9 million seats.
“We are still pacing ahead of last year, with spending reaching $12.5 billion and contributing $1.33 billion in state tax revenue,” Szigeti said.
“As we look ahead, we are monitoring issues that could impact our industry, including the U.S. State Department’s worldwide travel alert and global economic conditions. We are also working with our international marketing partners to monitor issues in their respective regions.”
Outrigger’s Wallace said the visitor industry’s performance is expected to remain strong through the end of the year, with Dec. 22 to Jan. 6 particularly busy, and into the next year.
“We’re holding the price as we round into next year. Bookings already are strong for January, February and March, and we’re hopeful that they’ll stay that way,” he said.