Hawaii travel for 2023 is off and running and likely to be stronger than expected. It comes following the latest data indicating visitor spending just eclipsed record-breaking 2019 results.
With data in for January through November 2022, visitors spent $17.4 billion here, which was +9% compared with 2019. That came even though the actual number of tourists was -11% at 9.4 million.
West coast visitors are spending 46% more.
Hawaii’s meat and potatoes visitors arrived in mass last month too, with 416k November visitors, up 11% compared with 2019. More significantly, they spent $564 million, up 46% in the nine average days visitors spend in Hawaii!
A significant slowdown in tourism is unlikely.
Over the past six months, some have worried about the visitor statistics in relation to a cooling economic environment and the lack of diversification in Hawaii. So the whipsaw question of too many or too few visitors continues. Our sense, however, is that significant slowing isn’t indicated.
As you recall, we said the Christmas and New Year holidays would be the next benchmark for 2023 Hawaii travel. Those numbers will take a few more weeks to come in, but we expect them to be very strong based on November data and what we see here on the ground. There had been concern voiced about the lack of typical far-in-advance holiday bookings.
While the neighbor islands primarily rely on strong domestic tourism, Honolulu especially continues to suffer from the long-awaited slow return of international arrivals. Japanese visitors are still down 90% from the average. The international problem won’t be helped by the upcoming plan to Covid test all Chinese visitors (and those traveling from China) before arrival. Lastly, another issue in Hawaii is the lack of group business and conference demand.
Hawaii remains all-in on travel.
Obviously, Hawaii didn’t take advantage of Covid-time to become more economically diversified. That is a frustration for many here in Hawaii. The state’s UHERO said the lack of diversity “Exposes Hawaii’s economy to external shocks that trigger collapses in tourist numbers.” Furthermore, Hawaii’s economic growth has diminished for decades as the dominance of tourism has not generated productivity growth.
Here are the issues that Hawaii visitors in 2023 will face.
- High Hawaii prices, taxes, and fees. Room rates and rental cars are up by 50% since before Covid, which isn’t entirely different than other US tourist destinations. We mentioned recently we are paying more for vehicles at LAX than in Hawaii. High accommodation rates are in addition to 18% room tax, plus fees of various types.
- US inflation plus looming recession. It isn’t clear how much of a recession there may be or how long it could last. It all depends on who you ask. Inflation seems to be stabilizing, but it is still a significant factor when it comes to vacation spending.
- High airfares. With the exception of those west coast markets still feeling the Southwest Effect, prices have increased significantly since before Covid.
- Service and staffing issues. Industry-wide, it is challenging to hire and retain travel industry employees, from ramp agents to housekeepers, waitpersons to front desk staff, and all the rest.
Are you coming to Hawaii in 2023?
We’d love to hear your plans.