US visitor arrivals this summer and spending are impossible to predict for the reasons we will tell you today. And that is crushing tourism plans with much uncertainty about how the summer in Hawaii will pan out. This could lead to opportunities for some incredible deals across the board. As editor Jeff said last month, “We see significant softening in demand ahead this summer, which could bring hotel and rental car prices back down while airfares waver or continues to rise.”
The lack of forward bookings raises alarm across all sectors.
The softness in Hawaii travel bookings, aka better deals ahead, started to rear its head as far back as December 2022 when there was an unexpected lack of visitor performance during a time of year that should have been outperforming.
Hawaii visitors slam brakes on forward bookings. Does that mean that they won’t be coming?
Actually, no one knows what this trend means for now, but the peak of summer travel is just three weeks away, which should be a high-demand, high-spending period second only to the holidays. These trips would typically have been booked up to a year in advance. But not this year.
The lack of predictability in visitor behavior is seen across all sectors, from airlines to accommodations and car rentals.
Summer in Hawaii: boom or bust?
There are still hopes that Hawaii travel will recover with extensive last-minute bookings. We recently said, “Word on the street in Hawaii is that advance bookings for traditionally stellar July are currently off by up to one-third.” And that continues to be the case.
We are also receiving offers for discounted booking of Hawaii hotels and vacation rentals for summer, which properties didn’t anticipate needing to do.
Hawaii visitors head to Europe instead!
Two Beat of Hawaii editors were in Europe earlier this month. They report that the crowding there is unprecedented. And when returning there later this summer, they find virtually sold-out conditions at many places on the continent. While in London, the number of American tourists was simply nuts! Italy’s biggest bank said last week, “Today in Italy, we have this boom in terms of tourism that is unbelievable.” Earlier this year Italy reported that foreign tourism was running more than 70% higher than in 2022. The same trend is true in Spain, Portugal and other European countries.
Hawaii was more easily accessible after Covid than other places in the world. Now that’s shifted.
And we’ll add this. The cost of travel to Europe is no more, and in many cases is less, than travel to Hawaii. While airlines, car Hawaii car rentals, Hawaii vacation rentals, and Hawaii hotels all had the notion that no amount was too high, we’d suggest they judged that incorrectly.
With the cost of a Hawaii vacation for the first time eclipsing that of a European vacation, Hawaii may find a shift in pricing is in order. We’ll see how that pans out.
The state confirms what we said previously about changes in visitor behavior.
DBEDT (Department of Business, Economic Development, and Tourism) confirmed last week what we suggested last month. That is, that a reversal in travel booking order has hurt Hawaii’s numbers. BOH said:
“In the past, visitors booked their Hawaii airfare first. But that’s no longer the case. Instead, Hawaii-bound travelers are getting their first dose of sticker shock when looking at Hawaii accommodations and Hawaii car rentals. Perhaps at that point, the world atlas emerges, and other options become more attractive. Airlines don’t even have a chance to sell their overpriced wares. And as we said the other day, the airfares are, for the most part, also ridiculously overpriced to Hawaii. Your editors are finding the cost of airfare to get out of Hawaii this summer so expensive that we are just saying what our commenters have called a hard no. For those seeking tropical destinations like Hawaii, there are many other options globally, including arguably less costly, nearby Mexico and the Caribbean.”
HVCB confirmed last week that “A recent trend toward travelers booking rental cars and hotel rooms before airlines also has made it harder for airlines to forecast traveler demand.” While state tourism (DEBDT) said that looking forward, there is a “softening in the U.S. West and U.S. East.”
In addition, the unending and still in part disputed Hawaii marketing mess has also hamstrung Hawaii’s ability to compete globally for visitors. As a result of that and other factors, in the latest monthly report on hotel occupancy, only 74% of available rooms were occupied in April. According to the latest findings, that comes even though visitor satisfaction measured by the state is running at nearly 90% for U.S. visitors.
And lastly, international travel to Hawaii hasn’t recovered significantly; when that will occur is anyone’s guess.
Hawaii tries to answer these questions:
1. How much more revenge travel to is left in people?
BOH: Based on what we are witnessing globally, we’d say a lot. But how much is left specifically for Hawaii travel? We’d say far, far less.
2. Will Hawaii need to rethink visitor costs, taxes, and fees to remain attractive?
BOH: Definitely. The perception that Hawaii is now only for the elite high-spender needs to shift. That’s true since hotel rates, airfares, and car rentals are up 50% or, in many cases, much more in the past couple of years, plus the 18% accommodation taxes and countless fees that sting visitors sorely.
3. To what degree are U.S. economic concerns weighing on Hawaii travel?
BOH: Based on what we just saw in Europe, we have to say that isn’t a primary issue.
What is your best strategy for planning Hawaii travel?
Wait it out. Here’s why:
BOH: The current environment speaks to the benefits of last-minute bookings as yielding the best results. You can be sure that this isn’t what airlines, hotels, and car rentals want us to say. But that is clearly the situation at hand. Case in point. One of us wanted to go between Phoenix and Kauai in August. The cost before was running about $1,000 round trip for nonstop. But as of today, it is just $300. On the other hand, this approach can also backfire if you wait too long. Those with more flexible travel plans will benefit most.
We welcome your comments!