Hawaii Tourism Swings Wildly Again As Visitor Spend Up 67%

Hawaii Travel Industry A Shambles and Why

First, we want to allay your fears. It isn’t Hawaii that’s in a shambles. Hawaii is great, always has been and always will be. Things here are going moderately well under the most unusual global and local travel circumstances any of us has ever experienced. But the industry is clearly in a far greater state of upheaval than we would like to believe.

Our word pick for this is “Shambles: a state of confusion, bad organization, or messiness.” Here’s why it fits the situation.

Travel has often been described as the largest industry in the world. It results in more than 10% of global revenue generation. In Hawaii, it’s proportionately much larger and either directly or indirectly impacts virtually all of us here. Travel may have accounted for 1 out of 4 new jobs created pre-Covid globally, and in Hawaii, even more.

Hawaii travel demand still isn’t fully returned to normal as we await the full resumption of international travel. But even before returning completely to prior demand levels, it’s clearly become a nightmare for both those in the industry and for Hawaii visitors.

Experts say we aren’t even close to being through all of this upheaval. Recent examples here in Hawaii exemplify that. We’ve seen estimates that this could go on for another solid year or even longer.

Industry-wide staff shortages are persistent. Whether it is hotels, restaurants, activities, or car rentals. For whatever reasons, employees didn’t return to travel industry jobs and there just aren’t enough of them. Those who have returned are often faced with significant overtime to try to make up for the inadequacies. And that isn’t working well for morale in the travel business, among other problems.

Case in point. As commenter, Georgia said, they were marooned on the tarmac at Honolulu for over 90 minutes because there was no staff to provide a jet bridge.

“Our 531 flight on Alaska Air from LAX to HNL was on time but we sat on the tarmac at HNL for at least 1.5 hours waiting for the gate/jetway to become available so we could disembark. They told us it was a lack of staffing.” Not a great welcome to Hawaii.

How and when is this ever going to get fixed? There’s hope that by next year, better systems and more people will be in place to help in Hawaii travel. Even then, do we really believe we can return to how smoothly things worked before Covid? That ship has probably sailed, and we can at best strive for a new experience that’s better than what we have today.

What hasn’t changed is people’s desire to travel. But how we travel is in a state of flux. It’s a time to dig deep for increased patience, and readjusted expectations. We hope that Hawaii travel will ultimately improve to become a higher-quality experience. But in the short-term, that simply won’t happen.

1. Big trouble at the airlines flying to Hawaii.

Why is it so difficult to get the airlines back on track? Is there anything that can be done? Flight cancelations, delays, labor disputes and staffing shortages seem to dominate airline news. UAL said this, “Most airlines are simply not going to be able to realize their capacity plans.” At Southwest, the airline cut nearly 20,000 flights from their summer schedule, including Hawaii flights, with that reality in mind.

Airfares have risen more than at any point in the past 60 years. If it isn’t about the airlines and the pilots, then the subject turns to airfares. Nationally, those just saw their largest increase in decades. According to financial analysts at Cowen, airfares jumped 50% in the last week of May, compared with the prior year. Except for the occasional sale on highly competitive routes, we see it on Hawaii flights.

Airlines and pilots’ union disagree. While the airlines say they don’t have enough pilots, the largest pilots’ union says there isn’t a shortage of pilots. Huh? ALPA said that airline mismanagement, schedule reductions and “profit-based business decisions” are the cause of the pilot issues.

Alaska Airlines. Last month, Alaska pilots voted to strike, and that’s pending preliminary steps. Alaska has had a spate of cancelations related to pilot shortages. They’re in a bitter dispute with pilots over their new contract, and as a result dozens of Alaska pilots are said to have moved on to other airlines.

Hawaiian Airlines. There have been several issues at the Hawaii bellwether carrier. This week the airline had an unusually high number of flight delays, as we reported. Previously, Hawaiian canceled dozens of flights related to pilot shortages and an interisland flight training simulator. The company is trying to add cockpit crew and has offered a $10k sign-up bonus and $81/hour starting pay to first officers.

Southwest Airlines: get ready for June 21.The airline has both a pilot shortage and a labor dispute. Next week, 1,000 or more pilots plan to demonstrate against SW at Dallas’ Love Field.

United Airlines. That company says, “the pilot shortage for the industry is real, and most airlines are simply not going to be able to realize their capacity plans because there simply aren’t enough pilots, at least not for the next five-plus years.” Five+ years, really?

Hawaii flights are getting delayed frequently of late, and the future may bring more cancelations, too. With no official word, the cause is likely inadequate staffing amid a very tight labor market.

Today the airline CEOs are meeting with U.S. Transportation Secretary Pete Buttigieg regarding all of the delays and cancelations.

It’s not just the airlines. It’s the airports too. Two U.S. senators recently raised concerns about what’s happening at airports, and with flight delays and cancelations. They’re looking back at Memorial Day holiday weekend and trying to prevent a similar situation on July 4. We just saw today that at one airport, Europe’s Schipol, they will be limiting the number of flights and passengers processed this summer due to helps keep things working while having inadequate staffing.

We reported that on Sunday and Monday, there were 272 Hawaii flights delayed. And it isn’t over. At Honolulu on Wednesday, there were another 53 domestic flights delayed (25 Hawaiian, 17 Southwest, 9 United, and 2 Delta. Plus, 3 United flights were canceled entirely.

How airlines operate. These companies rely on a highly complex combination of people and technology, and it all needs to fit together precisely for operations to run correctly. Staffing shortages in any one area impact the entire operation. When anything goes wrong, we see massive delays and then flights are canceled.

When will this end? We’d all like to believe that this will improve soon, but everything we hear is that isn’t going to be the case. It’ll take time to find, hire, and train people, if that’s even possible. One example of technology helping to a greater or lesser degree, is the automation being installed at Hawaii airports. We reported on Lihue Airport improvements, which should reduce TSA staffing burdens through greater automation with improved results.

2. Hawaii hotels and Hawaii vacation rentals are priced out of this world!

We recently reported that Hawaii hotels jumped to having the highest rates we’ve ever seen here. They also have the dubious honor of being the most expensive in the U.S. Guest satisfaction is falling across the industry, too. Hawaii hotels first had to reduce their staffing during the pandemic. Then, when Hawaii travel resumed faster than expected, they were caught off-guard. Many of the staff didn’t return while new staff had to be added and trained. So the guest experience can be less than expected, including in hotel restaurants and housekeeping.

One commenter said, “How can you afford to stay in a hotel in Hawaii? The usual $350-375 partial ocean view at the Big Island’s Waikoloa Beach Marriott is over $1,000 per night!”

Another added, “If you can overlook the issues and just enjoy the sand, sun and sea, it’s still our favorite spot. Our favorite condo increased over last year about 30%, next year it increases another 65%!! We may be looking elsewhere if this continues.”

Hawaii hotels and vacation rentals are revamping technology, too, and online reservations are working better than ever, eliminating some of the prior need for human interaction. Over time, the result will be a leaner operation where customers can hopefully also achieve greater satisfaction. But as this comes to fruition, patience is a virtue.

3. Hawaii car rentals. What more is there to say?

With some of the highest prices in the country, and availability that’s recovering far too slowly, this has been an albatross for Hawaii visitors. Across the car rental industry, satisfaction is down, which comes as no surprise. Even when looking at prices even in the off-season, the new low price seems to be close to $100/day.

4. Marketing runs amok: Hawaii Tourism Authority, HVCB and The Council for Native Hawaiian Advancement.

We reported earlier this month on Hawaii’s marketing quagmire as the state’s Hawaii Tourism Authority (HTA) abruptly canceled its 20-year marketing contract with the century-old Hawaii Visitor And Convention Bureau (HVCB). The contract was awarded instead to a member-based non-profit with no apparent travel marketing experience, whose mission is “to enhance the cultural, economic, political, and community development of Native Hawaiians.”

Since that change was announced, there have been odd and uncomfortable back and forth statements and emails from both HTA and HVCB. Suffice to say, no one is happy here, and we’ll be surprised if this can end amicably. We’re watching for HVCB to challenge the new contract in the next few days.

But, looking at it in another way, there’s been an enormous amount of trouble and controversy at both HTA and HVCB for years. So any shakeup may be a step in the right direction. This change coincides with Hawaii implementing controversial visitor destination management and marketing plans for each island.

We very much welcome your input on this developing story.

 

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74 thoughts on “Hawaii Travel Industry A Shambles and Why”

  1. If I were not already living here I certainly would not visit with the hotel prices that have been quoted to my friends. Hawaii also will never solve its homeless
    problem and lack of affordable housing. It has become a destination address for upper middle class and ultra rich retires which will make it impossible for housing prices to ever come down.

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  2. We just spent a week along with extended family, a total of 28 bodies, to celebrate the life of your grandfather. Our trips were overall enjoyable, but we’re also a pretty amicable, respectful, and jovial family.

    There were a few issues with other tourists and a lack of patience, but they were largely minor. And, truly none with employees or “staffing issues” at our place in Waikoloa or around the big island. While prices have increased, as they have everywhere across the world. What we paid still felt reasonable. Overall it was a great trip and all of our family was happy to visit. This was mine and my wife’s first trip back since our Kauai’i honeymoon. 17 years and it’s still an amazing experience in my opinion. Mahalo, Hawaii!

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  3. I had the cheapest and best time with my kids in Waikiki. Southwest fares were Super cheap. Hotel rates were less than $250 a day for brach front hotel. And we got a Jeep from a normal rental company for a great price too. Had so much fun, think we spent more on food per day then everything else..

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  4. We spent 5 weeks on Oahu North Shore and loved it so much that when we got home we tried to book the Airbnb for next February to March for 5 weeks. Come to find out the law is changing in November that the minimum stay will be 3 months in Airbnb and any other monthly rental. We feel that this is being done because the resort stay is going down and they are losing a lot of resort fees because people are renting Airbnb because it comes out cheaper. So they lost our business.

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    1. Those may be your feelings, however, it could also be because STVRs have a heavy impact on housing for locals.

      Additionally, living near an STVR is often a royal pain.

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