While Hawaii has continued to outperform all expectations with the return of travelers following Covid, recent data from the State showed that overall visitors continued to increase in a trend that has continued for 24 straight months, a significant downward trend in a key Hawaii market ominously entered the picture.
Trouble brewing for Hawai travel – West Coast market dips unexpectedly.
This is the most important domestic market for Hawaii travel. The news from the US West is different now. Arrivals from the western US, while still up 20% from April 2019, have dropped 10% compared with last year. But a trend we talked about this week is clear. While visitors are still very keen on travel, they look further afield for vacations.
We suggest it is heading in two directions, both closer to home, including drive-to and fly-in vacations, and towards more international travel, as we’ve recently discussed. By comparison, the relatively small eastern US market was only down just over 1% compared with last year.
Hawaii relies exclusively on mainland visitors without substantive return of international travel.
The lack of clear indication of when international travel volume will return to normal, plus the sudden unexpected decline in visitors from the western US, are objective indications that Hawaii travel will face headwinds ahead. That concern is confirmed by UHERO, the State’s economic research group. However, they are more optimistic than we are about a near-term international recovery and said, “Further international market recovery will sustain visitor numbers.” That while acknowledging that the return of Japanese visitors isn’t as straightforward, with less than 30% of average arrivals in April and spending down some 65%. We see it taking another one to two years to recover the Hawaii international visitor market fully. Canada doesn’t fare much better, with a 31% visitor decline since pre-Covid.
A drop in tourism better aligns with Hawaii’s lack of infrastructure.
Visitors outnumber locals seven to one. That puts a strain on every one since Hawaii has not invested heavily in its infrastructure to support the higher demand for tourism. You may have felt it too when visiting Hawaii after Covid. Transportation options are limited, so our roads and highways that have more vehicle traffic, including rental cars, than they can handle. When trying to get into restaurants, there’s not always adequate staffing to accommodate everyone. Park and beach restrooms need to be renovated, and famous beaches are overcrowded. The natural resources of Hawaii need to be preserved for future generations, which is one reason why traffic between Hanalei and Kee Beach is limited to a specific number of visitors and cars daily. Then there are the airports that should be updated to handle increased traffic, but never are. The list is long, and there doesn’t seem to be a plan to address these issues.
If you visited Hawaii after Covid, did you see a lack of infrastructure to meet the higher demand for tourism?
As noted in our articles and your comments, Hawaii travel costs are simply through the roof.
As a result, how much visitors spend continues to climb out of necessity. In April, overall visitor spending was up 8% compared with last year’s period and up 31% compared with 2019. That even as visitors try to put the brakes on Hawaii vacation costs. But west coast visitors changed it up and spent 7.1% less in April than last year simply by pulling back.
We don’t think those state-provided numbers even tell the whole picture. Case in point: One of BOH’s editors needs to go to a business meeting in Kapolei on Oahu. There are three hotels to choose from, with the least expensive being Hampton Inn. The lowest rate for the Hampton Inn, including all taxes and fees, was over $500 a night! That’s insulting.Apr 2023 - HL