Uncertainty in 2023 Hawaii Travel Forecast Emerges

Uncertainties in 2023 Hawaii Travel Forecast Emerge

Trying to figure out what will happen in Hawaii travel next year is challenging at best in these uncertain times. We attended some of last week’s Global Travel Marketing conference in Phoenix. And here are takeaways for what’s ahead in Hawaii travel that you’ll want to know, including our cost prediction.

The good news is that the Hawaii travel industry has largely recovered post-Covid, and with the exception of international arrivals, is reaching or even going beyond 2019 volumes at times. That’s what we saw in 2022, and the travel forecast for 2023 may be vastly different, be it Hawaii, domestic travel overall, or international.

Here are the issues that Hawaii visitors in 2023 will face.

  1. People have already overpaid for prior revenge travel. Hawaii visitors threw caution to the wind and spent without remorse this year. Can that continue, or will a new and more frugal phase largely emerge?
  2. Sky-high Hawaii prices, taxes, and fees. Rates for hotel rooms and rental cars have jumped about 50% since 2019. While that’s also true in other parts of the country, Hawaii started with very high rates to begin with. Add to that exorbitant taxes (18% on Hawaii accommodations) and fees of all types.
  3. The prospect of a pending recession. Mortgage giant Fannie Mae (FM) said yesterday, “We still expect a modest recession to begin in the first quarter of 2023 as the full effects of tightening monetary policy and weaker global growth weigh on the economy.”
  4. High inflation rates. While still concerning, FM also said yesterday that “While monthly inflation data can be volatile, as has been the case recently, there are signs in this report that inflationary pressures may be easing broadly.”
  5. Fuel prices negatively impact airfares. CNN just reported, “Airfares are way up. U.S. gas prices are higher than they’ve ever been at this time of year.”
  6. Cost and availability of labor. Yesterday we reported on a pilot shortage hurting Southwest. And they aren’t alone; it is industry-wide. But that’s just the start. You can’t hire housekeepers, waitpersons, or front desk staff, among others, for love or money.
  7. Ukraine war. It is said to be driving commodity prices up, adding to supply chain issues that impact travel, and contributing to economic uncertainty.

Thus we remain uncertain just how 2023 will unfold here in the islands. And that’s after seeing so many Hawaii travel cycles over the 15 years we’ve covered the industry.

2022 vs. 2023 Hawaii travel demand.

There is still more pent-up domestic demand for Hawaii travel in 2023. But the questions are how much and when will visitors act on their remaining Hawaii travel desires. International travel to Hawaii has much more pent-up demand, including those visitors from Japan, Korea, and China.

Prices may have topped out in a Hawaii price-to-value equation out of wack.

The new year could also see some bottom in Hawaii travel. For a variety of reasons, it is widely expected that at least the beginning of 2023 could be slower than previously anticipated. Add to that the fact that China is still not traveling, although that may restart in early 2023. Japan and Korea have just opened to travel over the past two months.

Will prices for Hawaii travel drop? In a word, no, they won’t. What will happen is that they will not continue to increase much, if at all. That’s not only what your editors think but also the feeling of the travel pundits from last week’s conference.

Luxury leisure will continue to lead the Hawaii travel market resurgence. As we have seen, those with the most money, who are the people the state is trying to attract more of, seem to have an endless ability and willingness to vacation here and spend big.

Emerging Hawaii vacation trends.

  • Travel will move to include shorter individual and small family vacations.
  • At the same time, we will see more extended group trip vacations. Those leverage renting large vacation rentals that can accommodate 6, 8, or more people for far less money than traditional hotel costs, while providing the opportunity to cook meals and improve vacation quality.
  • Inadequate service is here to stay.
  • Too high fees may next get absorbedb fully into base rates, but the net costs were pay will remain unchanged.
  • The human desire for Hawaii travel will remain insatiable. That includes both new visitors to Hawaii and those who love to return.
  • Bad airport experiences will hurt Hawaii travel.

 

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34 thoughts on “Uncertainties in 2023 Hawaii Travel Forecast Emerge”

  1. The impression I now have of Hawaii is “greedy”. My son and wife wanted to visit for their honeymoon and my husband and I were hoping to visit a couple islands that we hadn’t been to yet. But neither of us are going. There are so many beautiful places to visit for much lower cost. We just visited Norway, and with airfare and hotel rates the same trip to Hawaii would have cost almost twice as much. Friends and people we talk to no longer have Hawaii on their radar.

  2. Visiting Kona for Thanksgiving. Many places short staffed. While we had no resort fees at Courtyard by Marriott -unless there is a room turnover, bedding changed on Wednesdays. We had to track down cleaning staff for towels every day. Everyone working doing their very best. We wish everyone well. It’s a new world for sure. Island people are the best!

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  3. I’m generally not a fan of timeshares—although I own one of the “oldies”—but in August we bought with Hilton primarily because I see the resort fees heading into the stratosphere. I have a son and granddaughter in Honolulu, so travel there is pretty much a necessity. I take the bus if I need to get somewhere. And I can have unlimited guests at my timeshare pools, activities, etc., which is not allowed with many hotel bookings.

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      1. I think timeshares are more appreciated now that hotel room prices have gone through the roof. Vacation rentals in resort areas (not neighborhoods) are attractive as well.

  4. We were on Kaua’i for the month of October. Cost of car rental was extremely high but we had our chose of cars at both airports on Kaua’i and Oahu. Went through TSA at both airports with no problems. In fact no one was there at O’ahu!! The restaurants in Kaua’i had limited staff. Half the restaurant could be empty but we had a hour wait because there was only one server. They closed earlier than their posted times because of no staff. Very sad.

  5. Aloha! My family and I are visiting the Islands for the first time in February and have one inter island flight (Oahu to Maui). Was it discussed at the conference if the numerous flight delays are expected to continue into next year?
    Mahalo!

    Doug

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    1. Hi Doug.

      The conference wasn’t Hawaii-specific, and the flight delay situation largely is. We have not heard word on when the HNL runway will reopen, which is a big contributing factor. Our guess is that it won’t happen by February and that you can expect delays to continue until your trip.

      Aloha.

  6. Fortunately, My parents and relatives still lives and owns a property in Hawaii. It is expensive to really rent or book hotels with rental cars.
    I currently work in the mainland but I have noticed the drastic changes through the years of what my Island home has become. Yes I do agree that the Aloha spirit is slowly slipping away. Gone are the days when I was a kid playing on the shore and making friends with other kids visiting from the mainland or international. Hawaii does a have a great track record of voting bad regulators and politicians. I feel more welcome in San Diego when I visited and feel more at home in Portland Oregon where I am at now.

  7. My family and I have been traveling to Hawaii since the early eighties. The prices were always high but nothing like today. The 1st disappointment in Hawaii was the beginning of the pandemic I had booked a condo and paid full price in December of 2019. I waited for the airlines to stop flying before I canceled my condoreservation. The owner of the condo did not refund my money which was thousands of dollars because My reservation was for 3 months. I had rented that condo for 9 years every year and she refused a refund because she already paid taxes on it, what? We have reservations for one month in March And that is up in the air because of the 90 day rule for a condo. Aloha Hawaii

    3
  8. The comments about not getting workers are getting too much publicity. HI employers, at least on Kauai, are obstinate to the max. I am a qualified front desk clerk/auditor, yet no hotel on Kauai will hite me as my last position in this role was 2007. Since then I have been sole proprietor of my wedding business as an officiant. They imagine I cannot function in a hotel job now since I did not do it for 15 years. So what? It doesn’t matter, I do not forget how to do the job and each hotel is different, requiring training anew.They are dismissive of a qualified applicant ready to work now, holding out for someone with current experience, or experience from just before Covid. Dream on. Hotels cannot be picky now.

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  9. Issue number 8 you didn’t mention is the great reset. Fossil fuels are no longer legal and everything will be more expensive and everyone except the uber wealthy will have less freedom.

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  10. What are we doing wrong?

    For the first time ever we’ll be in Hawaii for the third time within a year this April. Prior being May on BI then Maui October.

    May’s trip to Fairmont Orchid to BI was a steal that I booked thru Costco, paid a bit over for GW October Maui, but just made another steal thru Costco at Marriott Wailea Beach for April on Maui.

    I do confuse I travel shop till I drop….But there’s deals to be had.

    All flights are booked with points thru SW or Hawaiian.

    1
  11. We’ve been going to Hawaii every winter since 2009. We’re going to the Big Island in January and this may be our last hurrah. It doesn’t feel the same anymore. We keep going back as we’re longing for that aloha but it’s just not there like it used to be sadly. This is partially due to price hikes but the service hasn’t been as great and people just seem more stressed all around. I think we may be sunsetting our Hawaii trips for something more affordable and on the mainland. Florida was pretty great last year!

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  12. We will not return to Maui after our 3 week trip Jan. 22. We love it but we will not pay the super high prices and then the extra charges on top of that. In April we discovered San Diego. We felt so welcome and it is a destination that is a much shorter and cheaper flight. California is pricy but so much more reasonable than Maui. And, no talk of not wanting tourists in California.

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    1. I live in San Diego. My out of state friends ask ” why would you want to go to Hawaii?” I do love the islands, however, they have changed. Very expensive and the “aloha” is almost gone. . .

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  13. Vacation rental prices may have risen to be near hotel prices But having a kitchen can save a whole lot. Restaurant food – even stuff like tacos and burgers – are outrageously priced compared to California. I wish all types of visitor acommations were forced to include all fevers/taxes in their posted rate, like the airlines have too, Show the Actual final price. Hotels can look a lot cheaper on a web site without these. Even as owners of a time share, we have to pay a daily fee + taxes. And valet parking is $30.

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    1. Good point by Jennifer regarding posted prices and “hidden” fees. This is a typical 10-day VRBO rental in Kaanapali.
      $322 a night = $3224
      Admin Fee 149
      Management Fee 119
      Cleaning Fee 180
      Service(VRBO)fee 402
      Tax 619
      Total = $4693

      2
  14. Coming next April 15 for 3 weeks. Staying with my brother-in-law and using his truck. No stinking taxes or exorbitant rental car rates for me.

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  15. Re: Your article on Honolulu’s new air conditioned terminal. Your’e right that there are basically no options for food/drink.
    We usually arrive plenty early for our flights. Earlier this month, we checked in for a flight departing around ten. Long story short, the flight was delayed & boarding over for four+ hours. The only drink places that I found were a Dunkin’ Donut, which was closed due to no workers, & a small bar, which was not what we needed. Finally, at the newspaper/book/magazine/sundries store we bought 2 pre-made sandwiches that were disgusting. Both the tuna & chicken fillings seemeed to have been made in a blender with tons of mayo, and lettuce starting to spoil. Greasy and inedible! Yuck! We felt starved!

    5
  16. The rental car rates are just out of control. It’s price gouging on steriods! But considering Hawaii would like to see less of us tourists, they are not going to do anything like put a waiver on some taxes or something to help the tourists. I love my time in Hawaii, but after 2023, not sure when I will return. The cost of the trip is getting crazy! I can’t imagine what Hawaii would do if they had no tourists?

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    1. New air-conditioned terminal??? Wait, here we have some of the most comfortable weather and fresh air in the world and now some bonehead decided we’ll close it up and use vast amounts of energy to keep it cool. Complete insanity. Yeah, with our sky-high utilities we’ll spend needless money on a/C. So much for climate change. Who was the idiot that came up with this design?

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  17. Mahalo for these comments! We are so fortunate that we have you both to be willing to keep us abreast of the latest developments in Hawaii travel. It is sad and depressing to see the path being taken but we hope that soon the powers that be over there will realize they are not making anything better for the Islands or the visitors. PS Wish I’d known you were headed to PHX, I would have loved to meet you for lunch!

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      1. We love Hawaii, and have toured there over 25 times. However, the prices for airfare and hotels plus rental cars are getting to be exorbitant! We probably won’t be going back for awhile. Lo adt summer, we went to Tahiti and Canada instead. I hope that Hawaii doesn’t add extra fees to touring there, or we won’t be going back for awhile. Aloha!

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  18. I plan to travel to Maui at the end of January into February 2023. I have be going to Maui for 20 years, I have never seen prices this high. 35-40% higher than 2018-2019.

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  19. This Fall is most likely our last trip to Hawaii for some time. The costs are now just too much. I have cancelled my Hawaiian Airlines card and am just using my Alaska card since they fly to a lot of other places I would go. Considering cancelling my Marriott card too as the value keeps decreasing for leisure travelers like me. Planning a trip to anywhere and especially Hawaii is starting to become a chore. It use to be fun but now it just makes me sad. Heading into retirement in a few years and it appears as if I’ll have to stay close to home more than I expected. On the bright side I did wake up on the right side of the grass today!

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  20. I have been traveling to Hawaii at least once a year for over 30 years having met great people and still have friends in Hawaii. Throughout all of the ups and downs, including those associated with the virus, I never thought that I would say that maybe it is time to find someplace else to spend what time I have left to really relax and yet that is exactly where I am at today. Sadly, the “spirit of aloha” is mostly a thing of the past in so many ways as I guess my visits will be too. Tax and spend is Not going to make Hawaii a better place either.

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