The State of Hawaii’s research arm, UHERO, reported yesterday on Hawaii travel in a massive and wide-ranging 48-page report on the state of the state. Important travel takeaways on point for us include the following, together with our observations (in italics). And, of course, we look forward to your input. We’ve included the entire report below for your review.
In 2023, Hawaii visitor spending reached the highest daily amount in over three decades (inflation-adjusted). That, to a significant degree, is based on dramatically higher costs.
Hotel room rates are reported to have stabilized, which we can confirm. They remain, however, at unacceptably high levels relative to the value provided. The state reports that there is a concurrent shift away from demand for luxury Hawaii accommodations.
For 2024, Hawaii visitor spending is expected to decline slightly, with stabilization perhaps coming in 2025.
International travelers may return to Hawaii gradually as “the US mainland market falls back a bit.” That having been said, the UHERO report makes clear that Japan, Canada, and Australia/New Zealand visitor numbers are all struggling.
It is not clear when improvement in those might occur. Part of the issue is their weak currencies compared to the U.S. dollar.
Hawaii visitor arrivals continue to be down 7.5%.
In March, as we previously indicated, Hawaii visitor arrivals were down 5% compared with last year. UHERO adjusts that to report the “average daily visitor census…was nearly 7.5% below the 2019 level. We’re awaiting April’s data.
Japanese visitors were at “less than 50% of their pre-pandemic level.” In March, Canadian visitors were down… 25% below pre-pandemic.
Perhaps in part addressing why Hawaii appears to court Japanese visitors moreso than it does U.S. visitors, the state reported the following:
“Japanese visitors typically spent one-third more per person than US visitors. However, post-pandemic, their spending has converged to roughly the same amount. While arrivals from Japan remain well below pre-pandemic levels, their still-solid per person daily spending… makes them an important part of the overall visitor mix.”
UHERO
The state believes we are in the midst of a “tapering of US arrivals, perhaps reflecting waning post-pandemic rebound travel. Based on other data, we find their assertions are likely incorrect. The “tapering” is, to a large degree, based on the lack of value that visitors are finding in Hawaii vacations. That combined with a world of other travel alternatives, as your comments have also confirmed.
For example, the European Travel Commission reports that in 2024, Europe will see “record numbers of foreign tourist arrivals and nights exceed 2019 levels.” That is being significantly driven by U.S. traveler demand.
Interesting notes include that the locations with the greatest improvement include Serbia, Turkey, Malta, Portugal, and Spain. ETC said that “These destinations offer competitively priced holiday experiences, often combined with milder winter temperatures.”
Therein is their hint towards the issues related to too-high Hawaii prices. We believe Hawaii vacation costs, including accommodations, taxes, and fees, is one of, if not the largest, obstacles to success in travel going forward.
Maui and Kauai are where prices sting the worst.
UHERO reported that “Maui continues to have one of the highest per-person visitor spending rates, primarily due to relatively higher room costs on the Valley Isle. Kauai exhibits similar visitor spending characteristics, also influenced by high accommodation expenses.”
These issues may continue to suppress visitor demand going forward, together with concerns on Maui about visitors being welcomed, as well as the latest prospect of vacation rentals problems ahead.
Light at the of the Hawaii Travel tunnel.
UHERO pointed to one fact that is, to at least a small degree, comforting. That is Hawaii accommodation rates have at long last stabilized. The prior concept of “no amount is too much” is over.
UHERO said, “Inflation-adjusted room rates have been essentially flat over the past two years, following a substantial increase in the aftermath of the pandemic.”
Regarding a move away from Hawaii luxury accommodations, UHERO reported that data suggests a “substitution away from the luxury segment. Between 2019 and 2023, room rates for luxury accommodations increased by 50%, while in the (lower) upscale segment, the increase was a more modest 30%. During the same period, occupancy rates dropped by more than 15 percentage points in the former category, but they remained essentially unchanged in the latter.”
24Q2_Forecast
It’s a terrible idea. There are always measures that can be taken to secure a location’s beauty remains beautiful but this is not the way. All these tactics will do is guarantee that only the super wealthy can appreciate Hawaii. I just got back from Kauai. My best description of how it felt was it was like Hawaii cannot decide if they actually want you there. In some places they are more than accommodating for those visiting. Yet in others, like some of the state parks, they don’t want you there at all. As long as the wealthy buy up 1000s of acres of land to leave it undeveloped, the poor will have inflated prices for their homes and/or will not be able to find adequate housing and it will just become a playground for the 1% of the 1%. It’s a shame because there are so many other ways to find balance. Most of the time “ecologically responsible tourism” is code for this place is only for the rich and the rich don’t want you here.
I think it is good to move toward more ecologically responsible tourism. That will of course mean more controlled movement of tourists, more directed, possibly with entrance charges and increased fees. Or the need for a cultural guide to lead small groups of tourism. However, one of the problems is that Hawaii is so heavy handed with short term rentals , and lumps the legal units in with any illegal units, that they have eliminated any chance at more reasonable accommodation options. For my money, im going somewhere more welcoming and I know lots of Hawaiians who will say good riddance. And that’s part of the problem.
Read a lot about how unwelcome people are to the isles. Oahu is crowded. Maui devastating by the fires.
Not enough accommodation for locals, never mind tourists. Not sure how to balance the need for tourist dollars and providing g for the locals.
Hotel rates are $$$. Not everyone’s first choice for a vacation anymore.
We have been visiting Maui for 20 plus years and have never seen costs. So steep. Prices combined with some obvious negative attitudes about tourism are requiring us to search other places for our winter break vacations. We are not planning a return next year and I don’t know when we may get back. As your article says there are so many other alternatives that are far less expensive but also provide nice warm weather during the winter months. In our opinion, Hawaii is shooting themselves in the foot and killing the goose that laid the golden egg!
Do Hawaiians have problems when they move to Vegas or Oregon? No, they do not. We were going to buy our forever home on Oahu, where we have a vacation home. Well now take the governor’s advice and stay home. Aren’t we one country? We will now stimulate Florida’s economy and live in a friendly community.Aloha spirit is a marketing phrase. Most of our mainland friends feel this way.
White are not welcome. My daughter always wanted to go to school in Fl. She changed her mind due to Fl politics and decided to study environment law in Hawaii. Thinking she would find Aloha and learn about the culture and hep protect the beautiful land. Instead grown Hawaii men and women accuse this 23 yr old of stealing their land. Really?? Hawaiians are angry and bully people different than them just like in Florida.
So many potential factors affect travel to Hawaii. Airfare is a significant factor, as is rental car price. Many people I know- maybe everyone I know – choose their vacation destination on the cost of airfare. When a ticket to Australia or Europe costs less than a ticket to Hawaii – something I’ve seen hundreds of times and which, of course, is dependent on dates of travel – there will be an impact on Hawaii tourism. I look at Hawaii airfare constantly because I own a home on the Big Island and my family travels there regularly. Comparing the absolute cheapest airfare to Hawaii from 2023 to 2024 I’ve seen a 63% increase in price. This has not been the case to other destinations. Car renters should us the Turo app.
It is obvious that we are not welcome as tourists in Hawaii, especially Maui. Our family has visited about 100 times, and 2 family members live and work on the islands temporarily. We won’t be back as tourists because we aren’t wanted, and Hawaii will continue a declining tourist trend for years. As the only real source of income declines, so will the standard of living for locals.
We have previously traveled to Hawaii over 20 times. First off, we Love Hawaii but this year we travelled to Cabo San Lucas and stayed at a wonderful all inclusive resort. It was a much shorter plane ride (2 time zones instead of 5). The cost was literally half of what we would of spent in Hawaii.
We travel to Maui yearly. This year was especially painful. You can’t afford to eat out and groceries seem to have tripled. Even Costco. We realize groceries went up everywhere and Hawaii has shipping but I felt bad for families travelling to Maui. Pretty hard to feed them. Airfares are also going up even with all the bad press. A shame
When I look at vacation options for my family, I choose to forgo Hawaii. The islands are not welcoming to tourists. The locals looks at you like you are an invader. We went to a luau last year and paid sky high prices for a nice show and some subpar buffet food that can be found in the Midwest for 1/10 of the price. The beaches don’t have nice public bathrooms and showers like
those in Dubai, for example. The nature is stunning yes. But we can find much better accommodations, food, and shows in other locations.
Despite the report, on the ground there’s no evidence of it. I’ve been in HNL since Tue and I can tell you that it’s overrun with visitors. Waikiki is as crowded as I’ve ever seen it. All of the venues are jam packed from go… Mother’s Day crowds at the beaches here are amazing in their numbers. Perhaps the slowdown is primarily concentrated on the neighbor isles. There’s no sign of it here.
Happy Mother’s Day!
It’s been my experience, too. I’ve been reading these negative comments for months and every time wherever I turn around, whether it’s O’ahu or Maui, everything is packed. Restaurant reservations are a challenge to say the least. May was unusually busy and this summer probably won’t be any different. I understand the reasons that made many visitors move to other destinations, but as of now it seems to have had barely made a dent in overtourism.
With Maui Hotel rates and visitor costs soaring, I doubt that eliminating short-term rentals on the Minatoya list is going to help. This will give the hotels more incentive to raise rates further. There are many families who can’t afford to put up everyone in an expensive hotel room and eat out every night. Furthermore, most local residents would not be able to afford to buy or rent most of these rental properties.
We have always loved going to Maui, renting one of the Kapalua Bay Villas for two weeks. We have done this for over 30 years. We were devastated to see the Lahina fire damage… and even more devastated to hear that as tourists we were unwelcome. We have decided to go to Europe this year. There is no sense going where you are not wanted. Aloha Hawaii!
A farmstay differs from most VRBO and Airbnb listings in that 1) the owner/operator must live on the farm and show that he/she derives the majority of his/her income from farming, 2) TVRs on farms help support the local economy and reduces the need for food dependence on imported food 3) reputable farm stays charge reasonable outclean fees, ranging in prices from $125 to $175. Great cleaners are now charging $50 per hour, and deserve to be paid what amounts to a living wage here on Kauai.
Thanks for the explanation… I am guessing you are associated with Aloha Ola Farms.
I agree that people need to be paid a fair wage, it just seems like everything gets passed on to consumers now whether it is a service fee at a restaurant or tipping at Starbucks for being handed a coffee, consumers are getting squeezed at every opportunity (this is not limited to Hawaii).
If the cleaners are running a separate business from the farm stay and the fee gets passed on to them and supports another small business, I can see where this could be justified. I like that it offers locals the opportunity to make a decent wage, instead being paid a low wage for similar work at a resort
Exchange rate is clearly one driver, and in general costs in Hawaii are of control. Compared to Thailand or the Philippines, hotel costs are much higher in Hawaii for a much older, lower quality product and food and drinks are much more expensive too. Unclear why anybody in Japan would choose to come to Hawaii over Phuket or Boracay at half the price.
Hawaii obviously has a housing affordability problem but eliminating short term vacation rentals is simply going to exacerbate this problem. Some people prefer to rent a house on AirBNB with friends and family rather than getting ripped off at some 70s era hotel on Waikiki Beach. If Hawaii removes this option, don’t expect the tourists to come back.
Prices at farmstays and condos have moderated as demand has dropped, at least here on Kauai. And no one here is dissing the tourists; we appreciate the support and the dollars, that they bring.
Perhaps it is time to forget hotel stays and perhaps even time to forego Maui as an outer-island destination, and to come enjoy the laid-back vibe on Kauai.
I have visited Hawaii 15-20 times, but no more. Hotel fees, resort fees, parking, and fees to visit everything are now out of hand. People are not as friendly.
I now go to the Carribean and Florida. Reasonable prices. You’re not fee’d to death. The people are friendly and make you feel wanted. No lecturing on how I need to follow the aloha spirit. Hawaiians need to start listening to their own lectures.
I miss Hawaii, but I won’t go where I’m not wanted.
I have gone to Hawaii for years, but I have never seen the airfare as high as it is this year. I was arranging an entire family vacation there and providing the accommodations for my children. They couldn’t afford the airfare and the cost of the food so they are not coming. I think you’ve reached the point where only the wealthy can come to Hawaii.
Seems just like the fifties and sixties, a time when only the elite could afford to go to Hawaii.
Visitor numbers are down, because people are tired of getting gouged, and ripped off!! $50 just to enter the state. Environmental impact fee? How about a rail is failing fee? That’s what it’s all about. Loses money every day!!
Has Hawaii started charging the $50 fee to enter the state? How do they collect it?
Another factor for international visitors is the exchange rate. The dollar is very strong compared to the yen or Canadian dollar. Vacations have increased 30% to 50% on the exchange rate alone.