State: Waning Hawaii Travel Rebound As Visitors Seek Alternatives

Visitors Seek Alternatives as Hawaii Travel Rebound Wanes Says State

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.

Kauai May Seriously Lose It Now Courtesy of Elon Musk!
Awa’awapuhi Trail, Kauai, Hawaii

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

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49 thoughts on “Visitors Seek Alternatives as Hawaii Travel Rebound Wanes Says State”

  1. 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.

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  2. 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!

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  3. 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.

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  4. 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.

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    1. 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.

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  5. 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.

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  6. 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.

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  7. 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

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  8. 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.

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