Hawaii Airlift increase, hotel packages are fueling Hawaii's recovery By Shane Nelson / May 31, 2010 Share 1 -- Those searching for positive news about Hawaii's suffering visitor industry might finally have reason for at least a little excitement. Available air seats to the Islands are on the rise, and state officials expect capacity on nonstop flights to Hawaii this summer to be the best in years. The state's much-publicized airlift difficulties began in spring 2008, when the collapses of Aloha Airlines and ATA cut airline capacity to the Islands by 15% and helped contribute to a 10.6% decline in overall arrivals to Hawaii for the year. Throughout much of 2009, year-over-year air seat capacity seemed to either dip slightly or remain essentially flat. But that trend changed in early 2010, and now industry officials are projecting significant annual increases. "We will have the equivalent of one extra month of air seats coming into the destination this year vs. last year," explained Jay Talwar, senior vice president of marketing for the Hawaii Visitors and Convention Bureau. "So that's a little over 500,000 extra seats coming in." According to Daniel Nahoopii, director of tourism research at the Hawaii Tourism Authority, nearly 2.5 million seats are expected to arrive on nonstop flights to Hawaii this June through August. Nearly 1.9 million of those are projected to come from the U.S. mainland, jumping 8.5% from the same period in 2009. Repositioning by Hawaiian Airlines has helped cover some of the capacity lost with Aloha and ATA's departure, as has the arrival of Alaska Airlines, which began flying to Hawaii in October 2007. "Alaska has been a huge player in helping us regain positioning off of the West Coast," said David Uchiyama, vice president of brand management for the Hawaii Tourism Authority. "We've had many of the carriers step in. Continental, for example, stepped into a void that we had in Orange County [Calif.] while also filling additional seats out of L.A. and San Francisco. ... But I think it's also important to emphasize that for an air carrier to consider a destination, the demand has to be created." The difference in available air seats during summer 2007, a year of record revenues and visitor arrivals in Hawaii, and the seats scheduled for the same period in 2010 illustrates how much ground the destination lost during the economic downturn. In 2007, 2.7 million air seats arrived on nonstop flights to the Islands from June through August. Nearly 208,000 fewer seats are expected during the same period in 2010, a difference of 7.7%. Promising indicators During the first quarter of 2010, visitors arriving to Hawaii by air spent a total of $2.7 billion, up 5%, or $130.1 million, from the same period last year, according to statistics released by the Hawaii Tourism Authority. Total visitor arrivals during the quarter were up 4.1%, and spending by those who came by air in March was up 12.7%, the largest monthly year-over-year increase since April 2006. A May 11 report released by Hospitality Advisors and Smith Travel Research found that hotel occupancy was up just over 4% across Hawaii in Q1 2010, continuing an upward trend started during Q4 2009. According to the same report, revenue per available room, or RevPAR, was up 2.7% in March, to a statewide average of $122.43 a night. That modest growth represents the first monthly year-over-year RevPAR gain across Hawaii since March 2008. Looking ahead, the folks at MLT Vacations are expecting Hawaii's trend of promising winter and spring year-over-year figures to continue into the summer. "This summer we're looking at, in our business [to Hawaii], bookings up over 30% year over year," said Ken Pomerantz, MLT Vacations president and chief marketing officer. "And from a market share perspective, Hawaii is representing a larger percentage of our business this summer than it did last summer." Pomerantz said his company's business to Hawaii is up this summer for two reasons. "One is some additional air capacity that we have to offer, primarily through some new service that Continental Airlines is offering," he explained. "And then the second is some much better values in the market year over year. So we have a lot of promotions and offers out there for things like kids staying free and breakfasts, resort credits. So that kind of stuff is pretty predominant in the market and I think doing a good job to stimulate travel." Already gearing up for the summer rush, Hawaii hoteliers are busy sending out details concerning a head-spinning range of packages, and many seem downright hopeful about the prospect of a strong summer season. "I think all of the hotels in Hawaii are expecting to have a great summer," said Lora Gallagher, regional director of marketing for Hilton Hawaii. "The setup for summer is really a focus on family travel for us, and all three of our resorts ... have great children's programs and lots and lots of packages that families can purchase." Through Dec. 31, guests booking at least four nights at the Big Island's Hilton Waikaloa Village can take advantage of the property's Ocean Explorer Family Escape package. The special includes a daily breakfast buffet for up to two adults and two children; a glass-bottom-boat cruise; and a backpack for each child registered, featuring a camera, postcards, activity books, key chains, magnets and an ocean fish guide. Starwood Hotels & Resorts Hawaii is offering guests of its Royal Hawaiian and St. Regis Princeville properties a $1,000 resort credit with every five-night stay. Those spending five nights at any Sheraton or Westin on Oahu, Maui, Kauai or the Big Island are eligible for a $500 credit. Guests who stay at least 10 nights at Starwood Hawaii properties receive double the credit. "That just gives our guests, and particularly our families, a lot of flexibility once they get here," said Dale Carstensen, regional director of leisure sales for Starwood Hotels & Resorts Hawaii. What's selling It's no secret that the world's recent economic challenges have changed the way consumers are approaching vacations. People are still booking trips to Hawaii, but according to Pomerantz, value is paramount. MLT is seeing significant growth in its summer bookings at midscale condo properties across the state, where room rates have been reduced and visitors can save on food costs by purchasing groceries. "The luxury properties are also selling quite well," Pomerantz said. "The prices are down, and they've become affordable for a broader set of customers. For travel agents, the opportunity right now is to really sell luxury properties and provide a five-star experience at four- or three-and-a-half-star prices." Maximizing time away from home during the trip seems to be another important goal for visitors and a chance for agents to increase their bottom lines through Hawaii's activities market. "I think vacations are something that people value a little bit more now," Talwar said. "And they are a little bit more critical about the experiences, because they probably won't have as many vacations as they had three or four years ago. We've seen in our research that consumers want to make sure that the vacation experience they have is a hit. They don't want to take a chance on it. Fortunately, Hawaii performs real well that way, but on top of that the agent needs to be educated on all activities that visitors can have in the destination." At this point, cautious optimism, especially with regard to some of Hawaii's recent positive indicators and the approaching summer season, seems to be the prevailing sentiment. "We're up significantly year over year, but we are very conscious that 2009 was a much slower year than Hawaii has experienced," Uchiyama said. "So although we're up year over year, we are still not where we need to get." Even so, all those positive indicators appear to be a welcome sight. "Right now, looking at the horizon, I think we're in a pretty good position unless we have something pop up unexpectedly," Uchiyama conceded. "I think overall momentum is building, seat inventory into the state is good, and the demand that's being created by our marketing contractors seems to be on track." This report appeared in the May 24 issue of Travel Weekly.