Hawaii copes with drop in Asian visitors

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Hawaii welcomed 6.74 million visitors last year, a decline of 1.9% from 1997, according to the Hawaii Visitors & Convention Bureau (HVCB).

Surfing off Pipeline Beach.An increase in U.S. mainland arrivals was not enough to offset the drop in Asian arrivals. The state is dependent on the Japanese for 30% of its visitors; Canada, its second-largest international market, accounts for 5%, and the U.S. accounts for 54%.

While 1998's U.S. mainland arrivals, totaling 3.57 million, were up 5.5%, the 1.96 million Japanese arrivals reflected a drop of 6.3%. In 1997, Japanese numbers were flat. Visitors from other Asian and South Pacific markets plummeted 23.2% last year.

With 25% of the state's gross product coming from tourism, the Asian economic crisis has prolonged what is now an eight-year economic slump for the islands. Last year's total arrivals were 3.3% below those of 1990, the peak visitor year, and mainland arrivals were still more than 10% below their peak of 1989.

With so much at stake, the Hawaii's Legislature last year nearly doubled tourism marketing funding for 1999, and established a state agency for tourism called the Hawaii Tourism Authority, with an 11-member board. A dedicated source of funding -- derived from a fixed percentage of the state's hotel room tax (which increased from 6% to 7.5% Jan. 1) -- will provide the HVCB with about $47 million this year.

The HVCB began accelerating its marketing effort in Japan last fall. Then, in January, it kicked off a year-long $10.4 million Japanese campaign with the theme Big Relax, Big Hawaii.

Hawaii's own former sumo star, Konishiki, who recently retired, appears in television commercials and print media ads in Japan.

In the second half of 1998, a stronger yen and extended-stay options offered by wholesalers helped increase the Japanese length of stay slightly, according to the HVCB. Despite a weakened yen now, the HVCB is forecasting a better year for Japanese arrivals in 1999, with an 0.3% increase over 1998, although it expects U.S. mainland growth to slow.

Of the other major international markets, westbound Canadians totaled 261,490 last year, a 4.3% increase. Canadian visitors were running a 7.2% decline through September, but additional charters flights boosted the fall and peak winter seasons.

European arrivals, totaling 207,060, dropped 4.9%. A 5.8% increase in the 64,480 U.K. visitors was not enough to offset a 16.1% decline in the 58,350 German arrivals last year.

Of all the major islands, Oahu has been hit hardest by the Asian decline (almost all Japanese stay on Oahu, which in 1997 saw more Japanese than mainland visitors).

According to management consultants PKF-Hawaii, last year the average hotel occupancy in Waikiki (which has most of Oahu's hotel rooms, and Oahu has half the state's 70,000 rooms) dropped by almost 5 percentage points to 74.9%. Hoteliers maintained rates at the expense of occupancy (Waikiki's average room rate declined only slightly -- $124.24 last year, compared with $124.50 in 1997, according to PKF-Hawaii). The statewide average occupancy was down just two percentage points.

Oahu also suffered flat westbound arrivals last year despite a 4.1% increase in total visitors arriving westbound, from and via North America, the HUCB said. More westbound visitors are bypassing Oahu, connecting at Honolulu Airport or flying direct to the neighbor islands.

The major neighbor islands -- Maui, Kauai and the Big Island -- are less dependent on Asian visitors, and mainland arrival growth was enough to offset Asian declines last year. However, they all showed 10% to 12% drops in eastbound visitors except the Big Island, which bucked the trend for the second consecutive year.nHawai

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