Industry sees summer as season of recovery

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HONOLULU -- A wave of optimism is swelling in Hawaii's visitor industry for a growth in U.S. visitors this summer.

Hawaii Visitors and Convention Bureau president Tony Vericella told members of the Hawaii Tourism Authority recently that after months of doom, things are looking up.

"The recovery on the U.S. side is clearly under way, and we have already reached prior-year levels of visitors," Vericella said. "At the same time, airline seats reached 100% of prior-year levels through March. By midsummer, we will have tens of thousands of new airline seats in the market."

A look at statistics provided by the state shows that visitor levels for the first three months of 2002 exceeded prior-year levels in some weeks but were down slightly overall.

Figures for the mainland market indicate visitor numbers from January through March were down 3.5% compared with the same period last year. In the first three weeks of April, preliminary figures show mainland visitors down about 6.5% compared with last year.

Although the number of mainland visitors continues to fluctuate, captains of the industry here are talking growth and recovery for the summer.

Paul Casey, chief executive officer of Hawaiian Airlines, said, "When we look at advance bookings for the summer, we are five to six percentage points ahead of last year."

Both Hawaiian Airlines and its rival, Aloha Airlines, added routes and frequencies to the mainland in recent months.

Hawaiian will start daily Phoenix-Honolulu service using a 767-300 on Oct. 11.

The carrier initiated service from Seattle to Maui on March 15. Service from Sacramento and Ontario, Calif., to Honolulu will begin June 7, and flights from Los Angeles and San Francisco to Maui will start June 15.

Meanwhile, Aloha Airlines will start daily service from Burbank, Calif., to Honolulu on June 1 and from Vancouver to Honolulu on June 15.

Pearl Imada-Iboshi, the state's chief economist, said, based on visitor numbers, the summer looks good and the spring has been better than expected.

"The numbers have looked pretty solid for the last few months," said Imada-Iboshi. "We've had visitor numbers from the U.S. at levels 95% to 100% of last year's figures. Spring break in March was more than 100% of last year's levels."

Imada-Iboshi attributed a renewed vigor in the market to "an improving U.S. economy as a whole and falling average room rates in Hawaii."

Through March, average room rates were down compared with the same period last year, from $149 per night to about $141, according to Joseph Toy, president of Hospitality Advisors in Honolulu, which supplies the state with hotel statistics.

During some weeks through mid-April, average room rates were down as much as 20%, Toy said.

All the discounting in the market is resulting in what Toy labeled a "trade-up in travel," where customers who normally would be able to afford a midprice hotel now might be able to trade up to a luxury property due to the drop in prices.

"That is a similar pattern to what we saw in 1994, 1995 and 1996," Toy said.

Cheryl Williams, director of leisure sales and marketing for Starwood Hotels in Hawaii, said occupancies at Starwood properties on Molokai, Lanai, Maui and the Big Island will increase 4% to 5%, to the mid-80% level, this summer, which should be "at or above 2001 levels."

"In Waikiki, we're looking at occupancy in the high 70s and low 80s, which will be flat compared with last year."

Williams said she knew the summer season would start to turn around as far back as December, despite the gloom following Sept. 11.

"I think we started to get our arms wrapped around the situation in December because all the predictions by economists were for a second-quarter recovery," she said.

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