Resident visitors soften Oahu's fall in Asian, mainland arrivals

HONOLULU -- Oahu's attractions suffered not only from a decline in Asian arrivals last year but also from a drop in U.S. mainland visitor attendance.

According to the Hawaii Visitors & Convention Bureau, more than 60% of the mainland tourists had visited the area before and were less inclined to take in attractions.

So it came as a surprise here when the Hawaii Attractions Association released its 1998 figures.

According to the group, the 9.5 million people who visited member attractions last year on the main Hawaiian island, which contains Honolulu and Waikiki, were down only 1.4% from 1997.

The 20-member Attractions Association oversees most of Oahu's major attractions, museums and visitor activities. Although several facilities also have operations on neighbor islands, the numbers reflect Oahu sales figures.

The explanation for the slight decline was resident attendance, which grew by an astonishing 25.1%, to 2.3 million, last year, according to KPMG Peat Marwick, which compiles the figures.

In comparison, Asia/Pacific visitor attendance, 3.2 million, was down 10.3%, in line with Hawaii's eastbound arrivals decline. Attendance by westbound visitors (arriving from or via North America), 4 million, was down 5%.

With the decline, attractions have turned increasingly to the resident market of 870,000, and those heavily dependent on Asia are scrambling for more mainland business.

Discount coupons, heavily discounted rates for residents, co-op merchandising with free gifts, and buy-one, get-one-free offers have proliferated. "Many attractions depend on first-time visitors. The big increase in residents saved many of them last year," said Bob Taylor, HAA's chairman.

However, Darrell Metzger, Atlantis Adventures president, said that attractions have paid a price in revenue-per-visitor rates to attract more local and westbound business. "We try to maintain our price integrity, but the mainland market is tough. So many [visitors] have been here before," he explained.

Atlantis Adventures owns and operates Atlantis Submarines Hawaii; manages Waimea Valley Adventure Park and Sea Life Park, and provides sales and marketing for the USS Battleship Missouri Museum. Metzger said at one time, Atlantis could sell a submarine excursion for $99. Last year, Atlantis introduced the $99 Value Pass, which includes a submarine ride as well as admission to both Sea Life Park and Waimea Valley and a choice of either kayaking, an all-terrain-vehicle tour, mountain biking, horseback riding, lunch at Waimea or a USS Missouri tour.

Metzger's experience is borne out by KPMG's report, which found that gross revenue per visitor at member attractions was down 3.3% last year.

But the attractions' problems go beyond getting repeat visitors inside the gates. Not only is Oahu more dependent on slumping Asian markets than the neighbor islands are, but the trend is for more westbound tourists to fly directly to those islands, bypassing Oahu.

Also, nonstop flights to neighbor islands have increased. Last year, Oahu's 4.7 million visitors were down 5.5% from 1997. While Hawaii's westbound arrivals were up 4.1%, Oahu's were up only 0.6%.

Meanwhile, the major neighbor islands all showed arrivals growth; their westbound visitor increases were enough to overcome the Asian slide. For the first two months of this year, Oahu's visitors dropped another 5.3% while Hawaii's total arrivals were flat (up 0.1%).

Many see more aggressive promotion to markets likely to produce first-time visitors -who are also more likely to stay on Oahu -- as a way out of the dilemma.

The Hawaii Visitors & Convention Bureau and Oahu Visitors Bureau have made it a priority to aim marketing efforts at first-time visitors from the U.S. mainland. This month, HVCB's first seminars for its new agent specialist program are being held in the Midwest, Southwest and East -- areas more likely than the West to provide first-time visitors.

Some attractions have been going after Honolulu's growing cruise ship market. HHA's Taylor, who is president of Maui Divers' Jewelry Design Center, said sales figures for his cruise business are up substantially.

But with very little local business, sales were down 8% last year, he said. Mainland business was flat, and Asia dropped 15%, although Japanese arrivals increased because of a market- share increase, Taylor said.

What hurt the company was the Korean market. "We had 50,000 Koreans -- half of Hawaii's Korean market -- in 1996. Last year, we saw only 1,000 Koreans," he said.

Hilo Hattie -- the largest retailer and wholesaler of Hawaii fashions, gifts and souvenirs and its largest resort-apparel manufacturer -- also is aggressively going after the cruise market and reported an increase in business. "The challenge is the large number of repeat visitors who say, 'Been there, done that.' We have to constantly come up with new ways to attract them," said Carlton Kramer, vice president of sales and marketing.

On May 1, Hilo Hattie will introduce its latest coupon program, with one free admission to attractions and activities with one paid admission. With any purchase, even a candy bar, the free offer covers 10 attractions and activities plus greens fees at five Oahu golf courses.

With the purchase of a Hilo Hattie-labeled garment, shoppers will get 10 coupons for meals at restaurants. Kramer said Japanese business increased last year because a major competitor closed, and resident business increased because of the opening of a store at Ala Moana Center.

The company, which offers discounts to travel agents, began going after meetings business last year and came out with a group brochure.

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