Travel Weekly's Hawaii E-Letter: January 28, 2002

CLASSIC VACATION GROUP agreed to sell its Classic Custom Vacations subsidiary to Expedia. The sale is expected to close in 60 days. Classic Custom Vacation's chief executive officer Ron Letterman assured travel agents that the company remains committed to the travel agency distribution system. Letterman will continue to head Classic Custom Vacations, along with his former upper management team, including Debbie Lundquist, who was promoted from chief financial officer to chief operating officer. Classic Vacation Group, will receive $5 million in cash and will retire $47 million in debt using Expedia stock. In addition, Expedia will assume liabilities of $30 million. "CVG will have money to liquidate that corporation and provide a distribution [of remaining assets] to the shareholders," said Lundquist.

VISITOR NUMBERS to Hawaii dropped 9.1% in 2001 compared to 2000, from 6.9 million visitors to 6.3 million, according to the Hawaii Department of Business Economic Development & Tourism. The number of visitors from the U.S. dropped 5.1% in 2001 and the number of visitors from Japan dropped 17% on the year. Hawaii's core U.S. market, the West Coast, saw visitor numbers drop just 1.6% on the year to 2.3 million in 2001 while the number of visitors from the East Coast dropped 5.8% to 1.6 million in 2001.

SUNTRIPS of San Jose, Calif. on Feb. 28 is moving its Hawaii flights from the San Francisco airport to the Oakland, Calif., airport just across the San Francisco Bay. Following the move to Oakland, SunTrips will add a sixth weekly flight from Oakland to Honolulu on March 20. On March 24, the wholesaler will start air service with packages from Oakland to Kona on the Big Island through the end of the year. Then from June 15 through Aug. 24, SunTrips will add a second weekly flight to Kona from Oakland with a stop on Maui.

GETTING A LIFT: Hawaii is getting more air service from the U.S. mainland:
• United Airlines is adding on Feb. 2 a Saturday and Sunday flight from Denver to Honolulu using a 777 aircraft. On Feb. 15, United will reinstate one flight each day from San Francisco and Los Angeles that it cut after Sept. 11.
• Hawaiian Airlines on March 15 will start a daily flight from Seattle to Maui. Hawaiian already offers a daily flight from Seattle to Honolulu. Also, Hawaiian is resuming daily service from Los Angeles to Maui June 15, a flight it cut Oct. 1. On the same day, Hawaiian is adding new daily service from San Francisco to Maui. From June 15 through Sept. 2, the carrier will add a fourth daily seasonal flight from Los Angeles to Maui. The two Maui flights will be on 767-300 aircraft while the Honolulu flight will be on a DC-10.

TURNWORKS, the company attempting to merge Hawaiian and Aloha airlines, is looking at using 717 aircraft for interisland flights and either 757 or 767 aircraft on flights from the mainland to Hawaii, according to a company spokeswoman. Currently Aloha Airlines uses three different types of 737 aircraft for both interisland and mainland flights while Hawaiian uses 717 aircraft for its interisland flights and a combination of 767 and DC-10s for its mainland flights.

HAWAII VISITORS AND CONVENTION BUREAU president Tony Vericella wants to raise the amount of money that meetings, incentives and convention groups spend here each year from 15% of the nearly $10 billion visitors spend each year to 33% of the total. But that goal could be tough given the market's desire to stay near home and because of competition from other destinations that have poured money into facilities recently, according to Jerry Wayne, chairman of Meeting Professionals International. Both Wayne and Vericella spoke at the MPI conference in Honolulu last week. "Location is a key element for meetings right now," said Wayne. "You're going to see cities that have easy accessibility thrive when the industry shrinks like it has," said Wayne.

ATLANTIS ADVENTURES of Honolulu renamed its Navitek Cruises division Atlantis Cruises. Atlantis Cruises offers lunch, dinner, whale watching and cocktail cruises.

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