Travel Weekly's Hawaii E-Letter: July 16, 2001

ROUTE CUTS and equipment changes caused the number of air seats from the U.S. to Hawaii to drop 3.8% during the first five months of the year compared with last year, according to the Hawaii Visitors and Convention Bureau. The number of visitors to Hawaii from the U.S. dropped 0.6% during the same period. The number of seats on Delta dropped 25% during the period; United seats dropped 15.8%; and Continental dropped 6%. On the up side, the number of seats on Aloha Airlines flights increased 51%; TWA 60%; Hawaiian 10%, and American 6%.

AMERICAN CLASSIC VOYAGES, parent of American Hawaii Cruises and United States Lines, is facing a cash shortage in 2002 due to a costly shipbuilding project that's behind schedule, intense cruise-industry price competition and a slowdown in Hawaii tourism, according to one analyst. Timothy Conder, an analyst with St. Louis-based A.G. Edwards, told Crain's Chicago Business that the company "will be well into a $30 million line of credit by the end of the year." Conder said that barring a rapid turnaround, "people will be looking to see if Sam Zell steps up or the company looks elsewhere." Zell is a billionaire investor, ACV's chairman and the largest shareholder in Nasdaq-traded ACV. Zell's longtime partner Robert Lurie owns a 35% stake. Philip Calian, ACV's CEO, said the company "[Has] no need for additional cash right now and has no plans to seek it."

DELTA AIR LINES will start once-daily nonstop service from Salt Lake City to Honolulu Sept. 1. The carrier will use a 287-passenger 767-400 on the route with 251 seats in coach and 36 seats in first class.

OUTRIGGER ENTERPRISES is planning a $300 million redevelopment of Waikiki land it owns on one of the most heavily developed blocks in town. Starting sometime in early 2003, Outrigger will tear down three hotels at the west end of Waikiki near Fort Derussy: the Edgewater Lanai, which currently is vacant; the Ohana Coral Seas, and the Ohana Edgewater. In place of the hotels will be new retail outlets, more open space for pedestrians, meetings space and entertainment areas. That phase is set for completion in 2005. Phase two should start in 2006 with the elimination of the Ohana Reef Lanais, the Ohana Royal Islander and the Malihini Hotel, all of which will be replaced by a new 890-room Outrigger hotel.

FEELS LIKE THE FIRST TIME: First-timers to Hawaii make up a higher percentage of total visitors from the East Coast than of those from the West Coast, according to the Hawaii Visitors and Convention Bureau. By region, 47% of Hawaii visitors from New England were new to the islands, as were 50% of visitors from the Middle Atlantic states and 47% of those from the South Atlantic. By comparison, first-timers from the Pacific region made up 23% of that market and 32% of Hawaii visitors from the Mountain region were first-timers.

THE CITY OF HONOLULU and the Waikiki Improvement Association will close off Waikiki's main beachfront drag, Kalakaua Avenue, for a breakfast block party on the second Sunday of each month. The first brunch was held July 15. The idea behind the brunch on the beach from 10:30 a.m. to 1:30 p.m. is to get visitors to mingle with local residents, said Peter Apo, director of the office of Waikiki Development for the city. The street will be covered with artificial grass and hotels and restaurants will sell breakfast in tents and offer table seating for 450, said Apo.

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