Industry leaders tackle Hawaiian issues at roundtable

Looking to appraise the ever-changing state of tourism in the Aloha State, Travel Weekly recently invited executives from airlines, hotels and tour operators to gather with their colleagues from government tourism organizations for a roundtable at the Waikiki Beach Marriott Resort and Spa in Honolulu to discuss travel and tourism to and among the Islands. 

Moderated by Travel Weekly Destinations Editor Kenneth Kiesnoski, roundtable participants tackled hot topics such as sustainable growth, affordability, competitiveness and community involvement. (Editors note: The original transcript has been edited for length and flow.)

Kiesnoski:Whats the state of Hawaiian tourism today, more than four years after the 9/11 attacks?

Rex Johnson, president and CEO, Hawaii Tourism Authority: Weve had a record year. We think it will end up at around 7.4 million visitors, which is pretty much all we can take here in Hawaii.

So weve had a fantastic year, as good as we can have, with improvement in all our major market areas. For this year, were looking at about a 2% growth rate.

Chris Tatum, general manager, JW Marriott Ihilani Resort and Spa: The real strength last year was that group and incentives business came back, which is important for a resort like ours. [Meetings planners] cant believe what we have ... throughout Hawaii: the tremendous facilities ... the cleanliness and the security. This year is going to beat 2005, so theres nothing but positive indications right now.

Rob Solomon, senior vice president, sales and marketing, Outrigger/Ohana Hotels and Resorts: Its been really gratifying from a business results [perspective], especially because were rebuilding and reinventing the destination ... in Waikiki. Were delivering a much better experience to visitors today. While its nice to have the money in the bank from good operating results, the real equity were building is with our customer base. Hawaii has been a really strategic destination. With the changes in the economy and real estate market, theres been investment in every part of this state. Weve bought and sold properties, as have other companies, and every new investor without exception has invested more in improving the product and the experience. Thats a fundamental source of our optimism for 2006.

Kiesnoski:Is Hawaii insulated from market fluctuations somewhat because its a dream destination of a lifetime, like Italy? Do travelers come to Hawaii no matter what?

Marsha Wienert, tourism liaison, Hawaii Department of Business, Economic Development and Tourism: We feel Hawaiis got even more of a grip or hold on the public imagination than Italy because of not only its exotic appeal but also because its a part of the U.S. 

Jay Talwar, vice president of marketing, Hawaii Visitors and Convention Bureau: Hawaii is a great product to have, with high product satisfaction, demand, awareness and desire.

So its really a matter of looking at maintaining those [positives], moving that [travel] intent to conversion and working with the trade to ensure were providing the right tools so they can convert the right people.

Were working really closely with researchers at looking at who the appropriate targets are for the product we have. The great thing we have is that this destination is six islands. Each of the islands offers unique experiences and character ... but there are also a lot of commonalities.

Thom Nulty, senior vice president of marketing, Aloha Airlines: This is a prime destination for all airlines. Its the place everyone wants to use their frequent-flyer miles, its the place people dream of coming to, and we get a lot of return visitors. 

Kiesnoski:Is your job about solidifying the captive market that intends to visit Hawaii or is it about vying against competing destinations for new tourist dollars? Im thinking of Punta Mita, just north of Puerto Vallarta, Mexico. Trade types there talk about it as an alternative to Hawaii, offering the same climate but a more exotic culture -- and much cheaper prices.

Nulty: Its still Mexico. Yes, there may be less expensive destinations, but theyre not part of the U.S., and they cant give you the same environment we can give you here.

Talwar: Once people experience Hawaii, they notice the difference. We have one thing [competitors] dont: the people of Hawaii. Our challenge as a marketing agency is how to communicate that in a magazine article or television spot. But once people come here, they get it.

Kiesnoski:Are more people abandoning Waikiki and deciding to visit other parts of Oahu and the other islands instead? Is interisland traffic growing? Are multi-island itineraries popular?

Nulty: Some visitors have been here several times, have their favorite place and know where they want to go. They generally fly directly there.

Yes, the interisland market still exists for tourists and visitors do like flying from island to island. Some want to stay on each island, or just one, while others just want to visit for a day.

Kiesnoski:Is there a typical Hawaiian stay? And has the typical vacation here, or the typical visitor, changed in any way?

Nulty: In the past, every passenger connected in Honolulu to get to the neighbor islands but it just isnt necessary any longer. All of us in the airline industry now target our transpacific flights into places where the hotel rooms are. We still get people doing multi-island trips but not as much as we used to. We get more repeat visitors each year, and once they decide on where they want to stay they stick to it.

Johnson: Ive got to point out that Oahu had a fantastic year in 2005, one of the best in a long time. So obviously the monies the Marriotts and Outriggers are putting into the revitalization of Oahu is paying off. Hotel occupancies on Oahu are above those on all the other islands this year.

Camilla Aluli, director, Hawaii, Mark Travel Corp.: Sometimes the airport process can be daunting and that may discourage people from traveling interisland to the degree that they used to.

Kiesnoski:How much tourism can Hawaii take? Will you have to cap growth and concentrate on increasing visitor spending?

Johnson: Obviously the strategy is a larger spend for visitors. That doesnt necessarily mean we only want the rich and famous. It means we want people who will come and enjoy all the things we have. How much is too much? We have to be very careful. If were going to sell a higher-end product, then we must keep it in great shape.

We are having discussions about sustainable tourism. And we have to be very careful that the whole Hawaiian community is involved with tourism. But we dont expect to receive a tremendous amount of growth in the foreseeable future.

Wienert: Our cruise industry has increased dramatically over the past few years and will increase again in 2006.

If you look at the visitor numbers for last year, you can attribute 300,000 to our cruise visitors. At the end of 2006, well have had -- in addition to what growth we would have had anyway -- at least 400,000 additional arrivals because of cruise.

Nulty: Our challenge as an airline is to attract customers to come here when its not peak season. All of us are using the Internet a lot to attract people -- or company meetings and conferences -- with special pricing when they might not be thinking about us.

Kiesnoski:You mentioned the Web. Has Hawaii kept in step with other destinations in seeing a lot of business move direct and online and away from traditional travel agencies?

Solomon: Both consumers and travel agents are going online for information. We regularly survey our travel agents and, interestingly, they say they prefer to receive information online. Our partners on the distribution side, such as Mark Travel, tell us that more and more of their own agent business is coming online. 

Consumers are going to choose to transact however they want. We have to be out there in front of them with options and content. Were all distributed by agents, and since the values in the content, its all about keeping agents a little better informed than their clients can be.

Nulty: Having run Navigant, one of the biggest agencies in the world, for 10 years, I can tell you Im a firm believer in the value of travel agents.

The interesting part is that smart agents are using all tools at their disposal, including tools designed to bring consumers direct. They use them to go out and sell to customers. If theyre just order-takers, theyre likely not in business anymore.

Kiesnoski:In terms of product and experience, is Hawaii reacting or creating? Im thinking of the proliferation of spas at many Caribbean resorts. Are your companies leading the way or just keeping pace?

Wienert: All of the above! If you want to talk about the Caribbean trying to gain recognition as a spa destination, theyre behind the times. We went there many years ago, and I doubt it there is a property in all of Hawaii, especially luxury or upscale, that doesnt have a spa or hasnt had one for a very long time.

Talwar: I think all destinations do the same research and go after the same clients, so we share a lot of trends. But Hawaii has done a lot of introspection.

One of the big reasons we hold a [leading] position is our people. Were looking at how to manage the destination and protect its allure, and that goes right to the people of Hawaii. Thats become top of mind with everyone.

Kiesnoski:Many people come to Hawaii to experience traditions such as luaus and hula, but encounter packaged, mass-market product. How much of authentic, historic Hawaii is left to sell?

Solomon: Consumers are changing, and people are more open to new experiences. Every one of us defines whats an authentic cultural experience differently. In Hawaii, we have a very multicultural environment. Its not something easy to advertise or something we sell in particular.

But people who have been here more than once understand Hawaii is ethnic-food heaven, whether its because the sushi tastes better or theyve found an exotic dish -- such as malasadas, or Portuguese doughnuts -- that theyve never seen before.

So experiencing authentic Hawaii is not necessarily about going up some lonely trail and being invited into a thatched hut for dinner. There are so many different ways to experience what we have here. Thats what makes Hawaii magical.

Nulty: Aloha gets a lot of letters, particularly about our flight attendants, who are for the most part native Hawaiians. Travelers are so impressed with Hawaiians service culture. I see the same incredible service in Hawaiis hotels and restaurants from local people who absolutely love being involved with tourists.

Tatum: Another thing that makes Hawaii unique is that weve got people who worked in our hotels for years who stay and make the hotels their homes. At the Waikiki Beach Marriott, 50% have been here more than 10 years. Thats phenomenal.

Johnson: When you boil it all down, its not about sticks and bricks, but about the Hawaiian people. And the community needs to be a part of this industry.

Aluli: Over the last few years, local people have found a way to become engaged by creating their own businesses.

Theres been a plethora of new things to do that are small and not as commercialized as, for example, some of the [resort] luaus. They really put visitors in touch with locals.

Kiesnoski:Whats the relationship between the ethnic Hawaiian population and the tourism industry? Have the Hawaiians benefitted from this tourism boom?

Johnson: No, I dont believe the host community has benefitted to the same extent as many other groups that have come here. Its one of the things that needs to be put more in balance.

Wienert: There are so many new opportunities for Hawaiian people to get involved with the industry.

Its a lot different than how it was years ago. There is now a concerted effort industrywide to reach out [to the host community] and talk about these new opportunities.

Johnson: And if we dont do something like that, well lose the essence of Hawaii. There is no other place that has aloha. If you dont involve them, how can you sell Hawaii? You really cant. They have to be involved.

Talwar: The state has put together a strategic plan, and one of the key points is this very subject. Its something the state is taking a leadership role on.

Aluli: One area where the state has done an excellent job is supporting festivals, venues where a lot of locals are represented.

Kiesnoski:Whats the greatest challenge or opportunity facing the tourism industry today?

Solomon: About 70% of our visitors are repeat. At that level of repeat business, you have to think about where your next generation of consumers is going to come from. We have to keep the product fresh and talk about whats coming down the road to new and different markets. Thats our biggest strategic challenge: awareness and connecting with new markets.

Tatum: We need make sure that with all the business coming in, we dont forget to invest more money to keep more business coming and to keep perception of the Hawaii brand at the level we want, and not just in the luxury category.

One of our strengths is that even our midlevel and lower-priced tiers are excellent.

Kiesnoski:Is a Hawaii vacation still an achievable and affordable dream?

Johnson: There is a luxury component to the Hawaii product, but we have a whole range. I was in Philadelphia last week, and I couldnt believe what I was paying for a hotel room.

Nulty: With no beach!

Wienert: Theres opportunity for every pocketbook. Were very value-oriented.

Talwar: Its all about experiences anyway. Visitors want to go home and talk about boogie-boarding with locals at Waikiki. You can do that at all different price points.

Aluli: Another challenge is infrastructure. Tourism product may be beautiful, but in the long term, roads, water supplies and those sorts of things are what we should pay attention to.

Wienert: The state strategic plan for tourism identified a lot of critical issues, and infrastructure was a very large part of that.

Johnson: Visitors are only 10% of Oahus population. Its not the tourists who are going to goof up the local infrastructure.

Aluli: Its the legislature!

Wienert: On Maui and Kauai, the ratio of visitors to residents is very high, around 1-to-3. Each island faces different challenges, whether it be infrastructure or resource management. 

Johnson: Honolulu is a growing metropolitan center. From a resource standpoint, are we looking at hurting for water? No.

A little less traffic would be nice, but the issue is not visitor numbers.

Wienert: Traffic is a concern, but when you look at car registrations, we really havent increased rental cars. But resident vehicle ownership is up dramatically.

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