InsightFollowing a decrease in business from the U.S. mainland during the second half of 2013, Aloha State tourism officials lowered their domestic visitor arrivals and spending expectations for 2014 at the Hawaii Tourism Authority’s (HTA) annual Spring Marketing Update, held last week at the Hawaii Convention Center in Honolulu.

The HTA is now targeting just under 3.2 million 2014 arrivals from its largest source market, U.S. states west of the Rockies, a total that is essentially flat year over year but down 2.4% from earlier projections.

Total spending by U.S. West visitors is expected to reach $4.7 billion, up 1.4% from 2013’s year-end figure but off 4.2% from the HTA’s previous estimate.

Hawaii officials also downgraded their arrivals expectations for U.S. states east of the Rockies, lowering targeted visitor totals from its second-largest source market by 4% to just under 1.7 million, a figure on par with 2013’s total. The HTA is forecasting U.S. East spending will reach $3.6 billion, up 1.3% year over year but down 6.6% from earlier goals. ShaneNelson

David Uchiyama, the HTA’s vice president of brand management, indicated in a morning presentation that the U.S. is the only market his organization expects to be flat in 2014.

An increase in international arrivals will, in fact, propel Hawaii to all-time highs of more than 8.4 million total visitor arrivals and over $15 billion in overall spending in 2014, according to the HTA’s latest estimates.

But Uchiyama made it clear that continued price increases for hotels and airlift and lower pricing from competing destinations will likely hurt the U.S. market.

“We’re losing that bottom tier of visitors that come to us, which in some cases may not be a bad thing,” Uchiyama said of U.S. visitors. “But if we start to see too much of that bottom deteriorate and go to other markets, we’re going to start to be in trouble because that affects load factors on the airlines, and then we lose the flights, and then we don’t have the seats to fill the hotels. So it’s a vicious cycle going forward.”

Later in the session, executives from the Hawaii Visitors and Convention Bureau (HVCB), the HTA’s North American marketing partner, said Hawaii is enjoying high interest from potential U.S. visitors. HVCB officials said 27% of leisure air travelers polled in a Q4 2013 study said they were extremely or very likely to visit Hawaii in the next 24 months.

“This is a record for Hawaii,” said Chris Kam, the HVCB’s senior director of market insight. But he said that although “for travelers from the U.S. West, Hawaii is really the preferred destination for nearly every category that we measured, the one category where we fall behind the Caribbean and Mexico is good value for the money. And when you shift the lens to the U.S. East market, once again we beat out Mexico and the Caribbean in every category except for good value for the money.”

Kam said a lack of understanding about the Hawaiian Islands among many potential U.S. visitors was responsible for the “weak perceived value of a Hawaii vacation,” but he described that information gap as an opportunity moving forward.

“We see this opportunity to emphasize the unique sites and activities of Hawaii with the iconic images, unexpected events and the diversity of all the Hawaiian Islands as a way to increase visitation out here among first-timers and repeat visitors,” he explained.

Before unveiling specifics about the 2014 North American marketing campaign, HVCB President and CEO John Monahan built on Kam’s value comments, saying that “our major focus throughout all of our marketing efforts this year is to sell the great value of experience in a Hawaii vacation despite the high cost against some of our competitors.”

That push was prominent during a February media blitz in Chicago, a location the HVCB determined was a “need market” last year, and a new March media blitz is already under way in San Francisco, aimed at increasing business from the key West Coast gateway.

“With this most recent downturn, San Francisco has really raised its head as probably being our worst market right now,” Monahan said.

For a look at the major market presentations from the HTA’s spring update, click here.

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