Categorized | Business

Visitor expenditures, arrivals down for second month


October 2013 was the second month that total visitor expenditures (-2.6% to $1.1 billion[1]) and visitor arrivals (-1.6% to 636,245 visitors) to Hawaii were less than the previous year, according to preliminary statistics released by the Hawaii Tourism Authority.

Hawaii has witnessed slower growth in visitor arrivals since July 2013. The average daily visitor spending for October 2013 was down 1.5 percent to $195 per person.

For the first 10 months of 2013, total visitor expenditures (+3.4% to $12.1 billion) and arrivals (+3.9% to 6,893,038 visitors) remained ahead of year-to-date 2012.

Expenditures by U.S. West visitors for the month of October 2013 fell 7 percent to $350.8 million, as a result of decreases in arrivals (-8% to 234,274 visitors) and daily spending (-1.1% to $155 per person). U.S. East arrivals dropped 3.8 percent to 112,807 visitors and U.S. East visitor expenditures totaled $236.7 million, down 2.2 percent compared to October 2012.

Japanese arrivals rose 9.4 percent to 139,025 visitors in October 2013. However, lower daily spending (-10.5% to $293 per person) resulted in a 2.3 percent decline in Japanese visitor expenditures to $232.4 million. Canadian visitor expenditures grew 1.3 percent to $59.4 million, boosted by a 4.8 percent growth in arrivals (to 29,957 visitors).

Arrivals from All Other markets were up 4.8 percent to 95,434 visitors, with significantly more visitors from Oceania (+27.1%) and a 9.6 percent growth from Europe. Arrivals from Other Asia (-0.9%) were comparable to last October.

Combined expenditures from All Other visitors grew 4.1 percent to $205.2 million. Arrivals by cruise ships decreased 11.4 percent from October 2012 to 24,748 visitors.

Among the islands, visitor expenditures in October 2013 declined on Oahu (-10.2%) but rose on Kauai (+15.4%), Hawaii Island (+11.7%) and Maui (+1.1%).

There were 851,205 total air seats to Hawaii in October 2013, up 1.3 percent compared to 2012. Growth in scheduled seats from Oceania (+54.5%), Other Asia (+20.8%) and Japan (+12.3%) offset declines from U.S. West (-4.8%) and U.S. East (-8.7%).

Year-to-Date 2013:

Expenditures by U.S. West (+5.8% to $4 billion), U.S. East (+5.9% to $3 billion) and Canadian (+1.7% to $806.3 million) visitors increased, but expenditures by Japanese visitors declined (-7.8% to $2.1 billion). Arrivals from U.S. West (+3.3%), U.S. East (+1.1%), Japan (+3.9%) and Canada (+3.1%) showed moderate growth, while arrivals from Oceania (+29.9%), Other Asia (+21%), Europe (+10.5%) and Latin America (+21.4%) were much higher compared to year-to-date 2012.

Maui (+8.7% to $3.1 billion; +3% to 1,973,976 visitors), Hawaii Island (+16.7% to $1.6 billion; +3.2% to 1,222,831 visitors) and Kauai (+14.6% to $1.2 billion; +4.1% to 941,307 visitors) showed growth in visitor expenditures and arrivals compared to the first 10 months of 2012. Visitor expenditures on Oahu dropped (-3.6% to $6.1 billion) despite increased arrivals (+5.4% to 4,281,747 visitors), which was offset by lower daily spending and shorter length of stay.

Other Highlights:

* The drop in U.S. West arrivals in October 2013 (-8%) corresponded with the decrease in scheduled air seats for this market. Arrivals from the Pacific and Mountain regions fell 9.5 percent and 3.1 percent, respectively. There were fewer visitors from California (-10.9%), particularly from the San Francisco metropolitan area (-12.7%), the Los Angeles metropolitan area (-9.9%), and San Diego (-9.1%). Arrivals from Washington (-6.3%) and Arizona (-6.5%) also declined. The first 10 months of 2013 showed growth in arrivals from the Pacific (+1.9%) and Mountain (+5.6%) regions compared to year-to-date 2012.

* Arrivals from U.S. East fell 3.8 percent from October 2012 with decreases from all U.S. East regions. South Atlantic and East North Central, the two largest regions, dropped 8.1 percent and 2.1 percent, respectively. For the first 10 months of 2013, arrivals increased from the Mid-Atlantic (+8%) and New England (+4.6%) regions, but declined from West South Central (-3%), East South Central (-2.8%) and East North Central (-1.2%) regions.

* Arrivals from Australia rose 21 percent to 28,511 visitors in October 2013 and arrivals from New Zealand climbed 84.4 percent to 4,627 visitors. For the first 10 months of 2013, arrivals from Australia rose 25 percent while arrivals from New Zealand jumped 75 percent compared to year-to-date 2012.

* Arrivals from Korea fell 13.2 percent to 12,721 visitors in October 2013, after 16 months of consecutive growth. Arrivals from China dropped 7.4 percent compared to October 2012, to 10,307 visitors. Supported by new service, there were four times more visitors from Taiwan in October 2013 (3,052 visitors from 674) compared to a year ago. Year-to-date, 2013 showed large gains in visitors from Korea (+17.8%), China (+13.4%) and Taiwan (+198.1%) compared to the same period last year.

* The total number of visitors who came for meetings, conventions and incentives (MCI) decreased 30.8 percent to 26,701 visitors. Convention visitors declined 43.4 percent with losses mainly from U.S. West and U.S. East. Convention activities in October 2013 were moderate, compared to October 2012 which included an event with 4,000 delegates. Fewer visitors also came for corporate meetings (-9.8%) and traveled on incentives (-3.3%). For the first 10 months of 2013, total MCI visitors increased 9.7 percent to 393,231 visitors, as growth in incentive visitors (+48.6%) compensated for fewer corporate meeting (-6.8%) and convention (-1.8%) visitors.

* Daily spending by Japanese visitors has been lower in nine out of 10 months compared to 2012. For the first 10 months of 2013, daily spending on shopping by Japanese visitors declined 19 percent (to $77 per person). Spending on lodging (-5.4% to $104), entertainment and recreation (-5.6% to $19) were also down compared to year-to-date 2012.

* Among U.S. East visitors, condominium usage (+5.8% to 17,404) increased but fewer stayed in hotels (-7.7% to 69,768) and timeshare (-5.5% to 12,877) compared to October 2012. More Japanese visitors also stayed in condominium properties (+20.1% to 10,842) compared to last October.

Island Highlights for October 2013:

Oahu: Total arrivals to Oahu rose 2.2 percent from October 2012 to 399,147 visitors. However, lower daily spending (-8.1% to $213 per person) and a shorter length of stay (-4.4% to 6.53 days) resulted in a 10.2 percent decrease in total visitor expenditures to $555.5 million. There were more visitors to Oahu from Japan (+9.4%), Canada (+10.9%), Australia (+23.3%), New Zealand (+79.1%) and Europe (+16%), but fewer visitors from U.S. West (-8.1%), U.S. East (-3.4%), Korea (-13.1%) and China (-6.3%) compared to October 2012.

Kauai: Arrivals to Kauai also increased by 2.2 percent to 86,260 visitors in October 2013. Higher daily spending (+9.8% to $178 per person) and a longer length of stay (+2.9% to 7.40 days) contributed to a 15.4 percent growth in total visitor expenditures to $113.4 million. There were more visitors to Kauai from U.S. East (+3.7%) and Canada (+11.9%) but fewer visitors from Japan (-19.4%).

Maui: Despite a drop in arrivals to Maui (-2.6% to 173,790 visitors), higher daily spending (+1.5% to $184 per person) and a longer length of stay (+2.3% to 8.20 days) contributed to a 1.1 percent growth in total visitor expenditures to $262.9 million. There were more visitors from Japan (+35.6%), Australia (+22.2%) and Canada (+1.5%) but fewer from U.S. West (-9.9%) and U.S. East (-3.1%).

Hawaii Island: Similar to Maui, arrivals to Hawaii Island declined compared to October 2012 (-8.1% to 104,194 visitors). However, much higher daily spending (+14.6% to $186 per person) and a longer average length of stay (+6.1% to 7.37 days) bolstered total visitor expenditures (+11.7%) to $143.0 million. There were fewer visitors to Hawaii Island from U.S. West (-9.7%), U.S. East (-6%), Japan (-14.6%) and Canada (-8.2%) compared to October 2012.

Air Seats to Hawaii:

* There were a total of 851,205 air seats to the state in October 2013, up 1.3 percent from a year ago. Total air seats increased for Honolulu (+4.6% to 631,823) and Hilo (+2.8% to 3,388) but declined for Kahului (-7.1% to 126,546), Lihue (-7.5% to 42,850) and Kona (-7.6% to 46,598).

* The number of scheduled air seats rose 1 percent from October 2012 to 843,432 seats. Domestic charter seats declined 5.6 percent due to fewer seats out of Las Vegas. International charter seats tripled from October 2012 to 3,081 seats with a number of extra flights from Japan and Seoul and one from Pago Pago.

* Scheduled air seats from U.S. West declined 4.8 percent compared to last October. Increased service from Anchorage, Bellingham, Denver, Portland and San Francisco were offset by discontinued service from Fresno and reduced service from Las Vegas, Los Angeles, Oakland, Phoenix, Sacramento and San Jose.

* Seats from U.S. East dropped 8.7 percent from October 2012. Flights out of Washington D.C. were reduced to once a week in October 2013 compared to daily flights last October. There were also fewer seats from New York JFK and Dallas, which were partially offset by increased service from Chicago, Houston and Newark.

* Scheduled seats out of Japan increased 12.3 percent, boosted by new service from Sapporo as of Oct. 2012, in addition to increased service from Nagoya, Osaka, Fukuoka and Narita.

* Scheduled seats out of Canada in October 2013 rose 3.3 percent due to more seats from Vancouver and added service from Calgary.

* Oceania air seats climbed 54.5 percent, boosted by a tripling of seats from Auckland. In addition, routes from Brisbane and Melbourne, which started at the end of 2012, and increased service from Sydney contributed to the growth in air seats from Australia.

* Scheduled seats from Other Asia rose 20.8 percent from October 2012. Air seat capacity out of Shanghai increased 53.4 percent (to 3,696). There were 6,585 new seats out of Taiwan from October 2013. In contrast, reduced service by Korean Airlines caused a decline in scheduled seats from Seoul (-1.6% to 32,344).

* For the first 10 months of 2013, total air seats grew 6.3 percent, with increased seats to Honolulu (+8%), Kahului (+4.3%) and Lihue (+3.5%) offsetting fewer seats from Hilo (-18.6%) and Kona (-2.1%). There were significantly more scheduled seats from Oceania (+49.2%) and Other Asia (+21.7%) compared to the first 10 months of 2012. Scheduled seats from U.S. East (+10.5%), Japan (+7.7%) and U.S. West (+3%) also increased, while the number of seats from Canada were about the same as year-to-date 2012.

Cruise Ship Visitors

* A total of 33,277 visitors came by cruise ship or by air to board cruise ships in October 2013, down 9 percent while total cruise visitor days fell 5.7 percent compared to October 2012. The average length of stay by all cruise visitors was 6.82 days.

* In October 2013, 24,748 visitors entered the islands by cruise ships, down 11.4 percent. One less cruise ship came in October 2013 compared to a year ago and several of the cruise ships that came in October 2013 had smaller passenger capacity. However, for the first 10 months of 2013, arrivals by cruise ships continued to surpass last year (+6.6 to 138,974 visitors).

* The Hawaii home-ported cruise ship was in dry dock in April 2013 for routine maintenance and contributed to the 4.4 percent decline in cruise visitors who came by air during the first 10 months of 2013. Total visitors who came by cruise ship or by air to board cruise ships was up 1.8 percent compared to year-to-date 2012.

Statement from Mike McCartney, HTA President and CEO

With visitor expenditures surpassing $12 billion during the first ten months of the year, tourism has contributed $1.26 billion in tax revenue for the state, an increase of 3.4 percent compared to last year.

However, while we anticipate exceeding visitor arrival and spending records reached in 2012, the declines experienced in September and October are expected to continue through the remainder of this year and into 2014.

Hawaii Island leads the state with the largest increase in total expenditures during the first ten months of 2013 (+16.7% to $1,587.7 mil.). This increase helped to offset the effects of decreased air seats to the island at its two airports – Hilo (-18.6% to 40,777) and Kona (-2.1% to 508,150).

Visitors have become more conscientious of their spending as the cost of a Hawaii vacation continues to rise. This trend has caused a shortening in the average length of stay. Currency exchange rates and competitive pricing are also affecting visitor arrivals and spending and may contribute to continued declines and potentially move market share to competing destinations.

As airlines adjust their flights and routes to match demand, we are seeing declines in seat inventory from the U.S. mainland. While there has been steady growth in air seats from international destinations through our efforts to diversify our markets, we are monitoring how domestic market declines and trends could impact all markets.

We continue to work with our marketing contractors in adjusting our plans and initiatives through 2014. As we prepare for a potential downturn in Hawaii’s tourism economy, we continue to focus on driving demand from growing international markets to bolster a softening domestic market and maintain a sustainable tourism economy.

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