Hawaii Tourism Arrivals Expected to Increase, While Inflation-Adjusted Spending Remains Stagnant

Feb. 09–Hawaii visitor arrivals and spending are expected to grow over the next four years.

But the main question asked Thursday by some of the state’s top visitor industry experts and economists was, “Will the increases actually bring real gains or simply consume more resources?”

Speakers at the Pacific Asia Travel Association’s annual outlook and economic forecast forum tried to evaluate how much of a boon for Hawaii the latest forecast from the state Department of Business, Economic Development and Tourism (DBEDT) would be.

State Economist Eugene Tian said DBEDT expects arrivals to Hawaii will increase 2.7 percent in 2018 and that spending will grow 4.5 percent. DBEDT anticipates visitor arrivals will continue growing 1.6 percent for 2019 and 1.4 percent for 2020 and 2021. The agency forecast visitor spending will increase 3.7 percent in 2019 and post 3.5 percent gains in 2020 and 2021.

But once the spending is adjusted for inflation or other economic factors, “we are pretty much flat in the last few years,” Tian said.

As Paul Brewbaker, principal of TZ Economics, put it, Hawaii has millions more visitors coming, but “we don’t make any more money” than in the 1950s to 1980s, when tourism was the dominant engine of economic growth across the isles.

Brewbaker said the good old days are gone thanks to political policies that have constrained growth and long-term declines in visitor outlays.

As a result, the state has seen more residents complaining about tourism and more lawmakers trying to identify ways to offset negative impacts like overtaxed infrastructure and overused beaches and trails. They’re also trying to figure out what to do about the sprawl of vacation rentals into nonresort communities across the state.

“When I was born the average tourist spent $5,000 while they were in Hawaii; in 2017, today, it’s $1,800,” Brewbaker said. “E komo mai, we love the buggahs, but we wish we could get more of their money. Everything has gotten better, cheaper, faster.”

But visitors don’t necessarily feel that way when hotel constraints have caused rates to rise dramatically, said Toni Marie Davis, executive director of the Activities & Attractions Association (A3H). Higher airline fares and the increase in repeat visitors to Hawaii, who have “been there, done that and are aging,” also have created challenges for Hawaii’s activities and attractions, Davis said.

“More visitors does not mean more spending,” she said. “We’ve found that there’s less and less money for people to do things while they are here.”

Scott Maroney, Crazy Shirts president and co-owner, representing Retail Merchants of Hawaii, said retailers also are battling fiercely for dollars.

Still, Maroney said, “there is money here, and we expect 2018 will be a good retail year.”

Hawaii’s retail giant continues to be Waikiki, which caused more than half of the $16 billion in statewide visitor spending to occur on Oahu, Maroney said. It’s a hot luxury market, as evidenced by Tiffany & Co.’s decision to build a major project at the Royal Hawaiian Center, he said.

But Maroney said retailers are seeing opportunities on the neighbor islands, which are becoming a focus for a lot of merchants.

“The top Crazy Shirts (store) isn’t in Waikiki; it’s in Whalers Village in Kaanapali, Maui.”

Source: FS – Hotel blogs
Hawaii Tourism Arrivals Expected to Increase, While Inflation-Adjusted Spending Remains Stagnant