# Hawaii slowdown



## Steamboat Bill (Jun 15, 2008)

I just spent a week on the Big Island and I am now in Maui.

When I was on the rental car shuttle at the airport, the driver told me that business is down 50% this year as compared to last year. 

There were ZERO crowds on the big island last week and we could easily walk into any restaurant and get a table.

I wonder if the current economic slowdown, high fuel prices, and high airfare will have an impact on Hawaii timeshare sales.

This may be a great year for traders.


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## tompalm (Jun 15, 2008)

Things are slow right now and should pick up in a couple weeks.  However, this summer will be a lot slower than the past years.  You will not see cheaper prices on anything right now except real estate.  It will probably be easier to get a TS exchange in the future, and later on, you might be able to find some cheap deals on buying TSs.  However, if the price of oil stays high, the vacation will cost more, living here will cost more and there is no good news.  Except, you are right, this may be a good year for traders.


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## Kauai Kid (Jun 15, 2008)

Steamboat Bill said:


> I just spent a week on the Big Island and I am now in Maui.
> 
> When I was on the rental car shuttle at the airport, the driver told me that business is down 50% this year as compared to last year.
> 
> ...




Check out Holiday Groups web site.  You can get a Hawaii TS for less than $1K.  Lotsa supply Little Demand =lower prices

Sterling


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## KristinB (Jun 15, 2008)

When we were on the Big Island in May, we could tell that folks there are *really* worried that this is more than just a minor blip, that this could be a major downturn.  Of course the Big Island has the VOG to contend with as an issue, too, not just the economy and fuel prices, so maybe that's why...


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## Kenrabs (Jun 15, 2008)

I just recently got an exchange for Kona Coast II for July09 to go with my week in Kauii. I decided to deposit and go for another week to take advantage of the travel panic, and feel confident now it will come through. If I'm going to have to pay high airfare I might as well get the most out of it.


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## capjak (Jun 15, 2008)

Well all the plus side this will make going to Hawaii via rental/exchange easier for everyone so this is a opprotunity to buy a Hawaii TS cheaply or a "trader".  I have faith that this will turn around, it may take several years but it will move back the other direction


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## tombo (Jun 15, 2008)

Every article I have read says that this is not a bump in the road, high air fares are here to stay, and we haven't reached the peak air fares yet. One article said that we are headed back to how it was in the 60's when only the wealthiest were able to afford to fly. The article said that air fares are going to separate the wealthiest people from the average Joe's in a way that hasn't been seen in decades.

Rather than riding it out and hoping all the "experts are wrong", I think it is time to get out while there are a few optimists left to buy our overseas weeks. As more and more people try to sell, and less and less people are willing to buy, many weeks will be dumped on the HOA. Who will pay the costs that those non-paying weeks used to pay? It will be paid in the form of higher MF's and assessments by the remaining owners. The people who still own but can't afford to fly will rent their weeks for any price they can get. Rental weeks at Marriott's in Hawaai and Aruba have been going for less than $1000 on e-bay, and many don't even receive a bid. A recent Marriott Aruba rented for $500. This means that people are already desperate enough to rent their weeks for less than their MF's. What is the advantage of owning weeks at a place that you can rent for less than the MF's? Even if you can afford to fly to these locations, it will be cheaper to rent and real easy to trade in to. 

This is a sobering article I borrowed from Bill927. This article was written in May and things have gotten much worse since then. 
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/05/22/financial/f150037D79.DTL

Another article from Delta's CEO specifically talking about Vegas and Hawaii taking big hits:
http://www.ajc.com/business/content...08/06/12/delta_0613.html?loc=interstitialskip


As I said on another thread, the great traders on the mainland that we used to buy so we could trade in to Hawaii and the Caribbean are quickly becoming the locations everyone hopes to trade in to. Many of those great mainland traders will be used by owners so they will become harder to get. The poor traders will soon become anywhere you have to fly to. JMHO


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## MOXJO7282 (Jun 15, 2008)

tombo said:


> Rental weeks at Marriott's in Hawaai and Aruba have been going for less than $1000 on e-bay, and many don't even receive a bid. A recent Marriott Aruba rented for $500. This means that people are already desperate enough to rent their weeks for less than their MF's. What is the advantage of owning weeks at a place that you can rent for less than the MF's? Even if you can afford to fly to these locations, it will be cheaper to rent and real easy to trade in to.



Although I agree next year (2009) will be a challenge to acheive the rental fee I have in the past, ebay is not a good indicator to determine what the average rental will be.  The same Maui unit I've rented for X, would get me X minus $1000 on ebay. I track  Marriott Maui and Marriott Aruba Surf Club rentals, and all the ones that I saw rent really low on ebay were really short notice rentals. 

I do have a feeling things will get tough and I'll get $1000 less for my Maui and Aruba this year and maybe for a few years, but it should still be 1.5 x my MF. And I think at some point things will return to normal, so I'm not one of those that think the "sky is falling"

I know  I rented my MOW plat+ week for the same as I've always have, although there were less inquiries and it took longer. I'm definitely concerned, but I don't believe I'm be renting for less than 1.5x MF. Redweek to me is the best, and I still see decent activity there.

Regards.
Joe


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## Jim Bryan (Jun 16, 2008)

****As I said on another thread, the great traders on the mainland that we used to buy so we could trade in to Hawaii and the Caribbean are quickly becoming the locations everyone hopes to trade in to. Many of those great mainland traders will be used by owners so they will become harder to get. The poor traders will soon become anywhere you have to fly to. JMHO****

--------------------------------------------------------------------------------



Florida Coast could be a tough place to find for a while.


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## tombo (Jun 16, 2008)

Joe, I hope you are right and things get better in the future, but it looks really bad right now. Marriott Aruba Surf Club has 295 rental listings on Red week, and many weeks that have rented recently were listed for about $700 for a week in a studio, and $1250 for 2 bed room 2 baths. I don't believe that those prices do anything but cover the MF's, if they even do that. 

I have also rented out many of my weeks on red week, and I know from experience that if there are 2 or more weeks for rent on the same date with same #beds/baths, the lowest priced units will rent first. Then the next people that call you can look on red week at the sold listing price and will want you to rent for the same price or they feel that they are getting ripped off. I have had to lower my prices many times because people list their weeks at a lower price than I listed mine for. Of course I could stick to my price, but as it remains unrented and the check-in date gets closer, my odds of renting it decreases. I have little doubt that most of the weeks for rent on e-bay for last minute rentals were listed for months on red week and the owner was simply trying to get something for the week before all was lost. Rarely is E-bay someone's first choice for renting their week, it is a last minute desperate attempt to receive some income before the week is totally lost. I also know that when red week shows that the week rented for $1249, that may or may not be the case, because often prices are cut to rent the week after a renter calls and offers you a lower price. With 295 rentals and few calls people will get scared and lower their asking prices. Increased supply with lower demand equals lower prices.

Next year's rentals will be harder for all timeshares in my opinion, not just the ones that require air fares. I have seen it on my mainland timeshares this year. I am getting fewer calls and people are waiting till last minute to decide after they see what gas prices are and how the economy is doing. The difference is that I can drive to my unrented mainland units to stay for a couple of days if it doesn't rent, so it won't be a total loss. 

If I sell my overseas weeks and American's travel habits don't change drastically long term because of air fares I will kick myself. If the air fares keep rising and less and less people travel to the Islands I will be glad I sold. It is a gamble either way but I can live without my Island weeks even if they stay valuable and popular because I can still trade in to them or rent. However I can't live with them if I can't afford to fly there and I can't rent them either. 

I honestly do hope you are right and long term the travel returns to the levels we have enjoyed for decades because I love my 2 remaining Island Timeshares and haven't sold them yet. If air fares stabilize and come down before I sell I will be happy to have been wrong and still be an owner.

Tom


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## BocaBum99 (Jun 16, 2008)

Things are NEVER as good as they seem when they are good.  And, they are NEVER as bad as they seem when they are bad.

Things are pretty bad right now due to the housing downturn and the oil shock we are experiencing.  Once our economy stabilizes itself from these two economic quagmires, people should resume travel to the islands.  My guess is travel will reach an equilibrium based on the average cost of airfare.  If airfares stay high due to higher oil prices, then there will be reduced passenger arrivals to Hawaii.  But, it won't be a total meltdown.  Just a temporary blip until things settle down.  My guess is it will probably take another year unless the Federal government does something to create yet another shock to destabilize the economy more.  They have been known to do that at times.


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## Malibu Sky (Jun 16, 2008)

With airfare at $800+, I am not surprised things are slow...we are going elsewhere this year...not sure where yet but $3200 to just get to Hawaii...ouch!!


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## Steamboat Bill (Jun 16, 2008)

Malibu Sky said:


> With airfare at $800+, I am not surprised things are slow...we are going elsewhere this year...not sure where yet but $3200 to just get to Hawaii...ouch!!



It is about $1200 from the east coast this year.


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## skifast (Jun 16, 2008)

This scares me as well, but we just booked our airfare for next March.  Our airfare was $1072 (from ORD), versus $978 4 years ago.  Is that a lot of money?  Yes.  Is the increase terrible? No, it was actually much less than I expected.  Plus, based on our purchase date, we are not getting nailed for luggage. 
I also believe things will get better, and the Islands will always be a draw - but maybe people will not travel to the Islands as much.


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## tombo (Jun 17, 2008)

Not only are the air fares going to hurt everyone's travel budget, the cost of everything on the islands will get even more expensive making it more costly than ever to spend a week or more . The islands (especially Hawaii) always had higher costs on everything from gas to food since they produce almost nothing there and have to ship or fly it in from the mainland. With the high cost of fuel, the transportation costs of everything from meat, milk, eggs, fuel, etc will go up even more. Meals at Restaurants and even eating in the room will be much more expensive. This will hurt tourists and locals alike. The locals will of course need cost of living increases in order to keep working at the resorts so they can clean the rooms, upkeep the resort,maintain the grounds, and of course the electricity on the Islands will get even more expensive, all of which will have to be absorbed by the owners in the form of higher MF's making even your lodging more expensive. The high cost of oil will be most visible in increased air fares, but it will be felt in almost everything you do while you are on the Island.


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## Kevin (Jun 17, 2008)

My brother has a limo / tourist transportaion company in Honolulu and my nephew works for a Cadillac / Hummer dealership! 

Both say that business is very slow in comparison to previous years.   Local & tourist overall spending is down because of higher oil prices, housing crisis etc., just like most other parts of the country.  

Let's hope for a change soon!


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## T_R_Oglodyte (Jun 17, 2008)

tombo said:


> Every article I have read says that this is not a bump in the road, high air fares are here to stay, and we haven't reached the peak air fares yet. One article said that we are headed back to how it was in the 60's when only the wealthiest were able to afford to fly. The article said that air fares are going to separate the wealthiest people from the average Joe's in a way that hasn't been seen in decades.



I remember that back in the early every article I read said that oil shortages were not a bump, high energy prices were here to stay, and that prices hadn't yet peaked.  Experts uniformly agreed that oil prices would reach $100/barrel by no later than 1980, and that was only a temporary price barrier.

Before that experts were telling us that we had entered a period of permanent food shortage and scarcity, grain shortages were not temporary and were here to stay, and the problems were going to get worse.

I could go on and on ....

All of these predictions are made the same experts who have correctly predicted 13 of the last 4 recessions.  If you keep predicting disaster often enough, pretty soon you're bound to get one right just by luck and then you, too, can become a certified prognosticator.

==========

I believe that what happens with energy prices now is going to be very similar with what happened with energy prices thirty-five years ago. 

In the short term, demand for energy is relatively inelastic so prices will go up and shortages will appear.  Over a five to ten year period, however, people and businesses will find ways to get by with less energy as a way to reduce costs.

The clients I work for always have a large collection of possible energy savings projects that are awaiting funding.  Two years ago the return on capital wasn't large enough to justify the projects.  With higher energy prices, the returns on capital are now attractive and the projects are proceeding.  

This is a short term blip. In four year prices will recede. They won't drop back down to where they were two years ago, but they will come down greatly from whatever peak is reached in the next couple of years.


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## falmouth3 (Jun 17, 2008)

I was also on BI last week.  The place was empty!  We went to dinner one night and there were 4 occupied tables at a waterfront restaurant at dinnertime.  We asked the waiter if it was unusually slow and he said that it was a slow time of year.  But we kept remarking to ourselves how nice it was to not have people around.   

I'm sure local economies everywhere are struggling.


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## Tiger (Jun 17, 2008)

Perhaps you remember discussions in the early spring or late winter about construction around Poipu.  When we were there we saw 4 or 5 major construction areas.  Two for strip malls or shopping areas and three for residential. One is the huge area behind Lawai Beach Resort.  I said then and I repeat that there are going to be some significant financial baths with all this going on at once, now accentuated by any downturn.


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## Mimi (Jun 17, 2008)

Based on the 2 tours we took at Wyndham and Shell, the developers are still selling points to some vulnerable Hawaii travelers. DH asked the Shell salesman if he wanted to buy our weeks back, since they are so valuable, and he basically said, "Nice try."


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## tombo (Jun 17, 2008)

A couple of articles showing the current slow down. If you really believe this will be a short term problem you are in luck because it is a buyers market. Many Hawaii weeks can currently be purchased for $500 or less. Buy them now and when it turns around you will be ahead of the game. If you are wrong and it gets worse, you won't be able to give weeks away for free and you will be stuck with unrentable weeks and high MF's coupled with ridiculously high air fares.

http://starbulletin.com/2008/05/28/news/story01.html

http://www.usatoday.com/travel/destinations/2008-06-10-hawaii-campaign_N.htm

http://www.bizjournals.com/pacific/stories/2008/06/02/daily19.html

http://www.bizjournals.com/pacific/stories/2008/06/16/story1.html

There is no guarantee the experts can predict how bad this will get or how long it will last any more than the experts can predict when the next earthquake will be, how long it will last, or how bad it will be. However, with plenty of advance warnings from numerous earthquake experts, it is time to worry when the ground starts shaking.


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## Steamboat Bill (Jun 17, 2008)

I just did the Maui Marriott tour today and it was moderately busy there. I will post details later. There was a lot of traffic on Hwy 30.


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## tmartin1 (Jun 18, 2008)

I'm at the Hilton Hawaiian village right now and the place is crazy. No lack of tourists here. However, I'd say 75% of them are Japanese.

I read an interesting article in the Honolulu paper a couple of days ago. They listed vacation data of the Big Island. They were comparing data from a year ago to this year. One month, March 2007 vs. March 2008 was striking. I don't remember the exact numbers, but close enough to make the point.

Number of visitors: -12% from last year
Number of U.S. visitors: -14% from last year
Number of foreign visitors: - 8% from last year

Lodging:
Hotel stays: -13% from last year
Condos: + 20% from last year
Timeshares: +2.2% from last year

Sounds like people are discovering that condos are the most economical way to go. However, in an article today, they mentioned that less people are coming, but they seem to be staying longer, which makes sense due to the high air fare. This could explain the increase in condo rentals.

Theresa


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## Steamboat Bill (Jun 18, 2008)

tmartin1 said:


> Sounds like people are discovering that condos are the most economical way to go. However, in an article today, they mentioned that less people are coming, but they seem to be staying longer, which makes sense due to the high air fare. This could explain the increase in condo rentals.



people are finally getting smarter...


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## Mimi (Jun 19, 2008)

Theresa, we are also staying in your area, Shell Marina at the Illikai. We agree there are plenty of Japanese tourists on the island of Oahu. We tried to snorkel at Hanauma Bay this morning but we were too late. The parking lot was full by 9:00 a.m. We enjoyed touring the North Shore yesterday and the rest of the island today. Looking forward to the Hilton fireworks Friday night when our daughter and grandkids arrive from the mainland! I'll try to post from Kauai, Big Island and Maui during the next 3 weeks. I know I love hearing about Tuggers activities in paradise when I am home counting down the months and weeks to our next Hawaii trip. :whoopie:


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## lprstn (Jun 19, 2008)

*I know for me this year is the last for a long time...*

I know for me I will not be able to afford the increase of about $200-400 per ticket, as I have to multiply that by 6    So I am changing my searches for 2010 (my son wanted to go to Hawaii again) and saving that big trip for his Graduation from HS present (2012).  However, I snagged lots of juicy trades for 2009 that require airfare and am wondering if I'll be able to go, or will have to give them up...


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## tmartin1 (Jun 19, 2008)

We'll be missing the fireworks on Friday. We're heading back to KoOlina today. We had a great time in Waikiki, but we're looking forward to getting back to a quieter area. The construction noise all over Waikiki is non-stop!

We had a great sunset dinner at Hula Grill last night. My daughter and her friend rented surfboards yesterday and caught a few waves.  

The weather is much nicer now that the tradewinds are back. It's sunnier and the sunset should be spectacular tonight in KoOlina. Our first few nights were rainy and/or cloudy.


Next we're heading to Kauai, then a few days on Maui. 


Theresa


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## Kauai Kid (Jun 19, 2008)

lprstn said:


> I know for me I will not be able to afford the increase of about $200-400 per ticket, as I have to multiply that by 6    So I am changing my searches for 2010 (my son wanted to go to Hawaii again) and saving that big trip for his Graduation from HS present (2012).  However, I snagged lots of juicy trades for 2009 that require airfare and am wondering if I'll be able to go, or will have to give them up...



About two weeks ago I started saving all the loose change in my pockets.  Almost $16 the first week,  $11 the second.  Two week average $13.50 times 52 weeks=$702/yr that we will never miss. 

Now I'm saving the dollar bills every day and stashing them away in the Hawaii Fund.  Don't know how much that will amount to in a years time but I'm going to Hawaii come H or High water.

Just got to convince the wife to do her fair share too.

Sterling


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## kapear (Jun 21, 2008)

In talking with a long time KBC employee today, he said volume is way down compared to the same time last year. We have had no problem getting pool chairs at any time during the day. Last minute sunset dinner reservations at Kimo's were no problem. the only crowding we experienced was trying to get a parking spot at Kapalua Bay.


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## Steamboat Bill (Jun 21, 2008)

sadly, we are leaving Hawaii tomorrow after 2 weeks...this place is aweseome


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## DaveNV (Jun 21, 2008)

Kauai Kid said:


> About two weeks ago I started saving all the loose change in my pockets.  Almost $16 the first week,  $11 the second.  Two week average $13.50 times 52 weeks=$702/yr that we will never miss.
> 
> Now I'm saving the dollar bills every day and stashing them away in the Hawaii Fund.  Don't know how much that will amount to in a years time but I'm going to Hawaii come H or High water.
> 
> ...




Sterling, here's another way to "find" money like that:  Every time you write a check from your account, when you enter it into your check register, note the odd change amount leftover between the check amount and the next even dollar amount rounded up.  Take that odd change and transfer it to a savings account.  The amount will add up fast.  

(So if the check amount is $9.24, for example, deduct the check for that amount, and record a second deduction for 76 cents.  That takes ten dollars from your available funds, but gives you 76 cents to add to your savings.  The spare change adds up very fast - I've accumulated over $30 just this month.)  

Bank of America is offering this service for free on their checking accounts under the heading "Keep The Change."  It's a pretty painless way to save extra "found" money.

Dave


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