Hawaii Faces a 'Tipping Point' in Tourism, and Southwest Airlines Could Bring Relief

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Hawaii faces a 'Tipping Point' in Tourism, and Southwest Airlines Could Bring Relief
By Jason Whitely/ News/ WFAA8/ wfaa.com

"“We definitely are concerned about managing the number of visitors we have here. We are definitely working to do that,” said Gov. David Ige, D-Hawaii.

HONOLULU — As Dallas-based Southwest Airlines ramps up its service to Hawaii with 28 daily flights by the end of May, the state is facing a problem in managing the growing number of visitors to the island who spend less money here every year.

“We’re not at a crisis point yet. We’re at a tipping point. We have so many visitors, we need to get serious about creating management programs,” said Frank Haas, a travel industry veteran who is the former marketing director at the Hawaii Tourism Authority and formerly served as an Assistant Dean at the University of Hawaii.

Haas joined James Mak, a professor emeritus at the University of Hawaii and Paul Brewbaker, a longtime economist who worked for the Bank of Hawaii, to write a nine-page white paper last month which details how Hawaii has failed to manage tourism....."

Richard

 

[jehb2]

the growing number of visitors to the island who spend less money here every year.

Well I’m certainly guilty of that. I stopped buying souvenirs and t shirts for everybody years ago.

 

[LannyPC]

the growing number of visitors to the island who spend less money here every year.

Well, they don't have to worry about me because I no longer go to Hawaii for two reasons. First, everything is so expensive there. Secondly, that's compounded by the foundering Canadian dollar.

 

[mjm1]

We enjoy visiting Hawaii every year and typically spend the same amount as always for food, both from stores and restaurants and some experiences. However, we don’t buy as many souvenirs.

If Southwest effects lower air fares for all travelers that may encourage people to spend more for other things while they are there.

Best regards.

Mike

 

[artringwald]

We go every year. We don't do luaus anymore, spend less on souvenirs and activities, but more on restaurants. We also stay longer.

 

[bnoble]

Wait, I'm confused. There are too many people spending not enough money, and new flights by a company that advertises itself as a low-cost carrier is going to fix that?

“Part of what Southwest [Airlines] brings to the party is bringing in visitors from relatively different markets – the San Jose’s of the world, where we’re more likely to get first-time visitors.”​

Newsflash: It is not a far drive from San Jose to SFO.

 

[klpca]

Well, I don't buy souvenirs anywhere and nothing that Hawaii does will change that. We consume experiences, not consumer goods. Hopefully, our value to them is that we will visit even in a down economy. We'll keep going to visit family, and because relatively speaking, it's a quick, inexpensive trip for us from the west coast. Although I have to say the the part about an additional 4,000 visitors per day gives me pause.

If they want a better life for their residents, they should start with limiting the vacation rentals located in their residential neighborhoods. I know that Kauai already has taken steps to prevent their neighborhoods from turning into defacto tourist areas. People need a place to live and raise their kids.

 

[slip]

I really think Millennials have a lot to do with the spending. There are a lot of them that will couch surf, stay with strangers or sleep on the beach. They walk or hitchhike and they don’t like to spend money on going out to eat. It’s a different kind of traveling but you see it all over and Hawaii seems to attract more of these type of vacationers than other places.

 

[PigsDad]

I really think Millennials have a lot to do with the spending. There are a lot of them that will couch surf, stay with strangers or sleep on the beach. They walk or hitchhike and they don’t like to spend money on going out to eat. It’s a different kind of traveling but you see it all over and Hawaii seems to attract more of these type of vacationers than other places.

Wait -- are you describing Millenials or hippies from the 60's. I couldn't tell...

Kurt

 

[slip]

Wait -- are you describing Millenials or hippies from the 60's. I couldn't tell...

Kurt

Your right, it applies to both.

 

[jacknsara]

Aloha,
My $.02:
I speculate that returning visitors spend less and less $$ on island with each return stay until it approaches (for outer islands) car rental, accommodation, groceries and perhaps restaurants. The beaches are free. The details for Waikiki are different. Oahu might want to sell bus passes at a locals' price to locals who can document they are locals and substantially raise spot bus fares and taxes assessed to tour bus operators.
Remembering back (not as easy as it used to be), we have done helicopter, snorkel/whale watch and a few other touristy things once each. We've done more than one luau, but we're pretty much done with them now after a few. We've lost count of how many times we've been to the islands, but fortunately, we don't have to know in order to fill out the tourist survey on the plane before landing; I think 10+ is the maximum.
Anyway, it is obvious that the infrastructure has been neglected. The visitors as a group generally have far more funds to tap than the locals who are working. A simple solution would be to radically increase the taxes on rental cars (with exceptions made for locals renting temporarily while their cars are being repaired) and increasing the lodging tax on all types - hotels, timeshares & vrbo/airbnb rentals. The jobs those extra taxes would fund would be in road construction/repair, park & beach and other infrastructure maintenance used by visitors and locals alike. I speculate that efforts to shift more visitors into full freight hotels will fail for several reasons.
Jack

 

[rickandcindy23]

Wait -- are you describing Millenials or hippies from the 60's. I couldn't tell...

Kurt

That was EXACTLY, almost word-for-word, what I was going to post.

These people paying $300 RT for airfare to Hawaii are not going to be big spenders.

Communes come to mind, also the new Airbnb accommodations that mean you share a bathroom with someone else, most likely, in a home that is not going to be considered a Bed and Breakfast in any sense of the word.

I read a bunch of reviews on Airbnb about some European accommodations, and they sounded more like cheap hostels, where you get a bed but should bring your own bedroll, because God only knows whether the sheets are cleaned between guests.

We buy less and less every trip to Maui. When our grandkids go with us, maybe next spring, Rick and I would love to buy them what they want, and we would enjoy taking them to some nice places, our treat. But we are tired of paying $130 per person, per trip for a luau we have seen five times already.

We went to our favorite restaurant on Maui, Kimo's, last trip, and they shorted me on fish. I have been there no less than 30 times over the last 15 years.

The server never got back to the table to ask if everything was okay until she returned with the bill. Rick told her my fish was only two small pieces, while he had three larger pieces. the server called the manager over. The manager was quite rude and said that I got the same quantity because the fish is weighed. No, it absolutely is not weighed. I won't go back there again. Our son was disappointed earlier this month because he loves Kimo's fish and chips. We went to Paia Fish Market down the street.

I just don't see any reason to argue with a customer, as a business owner of 35 years myself. Our son and his wife still went without us to Kimo's. The fish is really good, and the view is spectacular (as it is on the lanai in our unit).

 

[PamMo]

The people who spend $300 for those Southwest airline tickets could very well be first time travelers to Hawaii who have dreamed of going to that Pacific Island Paradise, but couldn't/wouldn't pay the $1,000+ airfares when they know there are great, less expensive vacation options. We know many people of modest means that would spend all their saved up vacation dollars to see/do everything in Hawaii, IF their budget wasn't eaten up by airfares. I'm sure Southwest recognized there is a pent up demand, and their planes are going to be full. How Hawaii deals with these new tourists will be telling. Will it exacerbate more local vs tourist animosity?

BTW, I really love seeing a familiar place through a newcomer's eyes. Their excitement, awe, and joy are contagious. It's always a reminder to never take my good fortune and ability to travel for granted.

 

[jehb2]

“First-time visitors spend more than repeat visitors,” Haas said. “Part of what Southwest [Airlines] brings to the party is bringing in visitors from relatively different markets – the San Jose’s of the world, where we’re more likely to get first-time visitors.”

The wording of the quote sounds like people in San Jose haven't been to Hawaii. The reporter follows up with "smaller markets" which is what I guess they were trying to refer to. That still doesn't make sense. But PamMo your explanation makes more sense.

 

[easyrider]

Hawaii has a tourist problem but tourism is Hawaii's largest industry. People are fickle and if Hawaiian government officials get involved adding new rules, on top of the many existing rules, I think they will see a drop in tourism that would send waves of problems through out their economy.

When we go to Hawaii we rent a car, go to the store, visit businesses but we stay in either a timeshare or friends place. If Hawaii makes rules that make my lodging more expensive I might consider a different destination. Too me, Hawaii has never been the most tourist friendly place but it is a nice clean place.

Bill

 

[rickandcindy23]

When our daughter and son-in-law get back to Maui again, they will definitely save money on food by cooking in the condo, but look out activity bookers because our daughter loves to go, go, go. She will have every day packed with things for those kids to do. They will have a blast.

 

[Chrispee]

Younger people place a higher value on experiences rather than momentos. I'd want to see more stats on restaurant/activity spending and vrbo/airbnb spending as well before lending any credence to this article.

Certainly the owner direct residential rentals impact the local rental market, but that is not a factor unique to Hawaii. One could also argue that the proliferation of the owner direct rentals puts money in Hawaiians' pockets rather than the chain resorts.

 

[PamMo]

The problem is money from "owner direct rentals" like AirBnB often do not end up in locals' pockets. Outside investors have been buying up residential properties in vacation areas, making tight housing markets even worse. It is a serious problem.

 

[Ken555]

FWIW, I think $300 roundtrip air from the west coast (which is currently available) would encourage me to visit more often, not less. For years I’ve been using miles to get free tickets but at $300 it’s better to pay cash. I don’t expect these prices to always be available, but if they become more common it will make a change in how often I visit.




Sent from my iPad using Tapatalk

 

[krj9999]

Random musings on this. Hard for me to gauge how accurate some of the data is or how it was determined. e.g., how does one distinguish cash purchases between a local and a visitor? I would also point to airline baggage fees that may limit desire for excess shopping in recent years. How big of an impact did addition of Walmart, Costco, Target have on reducing spending? For timeshare visitors, does purchase price (for those who bought in Hawaii, either developer or resale) get included in "spending"? I will note it appears higher-spending Japanese visitors now account for a smaller portion of overall visitors than in 2000 (earliest year I could find). And timeshare visitors now account for a higher proportion of visitors (how does that usage cost get calculated?). There may have been a slight increase in visitor party size (which would lower average per person spending). I suspect the internet and info from also have resulted in better informed consumers.

I was a little surprised that the number of first time visitors wasn't that much higher in 2017 than it was in 2000 (repeat visitors was much higher though). Guess explosion in cruising may be negatively impacting number of new visitors; especially for eastern half of the US and Canada.

Yes, we don't go to luaus anymore or buy floral print shirts. And have been there enough times that we don't do as much tourist activities in general anymore (though we do buy a lot of coffee to take or ship home). And find that hotel costs have gone up well in excess of inflation (many of the cheaper hotels in Waikiki have been replaced by much more expensive ones; new resort charges for RCI HGVC exchangers, etc.). We've also stopped renting cars in Waikiki due to excessive parking costs.

Also will note Alaska has an existing nonstop flight between SJC and HNL. And really don't find that airfare costs to get to Hawaii have gone up much from the east coast in the past 15 years.

 

[x3 skier]

Been once, enjoyed it immensely and that was it for me. But then, I live most of the year in Ohio and no real need for the long journey when there are many other places still to visit.

Cheers

 

[K2Quick]

And find that hotel costs have gone up well in excess of inflation

They must not be including hotel expenditures in how much people are spending because I noticed the same thing on hotel rates when looking to add a night onto our last trip. Dumpy hotels on Maui were going for $300 and up and the pickings were slim. So if the number of visitors is increasing and hotel rates are increasing, the conclusion I drew is they're not including that portion of spend. Unless people are spending more for hotel stays, but radically reducing other expenditures.

 

[BJRSanDiego]

I read in the report that SW will be bringing in an ADDITIONAL 4,000 people a day. Really? That implies that people have been abstaining from going to Hawaii because either there are not enough flights/seats OR the increased airline competition has driven down prices to the point that more people will go. But, I wonder if that equates to 4,000 ADDITIONAL people. I also wonder if there have been enough unoccupied accommodations to take care of those 4,000 people. That is roughly 2,000 units a day or 14,000 unit-weeks. How many vacancies are there actually??

But - - with supply and demand economics, a new equilibrium be achieved with rental cars, flights, accommodations, groceries, touristy activities, etc. So, if the demand (number of visitors) goes up, and the supply stays roughly the same (at least in the short-term), prices will go up and total Hawaii revenue will go up.