Even before the tragic wildfires on Maui, Hawaii was experiencing slowing tourism demand. Unfortunately, things aren’t looking better this year as we head into what should normally be the busy summer months. In fact, through the rest of this year, Hawaii visitor demand remains soft.
Hawaii’s dower forecast is in stark contrast to nationwide predictions of the upcoming summer travel season. Reportedly, the TSA says it’s preparing for the busiest summer travel season – Memorial Day weekend through Labor Day weekend – ever. TSA officials are predicting a 6.4% year-over-year increase in traveler and airline crew volumes at their checkpoints for the upcoming holiday travel period alone. That’s a stark contrast to what we’re seeing in the islands as Hawaii visitor demand remains soft, raising concerns (and different theories as to why) among local experts.
Hawaii Visitor Demand Remains Soft
Local tourism experts seem to agree that this summer, Hawaii will see roughly 10% fewer visitors than last year. One tour operator, Pleasant Island Holidays, says their bookings for the upcoming season are down by as much as 28% in Hawaii, though their bookings for all other regions are up, with Mexico 5% higher than the same time last year, Europe up by “double digits” and Asia soaring by triple-digit percentage points. That last one isn’t surprising at all, especially given Japan’s relative newness in reopening to tourism and the still astonishing currency exchange rate – well, astonishing for American travelers; it ain’t good at all the other way around.
Why Hawaii Visitor Demand Remains Soft
There are many theories as to why Hawaii visitor demand remains soft. One blames airline capacity on the islands, which has remained relatively flat to the islands over the past year. However, that flatness isn’t even, as availability has increased to some islands while simultaneously decreasing to others, which some experts say increases airfares to affected islands. And while that makes sense, I don’t think that’s what’s going on here, though the theory is on the right track.
What’s hampering visitor demand the most is likely costs. As we all know, prices have been soaring for the past few years now. Inflation has made life more financially difficult at home and while on vacation. That means people have less money to spend on vacations, which will cause them to look for more inexpensive options. Hawaii was already expensive before inflation went crazy, but now? Hawaii’s prices have become very tough to swallow.
One of the most egregious segments in this regard is probably our hotels. While some experts report seeing more sales and kama’aina deals, I beg to differ. Looking at Marriott’s portfolio (as I’m most knowledgeable on their pricing) over the summer, at least half of their hotels aren’t offering kama’aina deals at all. Those that do are significantly more expensive than before. For example, the Waikiki Beach Marriott used to be $199/night kama’aina, but this summer, they’re priced at $279/night kama’aina. Mind you, this is before you factor in their $50/night resort fee, which used to be $35. It’s the same story at the Courtyard Waikiki, though they’re charging a resort fee, too, now!!
The Hawaii Tourism Authority backs this, too. For March 2024, they reported that the statewide average room rate came down 0.1% compared to the same time last year, but that rates remain a whopping 35% higher than 2019. Of course, thanks to those higher rates, revenue per available room (RevPAR) exceeded 2019 figures by 27.8%, despite occupancy being down 4.2% at 74.6%. See that? The people still coming are willing to spend the extra money, so hotels aren’t really losing money, which is why we’re not seeing prices decrease.
Of course, another reason for the depressed demand is the outcry from certain locals and Native Hawaiians against tourism in general. This has been a steady issue that was hugely magnified during the Maui tragedy. Unfortunately, those voices are still out there and still causing concerns among potential visitors – especially the more conscientious ones, which are the ones we want to attract.
Final Thoughts
As Hawaii visitor demand remains soft, our economic uncertainty will continue. But I don’t blame people for not coming. Things have become unsustainably expensive nowadays. You know what’s interesting, though? Local expert Keith Vieira, a person I frequently disagree with, just had to place at least part of the blame on Boeing because they’re scaring people away from flying. Yeah, ok. There are certainly people afraid of flying on Boeing jets, but they’re not in the majority, and there are many opportunities to fly Airbus aircraft to the islands, too.
At any rate, though Hawaii’s visitor demand continues to slow, I wouldn’t expect to see any great deals. Not, at least, on hotel rooms.
Good thoughts. I also think the proposed STR changes have the potential to further spike hotel rates with reduced accommodations. However, it will probably be a long time before that comes to pass, if ever.
Yeah, I feel like on Oahu, there isn’t much STR restrictions left. They could actually enforce existing regulations, but we all know that’s not going to happen.