Marketing Effort Made to Attract High-Spending Chinese Golfers to Hawaii

The Hawaii Tourism Authority and Pacific Links Hawaii have announced that they are working together to attempt to attract more high-spending Chinese golfers to the Hawaiian Islands. Micah Kane, the chief operating officer of Pacific Links Hawaii commented, "Year-to-date, we've hosted about 2,500 rounds of golf for Chinese members. Ideally, we'd like to see the partnership grow so that we can host 200 to 300 Chinese players monthly." Chinese golfers that come to Hawaii spend more than $550 per day in hotel stays, activities, and travel expenses.

David Uchiyama, the vice president of brand management for HTA, added, "We've partnered with Hyundai to develop the Korean golf market and with Sony to develop Japan, but this is the first time that we've participated in a public-private partnership to bring more Chinese golfers to Hawaii. In general we are doing very, very well in China, and we'll continue to improve our numbers. Golf is becoming a mainstream sport in China. If we can create enough demand, we'll get more carrier frequency, and that will help build the market even more."

Liwei Kimura, the director of business development for Starwood's Hawaii Region, Greater China & South East Asia Markets, commented, "We commend HTA and Pacific Links' leadership in this niche market development as golf is a fast-emerging activity in China, not only because it is viewed as a healthy and enjoyable sport, but also because people are attracted to it as a luxury lifestyle and a statement of social status. Hawaii can benefit by targeting these higher-spending, luxury leisure travelers who can bring us more economic benefit with less impact on our natural resources. Promotion of golf travel is one of the best ways to maximize Hawaii's competitive advantages while highlighting its world-class courses to target the Chinese."

Source: Honolulu Star Advertiser, 1-12-2015, www.staradvertiser.com
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Hawaiian Airlines Request for Kona to Tokyo Route

Hawaiian Airlines is once again requesting the U.S. Department of Transportation for an additional route to Haneda International Airport in Tokyo, Japan.  The route had previously been granted to Delta Air Lines, but Delta announced in 2014 that they will be changing their Haneda-Seattle route from daily to seasonal.  Hawaiian Airlines stated that if they are granted this opportunity, they would begin service on or about June 1, 2015 and will use a 294-seat A330-200 aircraft.  Mark Dunkerley, the president and CEO for Hawaiian, commented, "Kona continues to be a top destination for Japanese travelers, and we are more certain than ever that direct service to West Hawaii is the highest and best use for the scarce Haneda slots that are at stake here. This route would provide unmatched public benefit by improving U.S. exports, boosting spending and economic growth within the United States, and increasing U.S. jobs."

Delta Airlines has applied to retain its Seattle route, and American Airlines has also filed to create a route from Handea to Los Angeles.  There are only four routes to Haneda granted to U.S. airlines.

Source: Honolulu Star Advertiser, 1-6-2015, www.staradvertiser.com
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Hawaii Tourism Industry Poised to Set Record Year

According to a report issued by the Hawaii Tourism Authority, it appears that the state will set new records for visitor arrivals and spending in 2014.  While the final numbers for December are still not available, during the first 11 months of the year arrivals had increased by 0.9 percent and spending grew by 2.3 percent, leaving experts predicting that December will not be any different.

David Carey, the president and CEO of Outrigger Enterprises Group, was pleased with this development, but commented that hotel operating costs have also grown. Carey stated, "We always forget that inflation is a factor. Costs have certainly increased rapidly over the past three years: labor costs, medical costs and up until very recently, energy costs. At the end of the day it's been three years in a row of positive increase in business and that's good. The industry is getting better at getting pricing that's more in line with the quality of products here in Hawaii."

Ronald Williams, the CEO for the Hawaii Tourism Authority, commented, "Arrivals and spending from our developing international markets also continue to grow as we work toward diversifying our tourism profile and increasing first-time arrivals to the Hawaiian islands. This has helped to balance our core markets like Japan, where economic uncertainty has led to slight declines in visitor arrivals and decreases in length of stay, which are affecting total expenditures and may hinder us from reaching year-end targets for this market."

Source: Honolulu Star Advertiser, 12-30-2014, www.staradvertiser.com
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What to Do About Illegal Vacation Rental

The city's Department of Planning and Permitting is responsible for preventing illegal vacation rentals on the island of Oahu, but in the last five years only 88 violation notice or warnings have been issued and only $48,853 in fines have been collected.  Critics argue that this is a tiny amount considering that it is currently estimated that there are over 22,000 illegal vacation rentals being operated on the island.

Mayor Kirk Caldwell defended the Department of Planning and Permitting and stated. "The vacation rental issue is highly controversial. We face a huge challenge here, as you know, regulating and enforcing vacation rental issues, and it always comes down to money and whether we have the money to actually do the enforcement." George Atta, the director for the DPP, added, "Quite honestly, operators are smart. They tell their tenants not to answer the door and not to speak to anyone from the city. Because my inspectors don't have a warrant, they can't insist on entering. In a certain sense, we don't have the tools that are necessary to gather evidence."

City Councilman Ikaika Anderson has drafted a proposal that would expand owner-operated bed-and-breakfasts to 1,275 units, with no more than 25 percent of them allowed in one district.  Anderson also would punish violators sternly and would not grandfather in current offenders. The fees created by these new bed-and-breakfasts would pay for about a dozen new city inspectors, who would focus on vacation rental enforcement.

The Honolulu City Council plans to meet in the new year to discuss further options.

Source: Honolulu Star Advertiser, 12-29-2014, www.staradvertiser.com
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Illegal Vacation Rentals Have Many Residents Frustrated

There has been a recent expansion of illegal vacation rentals throughout the island of Oahu and visitors hope to gain new experiences other than being in traditional hotels and tourist destinations. While small businesses have welcomed these visitors to their local economies, many residents argue that the volume of visitors have hurt the quality of life in their sleepy neighborhoods. According to research conducted by the Honolulu Star-Advertiser, the North Shore of Oahu and Kailua are the most popular areas for illegal vacation rentals and as many as 80 percent of these vacation rental owners are operating outside of city restrictions. Donna Wong, a member of the Kailua Neighborhood Board, commented, "It's creating a lot of conflict and hostility. Kailua used to be a quaint, small town where everyone knew everyone. Now, it's a resort. The North Shore has a similar situation. Visitor traffic used to be contained to surf season. Now, they've got it 24/7, 365 days a year."

In 1986, a law was passed that prohibited vacation rentals rented for less than 30 days in neighborhoods outside of designated resort areas.  In 1989, another law was passed prohibiting any new bed-and-breakfast homes in all zoning districts. However, the Hawaii Tourism Authority has noted that the city has failed to enforce these laws and rental property owners are blatantly violating regulations in recent years. It is estimated that between 78 percent to 87 percent of the North Shore and Kailua rentals are operating illegally.

Some tourism industry leaders believe that the city should relax restrictions and make these types of rentals legal, provided that homeowners pay the transient accommodation tax (TAT) and general excise tax (GET). Critics argue that illegal rentals should be stopped, as it increases traffic and crime in residential neighborhoods, drains community resources and reduces the supply of residential housing.

Source: Honolulu Star Advertiser, 12-28-2014, www.staradvertiser.com
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Time-Share Industry Generates $45.8 Million in Tax Revenue

According to a report released by the Hawaii Tourism Authority, the time-share industry generated more than $45.8 million in state and county tax revenue and added 1,445 jobs to Hawaii's tourism industry during the past fiscal year which ended in June 2014.  The report noted that time-share occupancy was 88.9 percent statewide, which was almost 12 percentage points higher than the hotel occupancy during that same period.  Joe Toy, the president and CEO of Hospitality Advisors, commented, "The time-share industry is very healthy in Hawaii. I expect it will continue to expand.  There's lots of motivation for people to buy here. Part of it is the ability to have a prepaid stay in Hawaii, but there's also a very strong redemption value if you want to exchange elsewhere. That's why there are even a lot of Hawaii residents that buy into time share."

Henry Perez, the chairman of the American Resort Development Association of Hawaii added that within the next two years, the island of Oahu and Maui are expected to add an additional 500 time-share units each, and that there are another 800 units planned for the Big Island of Hawaii.  Perez noted, "This period of expansion is pretty close to the 2005-to-2008 time period. The time-share market gets hot when the visitor industry gets hot."

Source: Honolulu Star Advertiser, 12-9-2014, www.staradvertiser.com
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Hawaii Hotels Set Second Highest Average Daily Rate in Country

According to a report issued by Hospitality Advisors LLC, Hawaii hotels had the second high daily rate and revenue per available room in the entire country during the first nine months of 2014.  Coming in just behind New York City, Hawaii's average daily rates were $241.28 while the revenue per available room was $187.72.  These numbers represented a 4.9 percent and 4.8 percent respectively from the previous year.

Oahu had the highest occupancy rate of 85.2 percent, while Maui came in second at a 72.5 percent occupancy rate.  Kauai had a 71.3 percent occupancy rate and Hawaii island (Big Island of Hawaii) had a 62 percent occupancy rate.  Tourism experts are trying to come up with new ways to increase the neighbor island occupancy throughout the year while increasing the cost of Oahu's rooms. Barry Wallace, the executive vice president of hospitality services for Outrigger Enterprises Group, commented, "Oahu, especially Wai­kiki, is pretty much at capacity. When you get to occupancy in the high 80s, the industry really can't sustain much more since there are always some rooms that are out of order. Practically speaking, that's about as high as it can get, so for the next few years, growth on Oahu will have to come from higher spending."

Source: Honolulu Star Advertiser, 11-21-2014, www.staradvertiser.com
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Tourism Officials Excited About Chinese Tourist and Business Visa Announcement

President Barack Obama and Chinese government officials have announced that they will continue to encourage international cooperation and tourism by making it easier for citizens to obtain visas to the other country.  This was seen as a major milestone for the Hawaii Tourism Authority, which has been working for more than a decade to have more Chinese visitors, students and businessmen come to the islands.  Mike McCartney, president and CEO for HTA, stated, "China has become a market with tremendous growth potential. We look forward to working with our marketing contractor, Hawaii Tourism China, and industry partners to enhance travel opportunities and attract Chinese visitors to ensure the long-term sustainability of our tourism economy."  According to McCartney, there have been 128,792 visitors from China to Hawaii during the first nine months of this year.

Mark Dunkerley, the president and CEO of Hawaiian Airlines, commented, "Tourism is a vital contributor to the U.S. economy and to Hawaii in particular, and should not be underestimated. With an enormous population and a burgeoning middle class, the new visa policy will positively impact tourism and create new jobs over the long term by making our islands more easily accessible for Chinese travelers. Hawaiian Airlines offers three-times weekly service between Hono­lulu and Beijing, and we are well positioned to introduce this growing and steady new stream of visitors to our home."

Source: Honolulu Star Advertiser, 11-11-2014, www.staradvertiser.com
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Visitor Spending and Arrivals Increase in September 2014

The Hawaii Tourism Authority has announced that visitor spending increased by 1.4 percent to $1.1 billion in September 2014 as compared to the same month a year prior. Visitor arrivals also increased by 4.1 percent to 622,163 visitors.  Mike McCartney, the President and CEO for the HTA commented that these numbers show that the Hawaii visitor industry continues to maintain the positive momentum that they had experienced over the past two years.  McCartney stated, "While we are just shy of our targets, we are optimistic that 2014 will be another record-breaking year for Hawaii's tourism economy."

Barry Wallace, the executive vice president of hospitality services for Outrigger Enterprises Group, commented, "We beat last year by a pretty good margin. We didn't see double-digit increases, but the gains were pretty significant given that tourism set records last year. I think almost everyone is sold out for Christmas and New Year's, and there are a few conferences and the Hono­lulu Marathon to give us some nice spikes. With any luck at all, we'll continue that momentum into 2015."

Source: Honolulu Star Advertiser, 10-29-2014, www.staradvertiser.com
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Hawaii Visitor Arrivals Decline in August 2014

According to a report issued by the Hawaii Tourism Authority, there were a total of 730,707 visitors who arrived in Hawaii in August 2014, which represented a 1.3 percent decrease from the same month a year prior.  These visitors spent a total of $1.3 billion, or 0.5 percent less than August 2013.  Still, members of the tourism industry remain optimistic that 2014 as a whole will show better numbers than last year.  Mike McCartney, the President and CEO for the Hawaii Tourism Authority noted that he expects to see strong numbers for the month of September, especially thanks to a concert held on Ko Olina which attracted thousands of additional visitors from Japan.  McCartney stated, "We anticipate seeing a boost next month due to the two-day Ara­shi concert that took place on September 18th and 19th. The popular Japa­nese boy band attracted more than 15,000 Japa­nese visitors during the softer shoulder period, which is also expected to generate approximately $20 million in visitor expenditures."

Source: Honolulu Star Advertiser, 9-30-2014, www.staradvertiser.com
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Hawaii Tourism Authority to Spend More Marketing to International Community

The Hawaii Tourism Authority has announced that they will be increasing their international marketing budget by about $1.3 million in 2015 as part of their hope to create a more balanced tourism industry.  The state agency currently spend about $12.1 million per year on their international marketing, but feel that this is still the best avenue to increase revenue for the state. David Uchiyama, the vice president of brand management for HTA, stated, "Growing international markets helps us diversify and takes into perspective the carrying capacity of Hawaii and the desire to continue to grow expenditures over arrivals. Further expansion into Hong Kong and Southeast Asia will help round out our exposure, especially into the Asia-Pacific. It costs us about $5.48 in marketing to bring a North American visitor to Hawaii and about $5.10 to bring an international visitor here. Also, international visitors tend to spend more on a daily basis than their North American counterparts. For instance, in 2013 North American visitors spent $171.10 per day, while our international visitors spent $267.10."

The North American market will continue to remain the core market for Hawaii, and the Hawaii Tourism Authority spends approximately $29.7 million per year getting people from the mainland United States to visit the islands. Uchiyama added, "North America remains a very important market for us. It's really the foundation that allows us to build on all other markets. We are looking right now at a proposal from the Hawaii Visitors and Convention Bureau to add about the same amount of incremental funding to that (the North America) market, too."

Source: Honolulu Star Advertiser, 8-30-2014, www.staradvertiser.com
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Hawaii Tourism Authority Hopes To Attract Additional Airlines to Service Hawaii

The Hawaii Tourism Authority stated that they are currently speaking with about a dozen different new airlines, with hopes that they will eventually offer service and routes to the Hawaiian Island.  While visitor arrivals and spending continues to set records for the third year in a row, tourism industry officials argue that they can not become complacent.  Brad DiFiore of Ailevon Pacific stated, "You're in a competitive marketplace for air service. Airlines move airplanes around all the time. It's very, very easy. You have to fight for (Hawaii) all the time. Don't give up on us, and don't take it for granted because I absolutely assure you that there are plenty enough stations out there that are fighting for the same service and spending big dollars to do it. We don't have to buy it, but we sure have to fight for it."

HTA estimates that the total air seats to Hawaii will have increased by 3.9 percent in 2014. The Hawaii Tourism Authority has not announced what percentage of air seats they would like to go up by in 2015.

Source: Honolulu Star Advertiser, 8-29-2014, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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Hawaii Tourism in 2014 on Track to Beat Records Set in 2013

According to a report released by the Hawaii Tourism Authority, the state of Hawaii is on track in 2014 to beat records that they set in 2013.  For the month of July, visitor spending was up 2.6 percent to $1.35 billion and arrivals were up 2.5 percent to 772,106.  Mike McCartney, the president and CEO for HTA, commented, "Honolulu is ranked as the fourth busiest international port of entry for the U.S. We have 975 flights per week connecting 48 cities worldwide by 21 carriers. Our focus will be to ensure there is sufficient demand to sustain this increase in seats from our core U.S. market."

Keith Vieira, the principal of KV & Associates, Hospitality Consulting, commented, "Overall, the visitor industry performance is really positive for the state. Pockets like Kona and Kauai may still have a tough time because they rely more on the group market and it's not as strong as it needs to be. However, in general, we'll see positive growth in 2014, just not as strong as we saw in 2013 or 2012." 

Kelly Sanders, the area managing director of Waikiki for Starwood Hotels and Resorts, added, "We started to see a slow recovery in April, which along with May and June had a decline. Summer has rebounded to be better than last year, but we are concerned about fall. As we move into October and November, pace numbers and advance bookings are softer this year than they have been in the past," he said. "On the Japan side, we think it's mainly due to a less favorable exchange rate and a higher consumption tax. Also, the Korean market is down because we mainly depend on the honeymoon market and this year, due to the lunar cycle, is considered an unfavorable time to get married."

Source: Honolulu Star Advertiser, 8-28-2014, www.staradvertiser.com
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Hawaii Hotels Set Several Records in June 2014

According to a report released by Hospitality Advisors LLC, Hawaii hotels set several records in June 2014. Occupancy statewide was at 76.3 percent while room revenue reached a new high of $289 million thanks to a 3.3 percent rise in average daily rate to $235.82.  Revenue per available room (RevPAR) increased by 3.9 percent to $179.93, also a June record.  Joseph Toy, the president and CEO for Hospitality Advisors LLC, stated, "In March, April and May, the industry was concerned because the booking pace had fallen and people were waiting to purchase until closer to their arrival dates.  There were concerns about summer, but everyone has been pleasantly surprised by the strong pickup over the last four months."

David Caret, the president and CEO of Outrigger Enterprises Group, commented, "We're cautiously optimistic about the balance of the year.  We've seen some velocity in bookings and some recovery from the softness in the first part of the year that wasn't as soft as we originally thought. So far so good. I think next year's going to be OK, too."

Source: Honolulu Star Advertiser, 8-28-2014, www.staradvertiser.com
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Hawaii Tourism Authority Sets Goals for 2014 and 2015

The Hawaii Tourism Authority expects to set new records in 2014 with an estimated 8.25 million visitor arrivals spending $14.69 billion.  However, for 2015, the HTA hopes for even better numbers and would like to have 8.41 million travelers visit the islands and spend $15.11 billion.  David Uchiyama, the vice president of brand management for HTA, noted that Hawaii's tourism industry had a very strong 2012 and 2013, but that the emergence of more competitive destinations have lured some domestic travelers away from the 50th state. Uchiyama stated, "Other destinations like Mexico and the Caribbean are trending behind us in the recovery and that's hurt us to a degree because they are very aggressive. Going into 2015 we'll see growth continue, but it's not going to be as big as it was in the past. It's no secret that the percentage of growth is starting to narrow. We'll end up ahead of 2013 in 2014, not as much as first projected but still decent growth."

Mike McCartney, the President and CEO of the Hawaii Tourism Authority, commented, "Just because we've reached record levels doesn't mean that we are out of the woods. Other countries are gaining on us. We cannot be complacent. We want to remind everyone that this is the time to work even harder."

Source: Honolulu Star Advertiser, 8-24-2014, www.staradvertiser.com
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Construction Industry Expected to Rebound in 2015

According to a report released by the University of Hawaii Economic Research Organization (UHERO) the construction industry is expected to rebound in 2015 and help stimulate Hawaii's economic recovery.  The report stated, "The building upturn has been slow to show up in construction jobs or in the contracting tax base. "However, overall permitting has been more positive. Considering the large number of planned condo projects on Oahu, rail construction and the need for single-family homes, we remain confident that much stronger performance is in the pipeline."  It went on to add that construction jobs will expand by about 7 to 8 percent in the 2015-2016 period.

Regarding tourism, UHERO predicts about a 1.0 percent growth in arrivals in 2014, and a 2.2 percent growth in 2015.  The report commented, "Better economic conditions in the U.S. and abroad will support some improvement, consistent with recent increases in scheduled airline seats. U.S. arrivals will firm while Japa­nese visitor numbers will be negative for the year. Visitors from other countries will rise fastest, but down from the heady rates of increase of recent years."

Source: Honolulu Star Advertiser, 8-8-2014, www.staradvertiser.com
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Tourism Arrivals and Spending Increase in June 2014

According to a report released by the Hawaii Tourism Authority, there was a 1.9 percent increase in the number of arrivals and a 0.3 percent increase in spending for the month of June 2014.  For the first six months of the year, arrivals were just 0.1 percent less than the same period in 2013, and visitor spending increased by 2.5 percent.  Mike McCartney, the president and CEO of the HTA stated, "Hawaii's tourism economy continues to fare well and is on pace with last year's record-breaking year in spending and arrivals."

Source: Honolulu Star Advertiser, 8-5-2014, www.staradvertiser.com
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Hawaii Has Nation's Highest Hotel Room Rates in May 2014

According to a report issued by Hospitality Advisors LLC, the state of Hawaii had the nation's highest hotel room rates in May 2014.  In May, the average daily rate was $218.64 and statewide the hotel occupancy was 72.7 percent.  The revenue per available room was $158.95.  Oahu continued to have the highest occupancy with 80.5 percent of their rooms filled.  Kauai came in second with 70.8 percent occupancy.  Maui had 67.3 percent and Hawaii Island (Big Island) had 53.2 percent occupancy rates.  Joe Toy, the president and CEO of Hospitality Advisors, commented, "The gap in occupancy between Oahu and Hawaii island is still more than 20 percentage points, but I think by 2015 we'll see that recovery has spread across all islands. It's still a very respectable market, but it's a different one than it was in 2013. Because there was so much pent-up demand last year, people were booking well in advance. The high occupancy filled in the shoulder seasons and caused more travelers to consider a neighbor island," he said. "Now the number of people booking hotels 90 days (before arrival) has softened. We are seeing more booking pickup 45 to 30 days out. With some of the pricing concerns, we should start to see some activity on Hawaii island, which is still a good deal. " 

Jerry Gibson, the area vice president for Hilton Hawaii, added, "We were pretty happy with the last two months. April is normally a pretty heavy convention month, and we had some of those. We also filled it in with good government business and a little bit of leisure travel." However, I don't think that April and May are necessarily indicators of where we'll go. In September we'll figure out if the back of the year will remain solid and if the Asian markets will keep up. Everybody has their conventions in place for the end of the third and last quarters, but the unknown is how the wholesale business will come in. We're hoping that it continues to get better."

Source: Honolulu Star Advertiser, 7-23-2014, www.staradvertiser.com
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Hawaiian Airlines Has a Strong Second Quarter in 2014

Hawaiian Airlines has announced that during the second quarter of 2014, the company made a net profit of $27.3 million.  This is a huge increase as compared to the $11.3 million net profit that the airline posted during the same quarter a year ago.  Mark Dunkerley, the Chief Executive Officer for Hawaiian Airlines, stated, "Demand remains pretty strong in all of the geographies that we serve. Secondly, we've done a good job controlling our costs. And third, if you look at 2010, '11 and '12, we started a lot of new things (six new international routes), and it takes a while for them to settle in. Now in 2014 we're starting to enjoy the benefit of them maturing. Our financial results improved during the first half of the year and, barring any changes to the macro-environment or competitor behavior, we would expect to see strengthening in the back half of 2014.

Joseph Denardi with the Baltimore-based Stifel investment bank who tracks Hawaiian Airlines, commented, "It was better than we expected. I think the results benefited from some better revenue performance. They're seeing better pricing on some of their routes, and they're benefiting from some of the network cuts (Tai­pei and Fuku­oka, Japan) they made earlier this year. Competitive capacity trends (a pullback by competitors) have gotten a little bit better compared to last year. Overall, I think it was a pretty good quarter, and I think the decision with the A350 was smart and improves the longer-term outlook for the stock." 

Source: Honolulu Star Advertiser, 7-23-2014, www.staradvertiser.com
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Hawaii's National Parks Brought in $312 Million in Economic Spending in 2013

According to a report issued by the National Park Services, the seven national parks in Hawaii brought in $312 million in economic benefit to the state and supported a total of 3,665 jobs in 2013.  The total number of visited dropped by 4.2 percent as compared to the prior year, but this was attributed to the 16-day government shutdown in October. Chris Lehnertz, the Pacific West Regional Director, stated, "The national parks of Hawaii attract visitors from across the country and around the world. Whether they are out for an afternoon, a school field trip or a monthlong family vacation, visitors come to have a great experience and end up spending a little money along the way."  Mike McCartney, the president and CEO of the Hawaii Tourism Authority, agreed and added, "The Hawaiian Islands are a one-of-a-kind destination from our vast natural environment to our diverse history."

Source: Honolulu Star Advertiser, 7-21-2014, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
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