With tourism arrivals in 2018 edging closer to a benchmark 10 million annual arrivals, capacity at Hawaii’s airports, harbors and visitor accommodations will play a larger role in visitor industry performance.
The aviation industry obviously is still the major pipeline that brings all those visitors here. But Hawaii’s destination management decisions such as how many vacation rentals it allows to operate and airport capacity could affect airline access and service, said Brad
DiFiore, managing director of the Ailevon Pacific Aviation Consulting, who presented Wednesday during the closing day of the three-day Global Tourism Summit, which brought more than 2,000 attendees from
32 countries to the Hawai‘i Convention Center.
“There’s enough global demand for Hawaii that the airlines will fill whatever lodging capacity that you’ve got. The accommodations industry — the hotels, VRBO, Airbnb and such— drives airline capacity. Airport capacity also will impact tourism growth,”
DiFiore said.
Hawaii’s cruise ship industry isn’t as dependent on the availability of lodging as the airline industry. And, it could be a way for tourism to keep growing if tight lodging capacity dissuades air carriers. But another summit presenter, Shannon McKee, founder and president of
Access Cruise Inc., said port infrastructure, which determines harbor capacity, also will affect how much of a share Hawaii garners of the burgeoning $40 billion global cruise market.
McKee said every port in Hawaii has it limitations. Another challenge for Hawaii is that cruise lines are building larger and larger vessels and Hawaii can’t accommodate vessels over 1,000 feet, she said.
“But for now there’s still room for additional growth,” McKee said.
Hawaii’s cruise passenger days are expected to rise
7 percent this year to 1.14 million and another 11 percent next year to nearly 1.3 million. Passenger counts by island in 2018 also are expected to rise in Honolulu, Hilo, Lahaina, Kahului and Nawiliwili, but dip slightly in Kailua-Kona. Next year, passenger counts are
expected to grow in every market except Nawilwili, which is forecast to remain flat.
McKee said it’s good news that Royal Caribbean International and Disney Cruise Line plan to return to Hawaii. Also coming are Azamara Club Cruises, a niche player, and MSC Cruises, which will make its inaugural run to Hawaii in February.
The outlook for Hawaii’s aviation industry also is still strong. This year, the carriers that serve Hawaii added 785,000 more air seats to
Hawaii’s market than were available in 2017. The addition is anticipated to contribute $1.4 billion in direct visitor spending. Seats from Hawaii’s core North American visitor market are expected to grow almost 15 percent, with seats from Australia up less than 1 percent, and seats from Asia up nearly 3 percent.
“All airports have seen significant growth from mainland markets, with Kauai experiencing the most growth,” DiFiore said. “Despite all the growth, yields have been consistent so far. Capacity growth (between Hawaii and the U.S. mainland) will eventually moderate but not quite yet.”
Stagnant international
capacity also is growing again, DiFiore said. Japan, an important international market for Hawaii, has continued to see moderate growth with strong load factors, he added.
While the rising price of
oil and the strength of the dollar could pose challenges for Hawai’s overall aviation industry, DiFiore isn’t too concerned about 2019, which he expects will be a “shake things up” kind of year.
This year’s momentum will carry forward with Southwest Airlines’ expected launch of Hawaii service in early 2019. The carrier has announced that it plans to offer service between Kauai, Honolulu, Maui, and Kona and the California cities of Sacramento, San Jose, Oakland and San Diego.
There’s also some excitement about Hawaiian Airlines’ decision to start flying nonstop to Boston, the nation’s longest domestic route, in April. Delta Air Lines also has announced plans to start offering flights between Hawaii and Detroit three to five times weekly in June.
DiFiore said the Japan market also has two major developments coming in 2019, including the possible approval of a joint venture for Japan Airlines and Hawaiian Airlines and All Nippon Airways’ (ANA) coming launch of three huge A380 planes. The A380s, which ANA has announced are slated to begin Hawaii service in spring 2019, offer
520 seats, including an
expanded section of higher-fare-yielding first class, premium and business seats.
Technology also could stimulate overall aviation growth for Hawaii into 2019, DiFiore said.
Carriers with B787 and A350 planes on order could offer Hawaii international growth opportunities, DiFiore said. The advent of A320neo planes and B737MAX planes could offer shorter-haul options, he said. “New technology means new opportunities.”
