Australia has always played an important role in Hawaii’s international tourism market.
But now with increased air seat capacity and a strong currency, along with its polar-opposite seasons that fill the void during Hawaii’s slow travel season, the country from Down Under is poised to make even greater inroads in the islands.
It took another giant step forward this past week.
Startup carrier Air Australia launched inaugural flights to Honolulu from Brisbane and Melbourne, and Hawaiian Airlines expanded its Honolulu-Sydney service to daily from five days a week and announced it would replace the aircraft on that route with the larger Airbus A330-200 in May.
Hawaii now has direct access to Australia’s three largest cities: Sydney (4.6 million), Melbourne (4.1 million) and Brisbane (2 million).
"Australia is a very important market for us," said Mike Story, Hawaii Tourism Authority’s brand manager who oversees the Oceania (Australia and New Zealand) market. "The nice thing about the Aussie visitor is that they travel over our shoulder season (Hawaii’s slow season). Their peak arrival can be in the month of September and they’re still strong through October and November. So their travel habits certainly fit well with our seasonal patterns."
Australia’s 32.5 percent increase in visitor arrivals through October makes it the fastest-growing market to Hawaii for regions with at least 5,000 annual visitors, according to the latest data available from HTA. The country now represents 6.5 percent of Hawaii’s international market, up from 6.0 percent in 2010. Australia is the third-largest international market in Hawaii and is expected to increase its share of visitors next year due to the increased airlift.
Only Japan (40.2 percent) and Canada (15.4 percent) held larger market shares through the first 10 months of this year, according to HTA.
While Hawaiian has been flying between Honolulu and Sydney since May 2004, Air Australia is a newcomer, having re-branded itself with a new name last month after starting out in September 2009 as Strategic Airlines. The twice-weekly flights that Air Australia launched last week to Hawaii from both Brisbane and Melbourne represent the carrier’s first foray to the United States. Air Australia said it will expand the Brisbane and Melbourne routes to Honolulu to three times a week in March.
"We believe Hawaii is poised to enjoy a huge resurgence of visitor interest from Australia with more direct access and the favorable exchange rate," said Michael James, group managing director and CEO of Air Australia.
Besides Hawaiian and Air Australia, Jetstar Airways flies five times a week between Sydney and Honolulu, and Qantas Airways flies four times a week between the same cities.
Visitor arrivals from Australia grew to 156,767 through October from 118,336 during the same 10-month period a year ago, according to HTA. This year’s 10-month number already exceeds the full-year totals from Australia in 2010 (143,742) and 2009 (121,482).
One of the main reasons for the increase in visitor arrivals from Australia is that it’s becoming easier to book a flight from Australia to Hawaii. Scheduled air seats are expected to be up 28.9 percent this year, according to a preliminary forecast by HTA. In the first and second quarters of next year, air seats from Australia are expected to jump 86.8 percent and 63.7 percent, respectively, HTA projected.
Another primary reason for the influx of Australian visitors to Hawaii is the strength of the Australian dollar, which recently has been roughly on par with the U.S. dollar. Two years ago Aussies could get only 85 cents in exchanging their currency for a U.S. dollar. In March 2009 the Australian dollar fell as low as 63 cents versus the U.S. dollar. But the Australian dollar has been strengthening and in July of this year hit a recent high of $1.10 versus the U.S. dollar. The Australian dollar has lost a little of its strength since but is still strong by historical standards.
"I think the exchange rate has a lot to do with (the pickup in Australian arrivals to Hawaii), coupled with the deals in the market," Story said.
"The exchange rate drives a lot, and HTA’s responsibility is to make sure Hawaii stays front and center not only with our industry partners, but also the consumers."
Hawaiian Airlines, which initiated four-days-a-week service to Sydney when it began Australia service in 2004, now has made the commitment to fly daily year-round to Sydney.
"I think the development of that route has been steady," said Hawaiian Airlines President and CEO Mark Dunkerley. "Most of these new routes take a certain period of time to come into maturity, and we’ve been very pleased with the good job our sales and marketing team has done with Sydney."
Dunkerley said Hawaiian, which is adding new service to Fukuoka, Japan, and New York next year, is always on the lookout for additional opportunities. He said that would apply to Australia as well.
"Certainly, we’ve taken note of the fact that the Australia market has been strong," Dunkerley said. "It’s been growing chiefly on the back of the strong Australian dollar.
"Our first priority has been to build our Sydney service to add daily frequency and now to add our largest aircraft on that route. Looking forward, I think we will have an interest in additional markets."
James, the Air Australia CEO, said he has been "very pleased" with the immediate demand for the new flights to Hawaii.
"We are very encouraged by interest in our services," James said. "Hawaii is definitely a destination poised to enjoy even greater popularity with Australians."
HTA President and CEO Mike McCartney said the Australian market offers a lot of potential for future growth because of the additional seat capacity.
"That will really enhance the Hawaii market," McCartney said.
"There’s a lot of potential there that we can cultivate for growing our tourism economy. The key to that is airlift. We’ll be working on promoting those seats with our marketing partners, and I think it will be good for 2012."