Hawaii’s visitor industry recorded gains in both visitor arrivals and spending in January, but the pace of growth slowed from last year’s record-breaking performance, the Hawaii Tourism Authority reported Thursday.
Hawaii welcomed 681,854 visitors in January, up 5.9 percent from the same month a year earlier. They spent $1.43 billion during the month, 5.7 percent more than they did in January 2012.
The HTA is forecasting further gains in Hawaii’s visitor industry in 2013, albeit at a more modest pace than 2012. HTA expects visitor arrivals and spending in 2013 to increase by 3.5 percent and 6.9 percent respectively. Visitor arrivals last year rose by 9.6 percent over 2011, while spending increased by 18.5 percent.
All of Hawaii’s major visitor markets contributed to the gains in January, led by the U.S. West. However, there were signs that a weakening of the Japanese yen and record-high hotel room rates caused some visitors to tighten their purse strings and shorten their stays.
Average daily spending by travelers from Japan fell to $334.20, down 1.7 percent from $340.10 in January 2012. It was the only major visitor group that spent less in January than a year earlier on a per-day basis. Across all visitor markets per-day spending rose by 4 percent to $201.60.
The report was not surprising to officials of the University of Hawaii Economic Research Organization, who are forecasting a moderation of both visitor arrivals and spending in 2013.
Carl Bonham, UHERO executive director, said the decline in Japanese daily spending "certainly could be the effect of the weaker yen showing up. You’re talking about a 12 percent to 13 percent depreciation in January from a year earlier," he said.
Japanese visitors had to spend about 86 yen to buy a dollar last month, up from 76 yen in January 2012. A rising dollar erodes the buying power of Japanese visitors when they convert their yen to the U.S. currency.
Although many Japanese visitors locked in their hotel rates at more favorable exchange rates months ago by purchasing package tours, they still had to contend with higher prices for other things such as retail purchases and restaurant food once they got to Hawaii, Bonham said.
UHERO is forecasting the dollar to appreciate further against the yen this year as monetary authorities in Japan push for a weaker local currency to help kick-start the Japanese economy. A weaker yen helps Japanese companies that export to the U.S. by making their goods cheaper compared with American-made products.
The UHERO forecast calls for the dollar to average about 95 yen in 2013 and 99 yen in 2014.
Rising hotel room prices and occupancy rates appeared to have an across-the-board impact on the average length of stay for visitors, Bonham said.
The average daily rate for a hotel room in Hawaii rose to a record $204.15 last year, according to Hospitality Advisors LLC, an industry consulting firm. Hotel rooms were 76.9 percent occupied, up from 73.2 percent in 2012.
The average visitor stay in January fell to 10.43 days, down 4 percent from 10.87 days a year earlier. The biggest drop was for Canadian visitors, who stayed an average of 14.43 days, down from 15.25 days in January 2012.
"That’s a pretty sizable change," Bonham said, "It’s getting harder to get the length of stay that you want."
If there was any slowdown in visitor arrivals last month, it wasn’t evident at Surfing Goat Dairy, a popular attraction in Upcountry Maui that offers tours and a wide range of products made with goat cheese.
Thomas Kafsack, who owns the business with his wife, Eva-Maria, said his sales are up 17 percent so far this year compared with the same period in 2012. Last year marked a major milestone for the dairy, he said, with sales surpassing $1 million for the first time in its 10-year history.
The company is continually looking for product offerings to keep visitors coming, Kafsack said.
"Last year it was goat cheese truffles. It took off like crazy. We sold about 40,000 of them in 2012, and in the first two months of this year, sales are up 55 percent."
