Hawaii ended 2022 with less than 90% of the visitor arrivals that it had in the pre-pandemic 2019, mostly because of the drop in international visitors, especially from Japan, which is historically Hawaii’s top international market.

Nearly 9.25 million visitor arrivals came to Hawaii in 2022, down 11% from the pre-pandemic 2019 level, according to preliminary data released Monday by the state Department of Business, Economic Development and Tourism.

U.S. arrivals reached more than 7.76 million, a gain of 12.9% over 2019, which offset a decline in international visitors, especially from Japan. Last spring a delegation from the Japan Association of Travel Agents visited Hawaii and forecast that the recovery of Japanese visitors to Hawaii would start with the 2022 Golden Week travel period and by year’s end would have returned to 40% of the pre- pandemic 2019 level.

Instead, only 199,760 visitors came to Hawaii from Japan in 2022, down 87.3% from 2019 when more than 1.5 million visitors came. Arrivals from other international markets also are still in recovery mode, but the smaller size of these markets means that the overall health of Hawaii tourism depends less on their presence. Visitor arrivals from Canada were at 399,869, a 26% drop from 2019. Arrivals from the category “All Others,” which included visitors outside of Japan and Canada, hit 792,676, a drop of 36.8% from 2019. Visitor arrivals by cruise ships reached 95,413, which was down 33.5% from 2019.

When compared with 2021, the recovery in 2022 looked much stronger. Hawaii did not lift its COVID-19 entry requirements for U.S. travelers until March 26, 2021. Prior to that, domestic travelers needed to quarantine unless they could show proof of vaccination or a negative COVID-19 test.

Hawaii also benefited for much of 2021 and the earlier part of 2022 by pent-up demand from U.S. travelers, who had limited access to international destinations due to COVID-19 restrictions or wanted to stay closer to home.

Jerry Gibson, president of the Hawaii Hotel Alliance, said domestic travel into Hawaii was strong in the summer of 2022, but by fall some softness began to emerge, culminating in one of the worst festive seasons that Hawaii had experienced since the 2009 financial crisis.

December results showed some additional recovery in international arrivals, which helped improve the year-end totals. Some 871,870 visitors came to Hawaii in December, down 8.5% from the same period in 2019 when 952,441 visitors came and up 15.8% from December 2021. Arrivals from Japan were at 36,988, down 67.7% from December 2019 and down 51.3% from December 2021.

However, the pace of U.S. visitor arrivals slowed some in December to 676,064, which was up 4.2% over December 2019 and down 0.1% from December 2021.

Gibson said the slowdown has stayed the course into 2023, adding, “We aren’t seeing any bright lights on the horizon yet.”

Gibson said a key question now is whether domestic travel to Hawaii will remain strong enough to balance continued weakness from Japan. A surge in domestic travelers for much of 2022 offset the decline in international visitors, but Gibson said there’s been some pullback as the U.S. grapples with economic uncertainty.

“In March we’ll see the opening of the 90-day booking window for summer,” he said. “Boy, we sure hope it’s more pleasant than what we are seeing now.”

In September the University of Hawaii Economic Research Organization issued an overall economic forecast for Hawaii that assumed Japanese visitors would return to 50% of their 2019 arrivals volume during the first quarter. But the market has proved far more sluggish than that.

Japan lifted its COVID-19 travel requirements in October, but travel to Hawaii was hampered by an unfavorable yen exchange rate and high fuel surcharges. Incentives from the Japanese government to stimulate domestic travel through the end of 2022 also interfered with recovery.

Eric Takahata, managing director for Hawaii Tourism Japan, said the last remaining hurdle seems to be a general wariness toward international travel. Takahata said HTJ is working with Gov. Josh Green’s administration to produce messaging aimed at convincing Japan’s COVID-19-shy travelers that Hawaii is a safe destination.

Takahata said the Honolulu Marathon brought a slight bump of travelers from Japan to Hawaii in December, and the next bumps likely will come for the Honolulu Festival in March and Golden Week in April.

Gibson said, “It looks a little anemic at this point.”

But Takahata said there are signs that Japanese Prime Minister Fumio Kishida by spring will downgrade the legal status of COVID-19 to the same category as the flu, which would relax mask-wearing and improve the psyche.

“It will be great for us,” Takahata said.

Still, Takahata said that he does not expect arrivals from Japan to return to 50% of the 2019 level until closer to the end of this year.

“By the end of the first quarter, we expect arrivals from Japan will still be down 70% from 2019,” Takahata said, adding that Japanese arrivals to Hawaii are anticipated to be down about 60% from 2019 in April, May and June, and hopefully will get to near half by midsummer.

“We aren’t expecting to see an acceleration until later quarter three or quarter four,” he said.

Takahata said Japan’s slower return, however, may have less of an impact on Hawaii’s economy than previously expected as economists keep pushing a possible U.S. recession to later in the cycle.

“Hopefully, that recession that the U.S. is looking like it is heading towards would be pushed out as far as possible, and the Japanese market for Hawaii would then recover and make up the delta,” he said.

Keith Vieira, principal of KV &Associates, Hospitality Consulting, told the Honolulu Star-Advertiser on Monday that even if domestic visitors continue to offset the drop in international visitors, pockets of the visitor industry will continue to suffer. Historically, about a third of the visitors to Hawaii have been international, with the highest concentrations in Waikiki, where the mix of international and domestic visitors is often split, Vieira said.

He said the mix of visitors affects visitor expenditures. Nominal visitor spending in 2022, which was not adjusted for inflation, reached $19.29 billion — up 8.9% over 2019. Nominal spending by U.S. visitors at almost $16.2 billion was 38.9% more than in 2019. However, international spending dragged down the total, especially since nominal spending by Japan was at $376.3 million, down 83.3% from 2019.

“If you look at the hotel average daily rate in Waikiki, it’s much lower than the neighbor islands,” Vieira said. “We’ve attracted more U.S. visitors to this point, but depending completely on them is not sustainable over the long run. We have to get more international travelers.”