Golden Week, the traditional peak Japanese travel season, is better this year than last, but it isn’t the gold mine that it once was because Hawaii is losing ground to competing destinations during this holiday period and beyond.

Eric Takahata, managing director for Hawaii Tourism Japan, said Golden Week is projected to be 20% to 30% better than 2023; however, it’s still close to 50% below the pre-COVID-19 2019 level. The holiday period started Friday and runs through May 6.

“Last year at this time we were only 35% recovered to COVID, so we are making year-over-year increases,” Takahata said, but he added that the recovery of Japanese visitor arrivals to Hawaii this year is now projected to come in even slower than anticipated.

“We expect to be 60% to 70% recovered to 2019 by the third and fourth quarter of this year,” he said. “We had expected nearer to 80%.”

Japan, historically Hawaii’s top international market, has continued to lag the tourism recovery. Tourism officials have said it could be 2026 or longer before the Japan market is restored to its 2019 level of more than 1.5 million visitor arrivals.

A key reason is that the Japanese government did not lower its COVID-19 threat and put it on par with the flu until May 2023. Other factors are high U.S. inflation, the strong dollar and fuel surcharges, which are expected to rise again for summer and put total round trip fuel surcharges at about $480 per person. A more recent threat is that competition is growing from other destinations that have invested more in their natural resources and other assets and are managing and marketing them better.

Danny Ojiri, vice president of sales and marketing for Outrigger Enterprises Group, said, “I believe the realistic recovery from Japan over the next 18 months is 70% of 2019 levels. Current economics just don’t support a full return back to 1.5 million over the next two to three years.”

It’s not that travelers from Japan aren’t traveling; they just aren’t traveling to Hawaii at the same level during Golden Week and beyond. Golden Week is an important measure of the health of Japan travel to Hawaii as it’s one of the busiest travel times besides New Year’s or the summer Obon season in August or the series of September holidays that make up Silver Week.

Ojiri said the Golden Week holidays this year don’t allow travelers to combine holidays as effectively with vacation days, so they are favoring designations that are closer to home for shorter trips.

“According to a JTB report, domestic destinations are at 95% pre-pandemic levels. International travel is up 68% over last year but still at 56% of pre-pandemic levels,” he said. “The increase this year is due to it being the first year free of COVID restrictions being lifted for international travel in May last year.”

Dave Erdman, founder, CEO and president of PacRim Marketing Group Inc., said, “Hawaii has been in the top three (for Golden Week), but it appears this year that Korea and Southeast Asia will be top destinations, along with some long-haul European destinations.”

Erdman said Hawaii will see Golden Week “travelers that do have the time and savings but will look to economize on accommodations and spending, and look for good value and ‘value propositions’ from all aspects of their vacation.”

He added that Hawaii often judges the market progress from Golden Week. “However, today’s savvy travelers might opt to come prior to, or even after, summer when airfares are more reasonable,” Erdman said.

Travelers from Japan have begun to accept the price differential, but Takahata said travel planners and sellers at the HTJ Japan Summit said Hawaii is losing ground to aggressive marketing from other other destinations like Okinawa, South Korea, Southeast Asia, Australia, Guam and Europe.

Takahata said demand and conversion data from Expedia Japan, a presenter at the HTJ Japan Summit, a two-day event held last week in Honolulu, shows that Hawaii remains the top destination that Japanese travelers would like to visit if money were not an issue. However, he said, Hawaii drops down to No. 8 from No. 3 in 2023 when it comes to converting desire into bookings.

“We’ve dropped five spots in the last year,” he said. “Expedia Japan is the largest supplier now of arrivals from Japan to Hawaii, so when they show us that kind of data, we listen. This should serve as a wake-up call.”

Takahata said more international destinations have reopened since COVID-19 and are advertising better prices, newer infrastructure and that their beaches and parks are completely open and accessible to travelers.

He said a case study of Singapore, one of the destinations that Hawaii is trailing, is especially concerning given that it shares the same distance and unfavorable exchange rate challenges as Hawaii.

“Singapore’s’s tourism industry is going after the Japanese. A four-star hotel there is about $450 a night, and it’s double that here,” Takahata said. “The perception is that they get more quality for their money there.”

He added that Hawaii’s government leaders must realize that infrastructure matters to visitors as much as it does to residents.

“Everything should be in working order, and that’s not the fact here. You have construction projects going on endlessly in Waikiki. This lane is closed. This is broken. You have water main breaks all over the place. You have the homeless,” he said. “We have to take a long, hard look. We say that the Japaneses are important to us, but we have a convention center with a leaky roof.”

The green fee, which would have charged travelers $25 to visit Hawaii, didn’t pass this state Legislature. However, Takahata said coverage highlighted the fact that a trip to Hawaii already is taxed at the highest rate globally and that those taxes do not appear to be funding infrastructure investments.

Takahata added that restrictions on commercial activity at some Hawaii beaches means that the bus tours that Japanese tend to favor no longer can go to all the places that they want to visit. He said wedding companies like MyNavi Wedding told those gathered at the HTJ Japan Summit that they are struggling from restrictions on commercial activity at beaches that prevent them from taking wedding pictures at formerly popular spots such as Waimanalo Beach.

“Okinawa is trouncing us in the romance market,” Takata said. “They are actually using our inaccessibility to their advantage because they are like, ‘Hey, you can take your picture at this beach or this beach or this beach.’”

Despite the roadblocks, there are opportunities for Japan to rebound. Gov. Josh Green was in Japan in March meeting with Japanese officials and business leaders to work on lowering barriers to travel between Japan and Hawaii through a “Travel Corridor” that expands Global Entry, beefs up biometric screening and pursues “preclearance” status.

“The importance of the governor and travel officials building relationships with government officials, airline partners and travel partners cannot be overstated,” Ojiri said. “Relationships are a big factor in doing business with Japan. That’s just how it works. We need to communicate that the state of Hawaii will do whatever possible to support industry partner efforts to promote Hawaii.”

Takahata said the Hawai‘i Tourism Authority approved a $9 million budget for the Japan market for 2024 — the first time since 2019 that the budget has been fully restored. He said HTA also approved pivoting from a strictly malama (take care of) Hawaii marketing campaign to two new campaigns called “Beautiful Hawaii” and “Yappari Hawaii.”

Alisha Valentine, SMAR­Insights vice president, told the HTA board Thursday that marketing by HTJ in 2023 was about 16% above average for its return on investment, which was $330 for every dollar as compared with $285 for the post-COVID-19 average return on investments for dozens of state destination marketing organizations.

Ojiri said, “HTJ’s realignment with ‘Yappari Hawaii’ (Got to Be Hawaii) campaign resonates a direct and positive message. Other international destinations such as Korea, Thailand, Taiwan and Australia are aggressively maneuvering for their share of the Japanese traveler. Hawaii now has new competition with long-haul European destinations such as France, Italy and Spain. The price for a European vacation for the Japanese traveler is now comparable to a Hawaii trip.”

Erdman said Hawaii retailers and hospitality and activity partners desire to have Japanese travelers return in greater numbers and are putting more effort toward promoting to the market, which is critical to getting an overall market return.

“I am confident in our joint efforts and collaboration to lift the business beyond Golden Week into the summer, fall season and festive season, where some hotels are reporting that they are already getting bookings, which is a continued important sign of the destination recovery from the Japan market,” he said.