Hawaii’s travel industry may have more to celebrate in the New Year than it expected now that the first quarter is finally showing signs of strengthening.

The gains, which started in the fourth quarter, have not returned Hawaii tourism to its peak and aren’t expected to change the state Department of Business, Economic Development & Tourism’s forecast declines this year. DBEDT’s latest forecast anticipates that Hawaii tourism will end the year with 9.56 million arrivals, a 1% contraction from 2023, and that spending will fall to $20.74 billion, off 0.6% from 2023.

Still, the current strengthening continues the industry’s recovery from COVID-19 and the Aug. 8, 2023, Maui wildfires, and come at a crucial time. Keith Vieira, principal of KV & Associates, said, “History has shown us when we miss the first quarter, we miss the whole year because you are just playing catch- up.”

The market, which was really slow in August and September, began picking up in October. A preliminary visitor statistics report for October released Wednesday by DBEDT highlighted the month as having the second highest number of arrivals for any October on record.

Arrivals to Hawaii rose 5.4% year-over-year to 774,617 visitors, according to DBEDT, while total spending by these visitors measured in nominal dollars increased 6.2% to $1.58 billion.

The spending and arrivals gains were helped by 180,609 Maui visitors, a 34.3% increase over last October, and a 16.7% spending rise. More than a year after the wildfires, which leveled Lahaina and killed 102 people, the dampening continues to affect tourism performance statewide, but to a lesser degree than it once did.

Results varied across the islands. October arrivals to Oahu rose 1.7% from October 2023 and 15.1% on Lanai, and 4% for the cruise ships. But they were down 12.8% on Molokai, 3.8% on Kauai, and 1.7% on Hawaii island.

October visitor spending rose 8.1% year-over-year on Oahu, 18.4 % on Molokai, 31.5% on Lanai, and 6.1% on Hawaii island, but fell 14.2% on Kauai.

DBEDT Director James Kunani Tokioka said in a statement, “With a recovery rate of 97.3% from pre-pandemic October 2019, this is the highest recovery rate since April 2023 (not counting February 2024, which had a leap day).”

Tokioka said the 35,627 visitors who came by out-of-state cruise ships this October contributed to the growth of overall visitor arrivals and registered the highest monthly number since January 1999 when cruise visitor counts were first recorded.

He said airline schedules indicate that international markets will remain weak over the next few months, but that air seats from the U.S. in November and January will increase by 7% over the same period a year ago.

Jay Talwar, Hawai‘i Tourism USA’s senior vice president and chief marketing officer, said, “Long-term 2025 looks soft. But the first quarter is beginning to fill in. As of the end of last week, I’ve heard from major travel industry partners that first quarter is still down but it’s looking a lot better than it did even a month ago.”

Talwar, who works for the Hawai‘i Visitors and Convention Bureau, which is under contract to the Hawai’i Tourism Authority to market the state to U.S. travelers, Hawaii’s core tourism source market, said the timing suggests that a Los Angeles activation in September might have helped to augment HVCB’s new national brand marketing strategy, “The People. The Place. The Hawaiian Islands.”

“I think it shows a side of Hawaii that we want to share and is alluring to travelers,” he said.

‘Better and better’

Jack Richards, president and CEO of Pleasant Holidays, said Hawaii’s festive season which spans the Christmas and New Year’s holidays, “is coming in better than last year, and it’s coming in last minute. It’s up single-digits year-over-year, but it continues to get better and better.”

Richards said Hawaii is making a lot of progress in 2025 as well.

“We were off 40% (several months ago) and we are off 10% year-over year,” he said. “I think it’s filling in next year because people are getting more comfortable that they can travel to Hawaii now that the Maui wildfires are in the rearview mirror.”

HTA Board Chair Mufi Hannemann said participation from Gov. Josh Green and Maui Mayor Maui Richard Bissen in the L.A. Saturation, a marketing saturation partnership between HTA and Hawaii’s travel industry, clarified the mixed messaging, which was creating challenges in getting visitors to come back to Maui after the wildfires.

“We did a big huge favor to the industry by having the unequivocal support of the governor of this state and the mayor of Maui on this trip,” he said. “The proof in the poi is that a major takeaway of this is that the Los Angeles Rams want to do something with Hawaii, especially Maui on a regular basis.”

He added that Maui has benefited from the Maui Invitational, which drew thousands of visitors to see eight men’s college basketball teams play in Lahaina this week.

Hawaii’s top international market also is making some progress. Eric Takahata, executive director of Hawai‘i Tourism Japan, said the travel industry is reporting that demand from Japan during the holiday festive period, from Dec. 28 to Jan. 5, is up 10%, and airlines are reporting load factors in the mid 90% range during this period. Takahata said the travel industry is also reporting that the booking pace for the first quarter of 2025 is approximately 20% ahead of the first quarter 2024.

However, he said arrivals from Japan still lag behind 2019 due to the continued unfavorable exchange rate between the U.S. and Japan as well as inflation in Hawaii and the U.S. as a whole, which has increased the cost for visitors from Japan to come here.

Takahata said the current political environment, including the shaky election of a Prime Minister Shigeru Ishiba and the newly elected U.S. President Donald J. Trump, has added uncertainty.

“How these two new leaders will deal with U.S.- Japan relations and specifically the depreciation of the yen against the U.S. dollar still remains to be seen,” he said. “Global geopolitical conflicts create increased stress and apprehension on both the U.S. and Japan economies.”

‘A revolutionary step’

Hopes for more Japanese visitors got a boost this week when the U.S. Customs and Border Protection agency announced that its Global Entry program now applies to eligible Japanese tourists flying into Daniel K. Inouye International Airport.

The program eliminates processing lines and provides faster TSA pre-check screening, among other benefits designed to encourage foreign travel to American destinations.

In a statement, Green called the inclusion of Hawaii’s major airport into the program for Japanese tourists “a revolutionary step for Hawai‘i and our local travel industry. The state of Hawai‘i has worked for over a year to advocate for this expansion with both Japan and our federal government, and this is a change that will make traveling to and from Japan easier and safer for visitors, business travelers and residents alike.”

Tetsuya “Ted” Kubo, president and chief executive officer of JTB Hawaii Inc., said the travel company is seeing about 30% more travelers related to the Dec. 8 Honolulu Marathon compared to last year. Kubo said the increase made it feasible for JTB to bring back its higher amenity marathon tent service packages for the first time since 2019, and the company is expected to launch an exclusive ride share program in April to offer customers transportation flexibility beyond the trolley program.

“We are looking at Hawaii tourism with a long-term view,” he said. “The last larger investment that we made in Hawaii was in 2019 with the HIBus Trolley Hawaii. We are ready to reinvest back into our assets, resources and services so that we can generate more value-added satisfactory experience while customers are here in Hawaii.”

Still, Kubo said even with the Honolulu Marathon strengthening, the forecast for arrivals from Japan through the end of the year is only expected to be about 50% of its 2019 pre-pandemic level.

Speaking in his capacity as the Honolulu Festival Foundation president, Kubo said the marathon gains bode well for the Honolulu Festival, which is slated to take place in early March.

“We look at the Honolulu Marathon to see the pulse of the market leading up to the Honolulu Festival,” he said. “We are looking at about 2,500 Honolulu Festival attendees coming from Japan.”

Kubo said the expectation for tourism from Japan in Hawaii next year is that it will recover to around 60% or a little more of the 2019 pre-pandemic level.

“We are not trying to over-estimate. It’s a steady, but somewhat slow recovery.”