Economists and visitor industry officials delivered a uniformly upbeat outlook Tuesday for Hawaii’s tourism sector, citing an increase in flights to the islands and growth of emerging Asian markets as major contributing factors.
The industry’s projected growth in 2012 comes on the heels of a solid performance last year that exceeded most forecasts.
“This year looks like tourism will be the star of growth for Hawaii’s economy,” Eugene Tian, the state’s acting chief economist, said at an annual luncheon hosted by the Pacific Asia Travel Association and the Travel & Tourism Research Association.
Tian reiterated the official state forecast of a 4.4 percent increase in visitor arrivals this year and a 6.4 percent jump in spending. Underpinning those projections are a 7.7 percent increase in the number of scheduled air seats to Hawaii in 2012, he added.
The Hawaii Tourism Authority expects continued growth from the emerging markets of China and South Korea, which have benefited from a streamlining of the visa process. It now takes about six days for a Chinese visitor to obtain a tourism visa for the U.S., down from about 60 days at this time a year ago, said Daniel Nahoopii, HTA director of tourism research.
The stronger-than-expected gain in visitor arrivals last year was good news for the hotel industry, which was able to increase its average daily room rate for the first time in 2011 after two years of discounting, said Joseph Toy, president of Hospitality Advisors LLC, an industry consultancy.
Hawaii’s average daily room rate fell by 12 percent in 2009 and 2 percent in 2010 before bouncing back by 9 percent in 2011 at $188. That was the second-biggest increase of any market in the country after San Francisco, Toy said.
In addition. hotel sales are poised to pick up after several down years, Toy added. “There is a lot of investor interest to acquire hotels. There is more debt and equity coming back into the market but only for gateway markets, like Hawaii,” he said.
The fact that Hawaii’s tourism industry recovery was more rapid than expected should not have come as a surprise, said Paul Brewbaker, principal at TZ Economics. He said most analysts underestimated the strength of the U.S. economy and overestimated the impact of the March earthquake and tsunami in Japan.
“My sense is that people have been way too negative,” Brewbaker said. “The actual tourism performance at the end of 2011 confirmed the hypothesis that Japan’s seismic event and geopolitically rooted oil-pricing sunrises should not frame the forecast for 2012 and beyond,” he said.
