February is typically a month to love for Hawaii’s visitor industry as travelers from cold-weather climes come to the isles to warm up. But this February it took an extra day, courtesy of leap year, to boost arrivals.
Visitor arrivals rose
4.1 percent to 688,794 visitors, and spending increased 4.8 percent to
$1.25 billion, according to preliminary statistics released Tuesday by the Hawaii Tourism Authority. February’s performance helped push year-to-date arrivals up 5.2 percent to
1.4 million and spending up 3.8 percent to $2.7 billion.
“February was a strong month for Hawaii’s visitor industry, with the bonus of leap year adding an extra day for businesses statewide to generate revenue,” said HTA President and CEO George Szigeti.
If not for Feb. 29, the monthly totals would have been lackluster. Since February had that extra day, the HTA’s average daily numbers compare more favorably with last year. On average, 23,752 visitors arrived per day last month, little changed from the 23,634 who arrived in February 2015. Total per-day visitor spending was $43.3 million, a gain of just 1.2 percent from February 2015.
Domestic visitors made up the bulk of February travelers, growing 6.4 percent to 446,433. International visitors in February also grew 3.1 percent to 237,540. Szigeti said visitors from the U.S. West, who spent
$14.3 million, and U.S. East, who spent $11.2 million, led February’s average daily visitor spending. These markets comprised nearly
60 percent of the $43.3 million daily visitor spending.
But the questions to ask tourism officials in February are: Where have all the Canadians, cruisers and romancers gone, and what’s up with spending by visitors from Japan? Canadian snowbirds looking to spend time in a warm-weather destination have long bolstered February results. Air seats from Canada, which were up 9.2 percent, didn’t disappoint. However, arrivals from that market fell
10.6 percent to 58,349. And the Canadians who came to Hawaii spent significantly less in the isles with total expenditures falling 25.2 percent to $115.3 million. Year-to-date arrivals from Canada are down 11.2 percent to 122,147 visitors, and spending has declined
19.6 percent to $247.8 million.
Joseph Toy, president and CEO of hotel consultancy Hospitality Advisors LLC, said currency changes and shrinking midpriced hotel inventory likely played a role in the Canada drop.
“They are an extremely cost-conscious market,” Toy said.
In mid-May it cost Canadians $1.20 of their currency for every $1 of U.S. currency, he said. By the end of December going into January, Toy estimated the cost at $1.45 Canadian dollars for every U.S. dollar.
“The Canadian dollar started strengthening after that, but it was still pretty high at $1.32 to one U.S. dollar on March 24,” Toy said. “The difference is especially significant if you look back to July of 2014, when the two currencies were almost at parity.”
Keith Vieira, principal of KV &Associates Hospitality Consulting LLC, said he anticipates improvement from the Canadian market when additional midpriced inventory opens in Waikiki’s market.
“They are Waikiki-centric, so we’ll see a big improvement when the inventory that was taken off the market for the renovation and re-branding of the Hilton Garden Inn comes back,” Vieira said.
The niche romance market also struggled in February as visitors coming to honeymoon or get married dropped 12.7 percent to 39,134. Since Japan is a major romance source market, Vieira said declines were due to unfavorable yen currency exchange rates.
“It’s gotten better, but it takes a while to come back from higher prices,” Vieira said.
Toy said the market will often lag by six to nine months before improving exchange rates produce a turnaround.
While February visitor arrivals from Japan were flat at 115,731, spending from the the market fell 5.4 percent to $157.6 million. Year-to-date visitor arrivals from Japan rose 3.6 percent to 234,580; however, spending declined 4.8 percent to $320.3 million. The weak Japanese economy and continued currency challenges contributed to spending declines. Spending from Japanese visitors might also have dropped because
12.25 percent more of them made their own travel arrangements in February, continuing a trend that has seen 10 months of double-digit increases.
Japan’s currency in mid-March had risen to 111 yen to the dollar from 125 in mid-December. However, exchange rates are still pretty expensive for Japanese travelers in comparison with 2011 when it was 76 yen to the dollar.
Cruise visitors also fell 58.8 percent to 4,821 visitors, and their spending dropped 45 percent to
$1.6 million. Only two out-of-state cruise ships arrived in February as opposed to the six ships that brought 11,711 visitors to Hawaii in February 2015. Visitors who arrived by airlines in February to embark on home-ported cruises fell 46.9 percent compared with the prior year. Year-to-date cruise ship arrivals have fallen
24.5 percent to 15,833, while spending has stayed flat at $6 million.