The peak summer travel season is coming in cool — a sign that many businesses in Hawaii’s visitor industry will struggle to hit their year-end goals.
The state Department of Business, Economic Development and Tourism reported on Monday that on any day in May there were 210,695 visitors in the Hawaiian islands, up just 0.5% from May 2024. In May, DBEDT reported, arrivals to the state rose a mere 1% year over year to 771,038 visitors. Visitor arrivals in May were 91% of the pre-pandemic May 2019 level.
DBEDT Director James Kunane Tokioka said in a statement that May’s modest increase in total visitors was led by growth from the U.S. West, which offset arrival drops of 1.1% from the U.S. East, 0.5% from Japan, and 8% from Canada.
“As we go into the summer months, air service from U.S., Japan and Canada is scheduled to decrease. Combined with political and economic uncertainties, both nationally and globally, we are expecting to see a soft summer,” Tokioka said.
“We have been hearing from our partners that the average booking window for a trip to Hawaii is about 120 days, however, they are still seeing bookings in the month for the month.”
Mufi Hannemann, Hawai‘i Lodging &Tourism Association president and CEO, said in a statement, “As we move into the peak summer travel season, Hawaii’s visitor industry continues to face a complex and challenging environment. We are seeing a concerning softening of overall demand — especially when July, traditionally our strongest month, is showing signs of weakness.”
Visitor expenditures in May reached $1.68 billion, a 3.7% increase from May 2024. However, Hannemann said current market data and feedback from HLTA’s hotel partners point to a widespread drop in room rates and booking momentum.
“This is especially troubling given that summer is historically a time of compression and high performance across all market segments,” he said. “Occupancy and average daily rates (ADR) are trailing expectations — a key indicator of a market under pressure.”
Jerry Gibson, president of the Hawai‘i Hotel Alliance, said that efforts to drive last-minute bookings means that many hoteliers are not reaching their spending goals for summer, which runs from June 15 to Aug. 15, and as a result are unlikely to hit year-end goals.
“If we can’t make the summer — that’s our busiest time of the year — and we budget and forecast that way, … most likely, we will not make our budgets,” Gibson said. “That certainly affects (general excise tax) and the (transient accommodations tax) and the normal (spending) which gives all of Hawaii its rainbow effect.”
Gibson said there was some last-minute pickup for June because hoteliers put out very competitive rates to drive traffic.
“A couple of hotels (in June) got close to the occupancy (goal), but they were very far away from the rate,” he said.” A lot of the business that came was very, very last minute.”
Gibson added that July does not look good for hoteliers on Oahu or Hawaii island in terms of either occupancy or rate. Gibson said Kauai is faring better because it has fewer hotel rooms to fill and more timeshare product. He added that Maui is likely to be over what was budgeted for July. However, Gibson said, “it’s a very tough budget since they are still budgeting down from the Maui wildfires.”
Gibson said August is trending in the same direction as July.
“We’re looking for occupancy so everybody is trying really hard to fill the rooms. They are filling rooms at a lower rate so therefore it’s a great time for kamaaina to go to the outer islands,” he said. “Most of the hotels have good kamaaina rates out there.”
Hannemann also expressed concern for the neighbor islands, which he said typically benefit from strong summer interisland travel. This summer, he said neighbor island properties also are “reporting declines from last year, with some properties noting an 8-10% drop in summer performance and reduced direct flight options contributing to accessibility issues.”
Keith Vieira, principal of KV &Associates, Hospitality Consulting, said the summer malaise is carrying over into fall, which has even steeper drops, partly because hotels are so focused on driving summer.
“Anytime that you focus too much on the short term, you are giving away the long term,” Vieira said. “The hotels and other big entities won’t make money, but they’ll survive. Who gets hurt in all of this? It’s the small mom and pop businesses. It’s the restaurants, the dive shop, the surfing instructors — it’s all on those who live on the last 10% to 15% of their business to make a profit and they aren’t doing it.”
Vieira said increasing kamaaina travel will help support the industry; however, it does not completely offset the drop in domestic and international visitors, who tend to spend more money.
Hannemann, Gibson and Vieira say multiple factors are contributing to the slowdown.
“The absence of robust international travel, particularly from Japan, continues to weigh heavily on our high-end markets. Global political uncertainties and shifting consumer behaviors have also led more travelers to opt for destinations perceived as more affordable or easier to access,” Hannemann said. “We are seeing Hawaii fall off the list of top search destinations across major platforms, which is deeply concerning for our long-term competitiveness.”
Gibson also expressed concern about softening from the U.S. West, Hawaii’s top visitor source market, due to the Pacific Palisades wildfire in January, and the potential for overall visitor softening due to the U.S.-Iran conflict.
Vieira is concerned about the Hawai‘i Convention Center closing for up to two years for renovations on top of the drop in state dollars to market Hawaii as a destination, as well as the lack of a cohesive destination marketing plan due to the challenges at the Hawai‘i Tourism Authority.
He said, “We have so much to offer. The brand is so strong but when you are silent and your competitors are out there saying, ‘Try us,’ people do that.”
Hannemann said Hawaii’s visitor industry also must work together to address the increased costs of doing business, and that higher travel fees are making Hawaii appear more expensive, regardless of the value the visitor industry provides.
“The current pace for July suggests that the fall season may be even more challenging. However, our industry has proven its resilience time and again,” he said. “It is imperative that we continue to work collaboratively — public and private sectors alike — to reposition Hawaii’s value proposition, enhance our marketing strategies, and ensure that we remain top of mind for travelers around the world.”
Source: The Garden Island
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