Hawaii tourism

Hawaii tourism rebounds but Japan remains an obstacle

Riding on pent-up demand from American travellers, Hawaii’s tourism industry is heading into summer with momentum approaching that of the heady days before the Covid-19 pandemic when the state saw record numbers.

Today, according to economists and industry leaders, only one piece of the puzzle is missing: visitors from Japan. The good news is that a significant return of tourists from Hawaii’s third-largest market appears to be on the horizon.

Even without Japan, Hawaii is booming. The state welcomed more than 25,000 air passengers a day on average in March, approaching pre-pandemic levels, according to Eugene Tian, ​​Hawaii’s chief state economist. And if there are not as many tourists as before the pandemic, those who come spend more.

A Hawaiian Airlines plane takes off from Maui. The airline hopes the easing of travel restrictions in Japan will soon help restore business between Hawaii and the state’s third-largest tourist market. Ludwig Laab/Civil Beat/2021

For example, daily spending by visitors from western states in February was $227 per person, 44.7% higher than in February 2021, when daily spending per visitor was $157, data shows. released Thursday by the Hawaii Department of Business, Economic Development and Tourism. Total visitor spending in February topped $1.3 billion, just 10% lower than February 2020, according to DBEDT. Mars looks even stronger.

And that was before Governor David Ige lifted the requirement that visitors must show proof of vaccination or a negative Covid test to avoid a five-day quarantine upon arrival, making it even easier to visit visitors. people.

However, travelers from Japan are almost non-existent in the islands. Japan has historically been Hawaii’s largest foreign market and the third largest market segment behind the western and eastern mainland markets.

In 2019, about 12.6% of visitor spending and nearly 1.6 million visitors came from Japan, according to Data from the Hawaii Tourist Board. On a typical day in March 2019, flights from Japan would bring 4,000 to 5,000 travellers, the data show. In March, the number was more like 200 to 300.

“Japan is the great barrier,” Tian said.

To quantify the size of the barrier, Tian noted that visitor arrivals in February were around 16% lower than the number in February 2019, showing a substantial rebound. Meanwhile, arrivals from the mainland were 15% higher than before the pandemic. Arrivals from Japan, on the other hand, were less than 2% of what they were before the pandemic.

“Japan’s recovery is only 1.8%, so we’re still down 98%,” said Tian, ​​who heads the DBEDT’s economic research division.

But that could soon change. In its latest economic forecast for Hawaii, released March 6, the University of Hawaii’s Economic Research Organization predicted that Japanese visitors would rebound significantly by summer.

“After a weak first quarter, Japanese visitors will start to return in the spring and recover half of the pandemic-era losses by the end of the year,” UHERO said. “Visitors from other international markets will rise sharply in the second quarter, returning to three-quarters of their pre-pandemic level by the fourth quarter of this year.”

In an interview, UHERO Executive Director Carl Bonham said that it doesn’t look like travel from Japan to Hawaii is coming back for Golden weeka collection of national holidays celebrated in late April and early May that usually bring a flood of Japanese visitors to the islands.

One problem at the moment is the shortage of airline seats. For example, Hawaiian Airlines, the state’s dominant carrier, now operates only four weekly flights to Japan, down from 35 weekly flights before the pandemic. Tian said airport data shows Hawaiian is expected to add flights between Hawaii and Japan in May, and Japanese carriers ANA and Japan Air Lines will add flights this summer.

“We are seeing increases in flights in May, and there will be more in June,” he said. But there is still one factor limiting flight growth – a cap on passenger arrivals in Japan.

Restriction of passenger arrivals is an obstacle

Previously, preventing travel to Hawaii from Japan was a two-week quarantine requirement for returning residents in Japan. The result was that anyone vacationing in Hawaii would have to tack on an additional two weeks to self-quarantine after returning home — something few would-be visitors could manage.

That changed in March, when Japan lifted the quarantine requirement for returning residents who were vaccinated and able to obtain negative PCR tests before returning home and upon arrival, said Kazuyo Sigler, consul of the staff of Consulate General of Japan in Honolulu.

But a final bureaucratic hurdle remained as Japan limits the number of passengers allowed to arrive per day.

“We are encouraged by Japan’s gradual easing of travel restrictions,” Hawaii President and CEO Peter Ingram said in an email. “However, a cap on passenger arrivals for all airlines operating flights to Japan limits our ability to further restore our service.”

But that too seems to be changing.

“The Japanese government’s decision in mid-March to increase the cap on arrivals to 7,000 from 5,000 is a promising sign, and we look forward to further easing restrictions so that we can resume more flights. from this key Hawaiian tourist market,” Ingram said.

Howard Miao, owner of Maxi jewelry store in Waikiki, says the loss of Japanese tourists has devastated his business. But he hears visitors could finally return this summer. Stewart Yerton/Civil Beat/2021

The implications for Hawaii’s economy are significant. It’s not just that Japanese travelers fill hotel rooms and restaurant tables like other tourists, which they do. But there are also large companies whose staff have been devastated by the lack of visitors.

In April 2020, for example, JTB-Hawaii, the local unit of The giant Japanese travel agency JTB, announced it would furlough some 421 workers in Hawaii, and later made more than 100 of those furloughs permanent, according to notices sent to Hawaii labor officials. Similarly, Watabe Wedding, which produces Hawaiian weddings for Japanese visitors, announced that 240 workers would be laid off, in a range of occupations, including cooks, drivers and makeup artists.

It’s unclear how many of those employees were able to return to work as tourism generally reopened, but not from Japan. JTB and Watabe executives declined to comment. But Howard Miao, owner of the Waikiki Maxi jewelry store, said he had seen very little business from Japanese tourists who make up 90% of his customers.

“For the summer, I hear a lot of people have tickets booked,” he said. “But we’ll see.”

A mainstay of Hawaii’s tourism industry, Japan’s wedding industry, pictured here in 2018, has shrunk amid the pandemic. Stewart Yerton/Civil Beat

There are also implications for the wider tourism economy. Although mainland leisure travelers have flocked to Hawaii, the pent-up demand driving those visitors will eventually subside, said Jerry Gibson, president of the Hawaii Hotel Alliance, a tourism trade association.

With few major group activities to fill the void, Gibson said, Hawaii will need Japanese visitors as well as short-term group activities just to tread water. Although March was good, thanks in part to Spring Break visitors, Gibson said, “There are things we need to make all the cake that aren’t there yet.”

Bonham agreed that the high activity on the continent will not last forever. Many people who have visited Hawaii in the past year simply won’t want to return anytime soon, he said. Additionally, inflation erodes household disposable income to the point that many people don’t have the money for an expensive trip.

“Everyone but the wealthiest travelers is affected by inflation,” he said.