Hawaii tourism

Lackluster tourism in Hawaii increases hotel losses

Holiday traffic in November — the first full month of the test program before Hawaii Safe Travels arrived — didn’t help Hawaii hotels much.

Just 22.1% of available hotel rooms were occupied in November, according to new data released by Hendersonville, Tennessee-based STR.

The 72.1% decline in statewide occupancy from November 2019 was the smallest monthly decline since April, when Hawaii hotel occupancy fell by 88, 9%. Still, statewide occupancy in November was well below the 55-60% occupancy level that most hotels must achieve to achieve profitability.

Part of the problem for hotels in Hawaii is that fewer passengers are staying there. Additionally, constant changes to the Hawaii Safe Travels program have caused confusion in the marketplace, resulting in cancellations of existing reservations and a slowdown in future reservations.

Tourism is not expected to improve anytime soon, exacerbating the already bleak economic fallout that has left Hawaii with the highest unemployment rate in the nation.

From October 15 to December 17, Hawaii Safe Travels screened 617,889 inter-island and trans-Pacific travelers. However, only 429,018, or about 69%, were visitors. Some 263,717 or 61% of visitors said they came for vacation or pleasure. Only 167,771 of the travelers checked, or 27%, planned to stay in a hotel and of these, 151,481, or about 25%, were visitors.

The Hawaii Tourism Authority reported that 11,069 out-of-state passengers arrived in Hawaii on Thursday. HTA said only 5,203 of Thursday’s transpacific passengers said they came to Hawaii for a vacation.

Arrival rules

Governor David Ige on Thursday reduced the quarantine to 10 days from 14 days for travelers without exemptions from the state’s travel entry requirements. But the reduced quarantine length is unlikely to do much to support travel demand or counteract the negative impacts of other recent travel entry changes.

Since Nov. 24, trans-Pacific passengers bound for Hawaii who cannot show an approved negative pre-departure test upon arrival have not been allowed to bypass quarantine, even after their test results are available. And since Dec. 2, Kauai has not allowed inter-island or trans-Pacific passengers to bypass the county quarantine.

“Nobody wants to come to Hawaii and quarantine for 10 days,” said Keith Vieira, director of KV & Associates, Hospitality Consulting.

“They don’t want to risk a pending test either,” he said. “It’s just ridiculous to treat people who have done everything right so badly. Hawaii’s tourism brand is taking a hit.

Hawaii Lodging & Tourism Association President and CEO Mufi Hannemann said the confusion surrounding the Kauai order is also creating a downturn in tourism across the state.

“People don’t necessarily understand the differences between the islands,” Hannemann said. “Also, the change is off-putting to many of our travelers who like to book multi-island trips.”

A body of visitor industry-dependent organizations sent a letter to Ige on Thursday urging him to increase the window during which travelers could take their pre-arrival test from three days to four or five days.

They want Ige to approve a provision that would allow travelers with approved pending tests completed within the appropriate time frame an additional 24-48 hour window to wait for their test results to be uploaded to the Safe Travels app before leaving. for Hawaii to avoid being subject to the mandatory 10-day quarantine.

They also urged Ige to make testing available upon arrival in Oahu through the mobile testing lab at Daniel K. Inouye International Airport for passengers whose pre-arrival test results have not yet been uploaded. on the Safe Travels website.

The letter was signed by HLTA, Hawaii Chamber of Commerce, Hawaii Agricultural Foundation, Hawaii Farm Bureau, Hawaii Restaurant Association, Hawaii Tourism Wholesalers Association, Hawaii Transportation Association, Activities and Attractions Association of Hawaii (A3H), ILWU Local 142, Waikiki Improvement Association. , Retail Merchants of Hawaii and many other organizations.

Hannemann said Hawaiian Airlines, Alaska Airlines, Delta Airlines, United Airlines, Southwest Airlines and American Airlines support the measure and have agreed to waive rebooking fees for travelers with pending test results who need of the additional 24 to 48 hour window.

Ige’s office did not respond to a Honolulu Star-Advertiser request for comment on the letter.

Companies hard hit

The groups say time is running out. Tourism projections prior to Oct. 15 indicated Hawaii would receive approximately 2.7 million visitors by the end of 2020, but Hui said in its letter to Ige that recent changes to the testing schedule ahead of the arrival now made this unlikely.

“Local hoteliers have reported a sharp increase in cancellations since November 24, ranging from a dozen cancellations at one small property to more than 10,000 room nights canceled at properties in one management group in one week,” says the letter. “Our travel partners believe they are losing thousands of potential visitors to ever-changing rules that lack consistency and reliability. Some hotels have had to adjust their reopening times due to the recent changes, which has further delayed their ability to bring workers back.”

Market conditions prompted Expedia to announce last week that it planned to close its Local Expert offline concierge business in Hawaii at the end of January.

“COVID-19 has put additional stress on our business and the entire travel industry. When resorts reopened this year, we had the best intentions of rebuilding our business in destination markets,” Expedia said in a statement. “While we remain committed to the activities sector and continue to offer activities for purchase online, as these experiences enrich and add value to any customer journey, this move, while challenging, is necessary.”

Already this month, Hawaii HIS Corp. extended furloughs and announced that layoffs could take place next month. Montage Kapalua Bay in Maui brought most of its employees back to work, but extended furloughs for 43 workers. The Grand Hyatt Kauai Resort, which reopened Nov. 1, closed again Dec. 7 in response to Kauai’s order, which resulted in hundreds of immediate furloughs for employees.

Empire Airlines, doing business as Ohana by Hawaiian, plans to begin laying off 64 workers on or about January 30. Southwest Airlines also warned that pending collective bargaining, beginning March 15, it may involuntarily lay off a customer service agent at Daniel K. Inouye. International airport.

The November hotel occupancy results reported by STR show that Hawaii’s hospitality industry and other visitor-dependent businesses aren’t just growing. Hotel occupancy last month in Hawaii was just 2.1 percentage points from October, the first month passengers were allowed to bypass a mandatory travel quarantine.

And November’s occupancy was only 1.8 percentage points above September’s rate and was even a bit below August’s occupancy – months before Safe Travels Hawaii launched. October 15.

The average daily rate paid for a hotel room in Hawaii in November was nearly $230, down 12% from November 2019. Revenue per available room (revPAR) fell to nearly $51, a decrease of 75.4% compared to the previous year.

RevPAR, which is the price at which each available hotel room rents regardless of its occupancy status, is considered the most telling metric of hotel performance.

By comparison, STR reported that the U.S. hotel market’s occupancy rate in November was 40.3%, down 34.5% from November 2019. The average daily rate fell 27.7% to nearly $91, and revPAR was down 52.6% to nearly $37.

Among the 25 major U.S. markets, Oahu had the lowest occupancy level in November at 22.6%, down 72.4% year-over-year.

Oahu posted the highest average daily rate at just over $167, down 26.7% from November 2019. However, Oahu’s November revPAR was $38, down from 79.8% compared to the previous year.

HTA reported last week that data from Global Agency Pro, an online travel distribution system, showed the pace of travel agencies booking for future arrivals fell to 84,604 in December from 219,836 in December 2019. The decline in bookings continued in the third quarter for the United States. , Japan and Canada, although there was some improvement for Australia in the third quarter of next year.