Hawaii Visitor Industry

SUBHEAD: Report on the Current State of Visitor Occupancy Numbers in Hawaii...Trouble Ahead.

By Brad Parsons on 27 December 2008 in Aloha Analytics 

Image above: Honolulu in a blackout. Photo by Josh Bernard
Every year during Christmas and New Year's, Hawaii usually gets a surge of visitors that bring almost all of the hotels to 100% occupancy levels. We in the visitor industry always look forward to it. Traditionally it is a fun time with lots of visitors; actually, usually too many for the facilities and infrastructure, but it usually only lasts 2 weeks, so we go with the flow and enjoy it. 
Last year the Christmas and New Year's rush only lasted 1 week. That was when I knew something was up with the Mainland and Hawaii economies and shortly thereafter decided to start this blog because after those of us who noticed the visitor spending slump that began in Nov. and Dec. of 2007, there was no mention of it by neither the economists nor Lingle nor other elected officials not in December, January, nor February. It wasn't until Aloha and ATA failed in late March because of the slump that the economists and elected officials finally became aware of it.

A couple of months ago traditional economists finally declared officially that the nationwide recession began in December 2007. Right now we are at just such another dramatic turn of events again, and I suspect the traditional economists, Governor, and elected officials are again not aware of it. What is it that is happening now?

This year we don't even have just 1 week of 100% occupancy in all of the hotels and major accomodation properties throughout Hawaii. In particular, two days ago I surveyed some full accomodation properties on Kauai and was shocked to find that many of them are not even at 50% occupancy. The next day, yesterday, I called a friend on Maui with high level contacts inside the visitor industry, and he reported that there are many hotels there that are not at 100% when they normally would be, even though they are having their low level employees tell most inquiries that they are fully booked, but many are not.

Further, the visitors that are there are noticeably on tighter budgets. Furthermore, my friend noted that there are 4 major restaurants/bars in Lahaina that based on the Fall and now this Christmas season are planning on shutting down and going out of business in the next few months. He mentioned those restaurants by name; they are major institutional names, but I will leave them anonymous for now. My point in all of this is that the visitor levels we are not having right now, that we normally would be, is a clear indication of a dramatic decline in revenue to the state now and in the months ahead.

Just like last December and January, when Lingle among other things was proposing the State buy and manage a resort, I don't think Lingle and most of the Legislature have any idea of the significance of what is happening right now in the visitor industry. This doesn't even consider the effect of the nationwide $1.5 trillion Alt.

A's and Option Arm's mortgage industry problems that will begin in about a month or two when the terms of those start to re-adjust. It may not be until March again that the Governor and Legislature acknowledge the significance of what is happening right now because of the fact that they rely on lagging indicators. If you thought 2008 was a shock for the Hawaii visitor industry, you ain't seen nothin' yet, 2009's gonna be a wild ride. The trick to this is to cut your expenses to the minimum and enjoy what we have here that is free.


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