Latest news with #JerryGibson
Yahoo
01-04-2025
- Business
- Yahoo
Softening Hawaii visitor arrivals reflect wobbly consumer confidence and higher prices
GEORGE F. LEE / GLEE @ / MARCH 6 U.S. economic uncertainly is growing and travel prices are rising, which doesn't bode well for Hawaii tourism. Visitors to Waikiki pass a window display at Macy's on Kalakaua Avenue. 1 /2 GEORGE F. LEE / GLEE @ / MARCH 6 U.S. economic uncertainly is growing and travel prices are rising, which doesn't bode well for Hawaii tourism. Visitors to Waikiki pass a window display at Macy's on Kalakaua Avenue. COURTESY PHOTO Jerry Gibson 2 /2 COURTESY PHOTO Jerry Gibson GEORGE F. LEE / GLEE @ / MARCH 6 U.S. economic uncertainly is growing and travel prices are rising, which doesn't bode well for Hawaii tourism. Visitors to Waikiki pass a window display at Macy's on Kalakaua Avenue. COURTESY PHOTO Jerry Gibson Visitor arrivals to Hawaii were lackluster in February and early spring, meaning that there is less momentum heading into the peak summer season. Hawaii's international market is still down, and its core U.S. market is softening faster than expected with the percentage of U.S. households planning to travel dipping below 2024 and 2023. That stings since Hawaii's top visitor source market is the United States, which represented 75 % of Hawaii's visitor arrivals in February. What's the problem ? U.S. economic uncertainty is growing while travel prices are rising. The 'Portrait of American Travelers ' 2025 spring edition indicated that high prices are the primary reason leisure travelers might choose not to visit Hawaii. It doesn't bode well for Hawaii that these trends are happening as U.S. travelers are making summer plans, and international arrivals haven't recovered enough to offset the market. At the same time, recent leadership shake-ups at the Hawai 'i Tourism Authority have left the agency without a designated interim chief brand officer when tourism leaders say a centralized force is needed to coordinate and maximize the state's marketing efforts. Chris Kam, president and chief operating officer at Omnitrak, said the company's Travel Market Penetration Index, which provides early insight into the percentage of U.S. residents who travel each month, showed that after a resilient start in January, demand for overall and discretionary U.S. domestic travel slowed in February. Don 't miss out on what 's happening ! Stay in touch with breaking news, as it happens, conveniently in your email inbox. It 's FREE ! Email 28141 Sign Up By clicking to sign up, you agree to Star-Advertiser 's and Google 's and. This form is protected by reCAPTCHA. Compared seasonally, he said market penetration for February dipped to 73.7 %, compared with 78.8 % in February 2024 and 82.5 % in February 2023. 'Consumer confidence as reported by the U.S. Conference Board weakened, and the U.S. Travel Association's travel price index rose, so you've got economic uncertainty and rising travel prices hitting the market at the same time, ' Kam said. 'The number of U.S. residents heading on international trips was relatively flat in February, and passenger traffic through TSA checkpoints grew 1 % nationwide, suggesting that the upper end of the market was able to maintain a flattish performance in February, while the lower end fell out.' He said Hawaii is considered a destination for the upper end of the U.S. market, but 'flat is not great. That's a cause for concern.' Keith Vieira, principal of KV &Associates, Hospitality Consulting, said Hawaii's hotel industry expects a weak first quarter, which is disappointing given that 'January started out with a great deal of resilience.' Worse yet, Vieira said Hawaii's travel booking window is about two to three months out, so the weakness and uncertainty are affecting the pace of peak summer bookings. 'We've still got a ways to go, and we need to stay the path, ' he said. 'We need to have consistent brand marketing so our message and our narrative is one that our visitors are going to be moved by and creates demand for Hawaii over time. We need to build booking pace that gives us compression.' Vieira expressed concern that the HTA has not designated a new interim chief brand officer since the March 21 departure of Daniel Naho 'opi 'i, who was working as HTA's interim president and CEO as well as its chief brand officer. 'We are missing a consistent marketing message that hotels, airlines and wholesalers can attach to for their own marketing, ' Vieira said. 'When that happens you will see some turnaround and increase in the booking pace. The destination is still strong. People want to come here, but everyone else is after them and we have got to give them reasons to choose us.' So far, Hawaii is losing ground. Kam said that with Easter taking place in late April this year, March is expected to slow even more than February. Jerry Gibson, president of the Hawai 'i Hotel Alliance, said hoteliers saw some spring break business in March, but 'it was mediocre at best.' 'I think we are kind of in a transitional time where we don't know exactly where we are going, ' Gibson said. 'Our pace is very short term. The stock market is getting blasted on a daily basis. Tax season is coming up, and people are saying maybe it's best to hold off. I'm trying not to be a 'Debbie downer, ' but I don't see a lot out there.' Gibson said February is usually one of the better months for Hawaii hotels because of Valentine's Day and group travel but that it took some hits due to a drop in stays from the lucrative government sector, which is a base segment of business for the industry, particularly on Oahu. 'We are very wary about what's going on, and it really started in February. What happened was a lot of (government workers ) got their credit cards taken away, so they are obviously not traveling, ' he said. 'That segment, which is probably up to 40, 000 rooms or so into Hawaii a month, was off about 55 % for the month of February.' Preliminary February visitor data released Thursday by the state Department of Business, Economic Development and Tourism aligns with the trends that Kam and the hoteliers are reporting. The daily count of visitors in Hawaii rose in February along with their average daily spending—but not much over February 2024, when the state was still reeling from the Maui wildfires' negative impacts on tourism. In February, DBEDT reported that on average there were 240, 525 visitors daily in the Hawaiian Islands, up 1.9 % from the daily visitor census in February 2024 and a decrease of 2.5 % from February 2019. Since the number of days in February differs depending on leap years, DBEDT chose to compare the average daily census of visitors. It was a leap year in 2024 and included an extra day in February. When compared with February 2024, the average daily census of visitors this February increased 2.7 % in Hawaii's core U.S. West market and was up 7.4 % from the U.S. East, Hawaii's second-largest visitor source market. The average daily census for Canada, which since the pandemic has jockeyed with Japan for the title of Hawaii's top international market, was down 1.4 %. DBEDT Director James Kunane Tokioka said in a statement that the department will continue monitoring Canadian visitor arrivals. 'Canada and Hawaii have a long-standing relationship, and we are cautiously optimistic that although Canadian travel to the continental U.S. may decrease, it may not mean that Hawaii visits will decrease in the same manner, ' he said. 'At this time we do not see flight cancellations from Air Canada or WestJet.' The average daily census in February declined 14.5 % from Japan compared with February 2024, and it fell 4.9 % from the category DBEDT calls 'all other markets, ' which includes all international markets outside of Japan and Canada. Gibson said Japanese hotel bookings also were sluggish due to continued fuel surcharges and unfavorable exchange rates. He said Canadian business also fell off in the later part of February, which added to Maui's struggles to continue recovering from the Aug. 8, 2023, wildfires. 'We're also impacted by the wildfires in California, which is our breadbasket since a lot of our travelers come from there, ' Gibson said. A bright spot in DBEDT's February visitor statistics was that visitors spent more in February, which supports Hawaii's tourism-dependent economy. Visitors to Hawaii spent $61.7 million per day on average in February, up 8 % from February 2024 and a 24.4 % rise from February 2019. Tokioka said average daily visitor spending in February rose to $256.40 per visitor, the highest level historically in nominal terms. However, Gibson noted that some of the higher prices reflect the higher costs that hoteliers are paying for labor and goods rather than actual profits.
Yahoo
03-03-2025
- Business
- Yahoo
Hoteliers push back on proposed tax hikes
JAMM AQUINO / 2022 Visitors go through the main entrance at the Diamond Head State Monument park. 1 /2 JAMM AQUINO / 2022 Visitors go through the main entrance at the Diamond Head State Monument park. STAR-ADVERTISER /2021 Visitors wait at the Hanauma Bay Nature Preserve's admission booths. 2 /2 STAR-ADVERTISER /2021 Visitors wait at the Hanauma Bay Nature Preserve's admission booths. JAMM AQUINO / 2022 Visitors go through the main entrance at the Diamond Head State Monument park. STAR-ADVERTISER /2021 Visitors wait at the Hanauma Bay Nature Preserve's admission booths. Hospitality industry members from the Hawai 'i Hotel Alliance and the American Hotel &Lodging Association are seeking to draw attention to current and looming challenges facing their industry and are pushing back against proposed transient accommodations tax increases that are still moving forward in several bills at the halfway mark of this year's state Legislature. Their advocacy effort was upfront at the Hospitality Show : Hawai 'i, which HHA and AHLA put on Thursday in Waikiki. HHA President Jerry Gibson, AHLA Executive Vice President Troy Flan agan and Kekoa McClellan, spokesperson for AHLA and chief advocate for HHA, were joined by a ballroom full of hospitality industry members. Other prominent speakers at the event included Gov. Josh Green, Honolulu Mayor Rick Blan giardi, Maui Mayor Richard Bissen, Kauai Mayor Derek Kawakami, state Rep. Adrian Tam, Honolulu City Council member Tyler Dos Santos-Tam and more. The event took place the same day that the state Department of Business, Economic Development and Tourism released preliminary tourism numbers, which indicated that visitor arrivals and visitor spending rose in January from January 2024. However, at this time in 2024, visitor arrivals were weak following the August 2023 Maui wildfires. In January some 792, 177 visitors came to the Hawaiian Islands, up 3.8 % from January 2024, according to DBEDT's preliminary statistics. Likewise, total visitor spending, without taking inflation into account, rose to $1.89 billion, up 4.7 % from January 2024. DBEDT Director James Kunane Tokioka said in a statement, 'Hawai 'i's tourism industry had a positive start to the new year with growth in both total visitor arrivals and visitor spending in January 2025, which marked the sixth consecutive month of increases in these key indicators.' Hospitality industry members from HHA and AHLA, however, painted a less robust picture of statewide tourism performance, especially at hotels, and expressed concern about legislation that is still moving that would potentially increase the TAT, which they said is already too high. Don 't miss out on what 's happening ! Stay in touch with breaking news, as it happens, conveniently in your email inbox. It 's FREE ! Email 28141 Sign Up By clicking to sign up, you agree to Star-Advertiser 's and Google 's and. This form is protected by reCAPTCHA. The Senate Ways and Means Committee on Thursday amended and passed Senate Bill 1396, which addresses climate change and mitigates further impacts by authorizing the funding of resiliency projects. It establishes the Climate Mitigation and Resiliency Special Fund and the Economic Development and Revitalization Special Fund. It also increases the TAT and allocates a portion of it to support the fund. WAM also amended and passed Senate Bill 1395, which establishes a Climate Mitigation and Resiliency Special Fund and allocates the interest earned on balances within the Emergency and Budget Reserve Fund to the special fund as well as allocating a portion of the revenue from the TAT to the special fund. The House Finance Committee on Wednesday amended and passed House Bill 504, introduced by Rep. Linda Ichiyama (D, Fort Shafter Flats-Salt Lake-Pearl Harbor ). The bill seeks to require a $20 TAT to be levied per night for each furnishing of transient accommodations in exchange for points, miles or other amounts provided through a membership, loyalty or rewards program. It also appropriates funds to the Department of Land and Natural Resources for protection, management and restoration of the state's natural resources. Green did not directly address these bills when he spoke at the event. He thanked hoteliers for their support during COVID-19 and in the aftermath of the Maui wildfires. Green told them that he understood that Maui had essentially 'suffered a concussion ' after the wildfires, and said that is why he released an extra $6.3 million to support tourism. 'What did Maui show us ? It showed us that we are quite vulnerable. What did we see in Los Angeles ? Exactly the same thing, that we're vulnerable. This is an era where there are additional variables for us to consider. And I know that this is tough because this is our industry here, this is our lead industry, ' he said. 'What we know is that the state of our planet is more volatile. The storms are stronger. The land is drier, and I don't think it's just a cyclical change.' Green has previously told the Honolulu Star-Advertiser that the state needs at least $200 million annually to respond to climate change, especially following the deadly Aug. 8, 2023, Maui wildfires, which killed 102 people and all but wiped out Lahaina. 'I do not want to panic people with the talk of the TAT increase. I just want to say that these are the things that we are discussing, and to the extent that that happens or that we allow it to happen or we work together to have it happen—make the case, and I will honor it to reinvest in the industry so that the benefit actually outweighs any of the pain, ' he said during Thursday's tourism event. The idea of forming a Climate Mitigation and Resiliency Special Fund was supported in testimony to WAM and the House Finance Committee by many conservation and sustainability groups and state agencies, especially those that deal with natural resources, climate change and emergency resilience. Hawaii's short-term rental advocacy groups did not provide testimony. But the hotel industry and its partners continue to push back on any increase in the TAT, which industry leaders like Gibson describe as regressive, especially given a recent 'Travel &Leisure article saying right now, as is, we are the priciest tourism tax in the world.' Gibson said as tax inclusions rise, visitors might opt for less expensive, illegal short-term rentals or move to a competitive destination. 'The unintended consequence of any TAT increase could reduce total taxes or backfire if it undermines the overall tourism market. A reduction in hotel stays reduces all ancillary income, dining, entertainment and services, ' he said. Gibson said he and other leaders from HHA instead support earmarking a percentage of existing general fund collections, to which the TAT contributes more than $1.1 billion of revenue, to fund climate change and Department of Hawaiian Home Lands efforts. Gibson said the industry also supports models like Hanauma Bay Nature Preserve, which protects resources by utilizing a reservation system and charging visitors to enter. They also suggest making cruise ships pay the TAT when their guests are spending the night in ships that are docked in Hawaii. But Gibson said the low-hanging fruit when it comes to funds is to crack down on illegal short-term rentals by building on Act 17, which passed in 2024 and empowered county governments to effectively enforce short-term rentals. Stephanie Donoho, administrative director of the Kohala Coast Resort Association and an HHA consultant for Hawaii island, said data from software firm Granicus shows that enforcement of short-term rentals in Hawaii County could generate millions more in transient accommodations tax revenues. She said Hawaii County's 3 % TAT collections resulted in $24 million for the 2023-2024 fiscal year, and of that amount, $17 million was for the Kohala Coast Resort Association alone, and she said she talked to other hoteliers in Hilo and Kona whose properties paid more than $1 million each. Donoho said Granicus data shows that there are 8, 737 unique short-term rentals in Hawaii County and that TAT revenue generated for the county would hit more than $22.5 million at 68 % occupancy. 'That tells me that there's a vast underpayment by short-term rentals, ' Donoho said. Increasing short-term rental enforcement is one point where Green and Hawaii's hospitality industry are in strong agreement. 'We all want to jack up short-term rentals, and the reason, if I may be blunt, is that we simply have too few homes in our community and we are struggling to find homes for local families, ' Green said. AHLA's Flanagan said illegal short-term rentals are an issue for the hotel industry and communities nationwide but that the stakes are higher in Hawaii, where land and affordable housing are limited and the impacts on the community and traffic are greater. 'Hawaii is like the extreme example, ' Flanagan said. Gibson said several headwinds have emerged during and since the COVID-19 pandemic, and most recently, he said, federal job cuts are a concern. 'In January we have already seen a 55 % drop in government, military and government contractors to the islands, ' he said. 'This is excellent base business for many of the hotels that has simply dried up and gone away.' He added that the Hawai 'i Convention Center's closure for repairs in 2026 for large groups, known as citywides, also will 'really hurt Oahu, which will miss those 15 % to 20 % incentive and association groups.' Gibson said these new and coming challenges are on top of the continued lag in international business, particularly Japan, 'which is still 45 % of what it was in 2019.' He said the negative impact of the Maui fires on tourism continue to remain front of mind, as do the Los Angeles fires, since 42.6 % of Hawaii's total hotel room nights come from California. While DBEDT's January visitor numbers show year-over-year improvement, they still don't reflect a full recovery to the pre-pandemic 2019 level, which Gibson said is concerning given that there has been no cumulative growth for the past six years. When compared with pre-pandemic 2019 levels, January visitor arrivals were recovered to only 96.9 %. While DBEDT reported visitor spending rose 17.2 % from 2019, Gibson said that isn't adjusted for inflation and hasn't kept up with new expenses, which he says have increased at least 25 % during the same period. A major expense has been new union collective bargaining agreements, which Gibson said over the course of the contract includes a $10-per-hour raise in every employee category. He said that brings the average housekeeper's annual earnings with benefits and tips to $85, 040. He said the average bartender will earn $165, 000 a year in wages, tips and benefits.
