By AUDREY McAVOY
HONOLULU — Visitor spending in Hawaii dropped 0.7 percent in July compared with the same month last year, even though 4.6 percent more travelers visited the islands, the state’s tourism agency said Thursday.
It’s the first time spending has dropped since November 2011, when it fell 1.4 percent.
Travelers from Japan led the declines as the yen continued to weaken against the dollar. A stronger dollar and weaker yen makes trips to the U.S. more expensive for travelers from Japan.
Japanese visitors spent about $198 million in July, about 19 percent less than in July 2012, the Hawaii Tourism Authority said.
The number of travelers from Japan also dropped for the first time in nearly two years, declining 2.9 percent to about 128,000.
Japanese travelers to Hawaii handed over about 98 to 100 yen in exchange for $1 during most of July this year. That’s about 25 percent more than they had to pay last year, when they only needed about 79 yen to receive a dollar.
The yen has dropped largely because of policies adopted by Japanese Prime Minister Shinzo Abe — dubbed “Abenomics” — to revive Japan’s economy. The policies have generally lifted Tokyo stocks and lowered the yen since late last year.
Mike McCartney, CEO of the Hawaii Tourism Authority, said the agency expects the sector to continue to grow during the second half of the year. But he said the industry must work hard to attract travelers.
“We must be cognizant of the strengthening dollar and the overall rising cost of a Hawaii vacation,” McCartney said.
in a statement. “We must be innovative and work harder to remain price competitive, while offering a quality and authentic visitor experience that best highlights our people, place and culture.”
Overall, visitor spending totaled $1.31 billion in July — down from $1.32 billion in July 2012.
Each visitor spent about $185 on average each day, nearly 4 percent less than a year earlier.
McCartney stressed the industry has done well, pointing out visitor arrivals are up 5.5 percent and spending is up 5.7 percent so far this year even though 2012 was a record-breaking year for the industry.
But he said the state would need to invest in Hawaii as a destination to keep the momentum going.
Travelers from the western region of the U.S. grew 3.8 percent in July, while they spent 0.4 percent more than a year ago.
The Canadian market was a bright spot. The tourism authority said 3.3 percent more Canadians came to Hawaii in July and spent 10.6 percent more while they were here.