Hawaii tourism drops, with recovery expected in 2024

Demand for travel to Hawaii has fallen, especially on Maui, and travel industry experts say it’s not expected to materially recover until 2024.

Jack Richards, president and CEO of Pleasant Holidays, said travel to Hawaii was up 16.5% for 2024 before the Maui wildfires in August, and is now negative statewide.

“We are off by double digits from October to April. Recovery will build gradually over time, but we don’t believe that we’ll get back to historic levels before May or June,” he said. “Right now, demand is well below historic levels for Maui. It’s the fires, (high) prices and mixed messaging. People are unsure about coming to Hawaii.”

Some of what Richards is talking about is a continuation of what is already showing up in preliminary statistics released Monday by the Department of Business, Economic Development and Tourism. The numbers showed that the sluggish return of visitors to Maui after the August wildfires and to the state from North America caused September arrivals and nominal spending statewide to drop year-over-year for the second month in a row.

Some 651,286 visitors came to the Hawaiian Islands in September, down 7.4% from September 2022 and moving the pre-pandemic arrivals recovery back to 88.5% from September 2019, according to DBEDT data.

Nominal visitor spending, which hasn’t been adjusted to show the relative price over time, fell 9.6% to $1.37 billion in September. However, nominal spending in September was still 10.2% higher than in September 2o19, when it was $1.25 billion.

Year-over-year September results varied across the islands, according to DBEDT data. Visitors to Oahu in September rose 12.5% to 433,209, while nominal spending fell-3.2% to $676.6 million.

Kauai arrivals rose 10.3% to 115,305 in September, and nominal spending increased 28.9% to $224.2 million.

Hawaii Island visitors rose 8.6% to 129,444. Nominal spending on Hawaii Island increased 28.7% to $254.8 million.

However, arrivals to Maui plummeted 57.1% to 94,221 visitors in September, while nominal spending plunged 52.6% to $203.2 million.

DBEDT Director James Kunane Tokioka said in a statement, “The impacts from the Maui wildfires were significant in September 2023 with both visitor arrivals and visitor expenditures down by more than 50 percent for Maui for the month compared to 2022.”

Tokioka added, “Visitor arrivals on Maui in September 2023 (94,221) recorded the lowest since February 2021 and visitor spending of $203.2 million on Maui in September 2023 was the lowest since March 2021.With the reopening of West Maui that started in October, tourism on Maui is expected to improve over the next few months.”

Mayor Maui Richard Bissen recently announced that West Maui, which had been undergoing a phased reopening since the deadly Aug. 8 Lahaina fire, would fully reopen Wednesday. While Maui bookings have improved slightly since then, hotel occupancy at Maui hotels is not even close to normal, said Keith Vieira, principal of KV &Associates, Hospitality Consulting.

“First quarter will probably be back to 50% of 2023 in Kaanapali, but Wailea will be better than that,” Vieira said.

Richards said Maui is a major reason for the decline in September demand as well as future demand for Hawaii as a whole.

But that’s only part of the equation. U.S. travel demand, in general, is undergoing a more pronounced seasonal slowdown than normal. Also, Hawaii is no longer the No. 1 travel destination for Japanese travelers, who since summer have favored South Korea.

While Labor Day boosted travel by U.S. households early in the month, data from the Omnitrak Travel Market Penetration Index showed that demand slowed below prior-year levels for September overall.

Chris Kam, Omnitrak president and chief operating officer, said in a statement, “While the usual seasonal slowdown in September is not surprising, the dip in travel was more pronounced than expected.”

“With September travel penetration aligning more closely with 2021 than prior year levels, residents in communities with overtourism concerns are experiencing some ‘breathing space’ in the Fall shoulder period following a strong summer,” Kam said.

Omnitrak founder and CEO Pat Loui said in a statement that a reason is that “international destinations continued to attract U.S. travelers in September (+18.1%), according to the National Travel and Tourism Office’s year-over-year data.”

Loui added that the “U.S. Travel Association’s Travel Price Index rose +4.4% over prior year levels, adding rising prices to the challenging marketplace conditions facing domestic destinations in September.”

To be sure, Hawaii’s largest tourist source market, the U.S. West, saw September arrivals drop to 329,187. It was a sharp 16.7 % year-over-year drop — however, up 7.6% from September 2019.