Decline in Maui room bookings could cost the state more than $40 million in taxes

MAALAEA, Maui — Alan Ayers toured the Maui Ocean Center aquarium in Maalaea with his family the day after the anniversary of last year’s devastating Maui wildfires.

Ayers’ love affair with Hawaii goes back to his father’s days with the National Park Service at Hawai‘i Volcanoes National Park. But the Utah resident said Maui is his favorite island, and he has returned at least seven times since the Aug. 8, 2023, wildfires.

“We left Maui Aug. 7, 2023, and went to Kona,” he said. “As I listened to the news, it’s hard to explain the emotion that I felt. We cried all day.”

Ayers said the family initially paused their Maui travels but began returning as soon as possible because “we really, really love Maui. There’s never not a good time to be on Maui. We still feel that way.”

But a significant downturn in Maui visitor industry performance shows that not all visitors share that sentiment. Some still believe they are not welcome as the government asked tourists to leave in the immediate aftermath of the disaster, and some residents and celebrities fortified that message on social media. Others do not understand geography enough to realize that most of Hawaii was unaffected by the wildfires, and even on Maui there is plenty to see and do outside of the 5-mile Lahaina Wildfire Impact Zone.

And there are those who worry that their joy and celebration will be viewed as inappropriate.

Data presented by Jennifer Chun, director of tourism research for the state Department of Business, Economic Development and Tourism, at the July 25 Hawaii Tourism Authority board meeting show that even now, about two-thirds of likely Hawaii visitors are aware of the wildfires that killed at least 102 people and caused an estimated $5.5 billion in damage.

While the fires did not affect the likelihood of these travelers visiting Hawaii within the next two years for nearly 6 out of 10 people, Chun said 26% indicated they are not going to visit in the next two years because of the fires, and 8% said, “I was going to, but I’m not going to visit anymore.”

Marketing push

The dampening in travel sentiment for Maui is bringing down tourism statewide and is a key reason Hawaii visitor industry executives appealed to the Hawaii Tourism Authority Board to add $1.6 million to the Hawaii Visitors and Convention Bureau marketing budget to conduct a marketing saturation campaign Sept. 15-22 in Los Angeles, Hawaii’s top source market for visitors. Angela Vento, general manager of the Wailea Beach Resort, said Maui’s hotel occupancy during the summer, which is typically a peak period, is down about 20%, “so the hotels on Maui, which typically run 85% to 90% occupancy, are in the 60% (range).”

Vento added that group business is down about 40% compared to 2023 because, from October through the first quarter of this year, there was a base of group business that had been on the books before the fires.

Keith Vieira, principal of KV &Associates, Hospitality Consulting, said advance bookings for the remainder of the year on Maui are negative compared to other years. Moreover, Vieira said once the American Red Cross and other disaster-­related occupancy leaves, Maui hoteliers will have to fill 250,000 to 300,000 room-nights to make up the difference.

“If we don’t, just that business alone is a $40 million loss in taxes to the state, and that’s just the hotel portion of (transient accommodations tax) and (general excise tax). It doesn’t include all the GET on the ancillary restaurants, tours, etc., so it’s probably a $60 million to $70 million hit,” he said.

HTA Board Chair Mufi Hannemann, who is also the Hawaii Lodging &Tourism Association president and CEO, called the numbers “compelling” and said he was pleased the board saw the benefit of approving funding.

Vieira estimates the campaign, which follows a lackluster summer, will be augmented with $40 million to $60 million in additional marketing paid for by Hawaii’s visitor industry.

Vento estimated that 96% of Maui’s business comes from the U.S. West Coast. She said a unified message is needed to turn business around, much like in 2009 when the state and industry partnered to address the U.S. financial crisis. She said she has traveled extensively across the U.S. mainland since the fires and still hears that customers are unsure about traveling to Maui.

“They hear about ‘malama’ and taking care, and they are just looking to enjoy,” she said. “We believe this saturation will help us amplify the message that, ‘You are welcome and we have value and we want you to come now.’”

New campaign

HVCB Chief Marketing Officer Jay Talwar said the saturation campaign will utilize HTA’s newest branding campaign, “The People. The Place. The Hawaiian Islands,” which was developed to appeal to the mindful Hawaii target traveler “who exhibits behavior that suggests that we would like to invite them to visit our islands.”

He said the campaign, which uses high-profile residents on each island, is focused on “really allowing the people of Hawaii to share what is unique about their lifestyle, their place that they call home and how it affects the way that they have been brought up and the values that they have today.”

Hannemann said the campaign also is likely to get a boost from Gov. Josh Green and Maui Mayor Richard Bissen, who have said they are prepared to join the welcoming effort in L.A., which could include opportunities in connection with the Los Angeles Rams Sept. 22 home game against the San Francisco 49ers.

Reaching visitors

Businesses like the Maui Ocean Center also are investing in their own independent marketing.

Tapani Vuori, president and director of the board at the Maui Ocean Center Marine Institute and general manager of the aquarium, said the center was outside of the fire’s immediate impact zone but experienced a significant downturn due to the “don’t come to Maui” messaging, which paused the post-COVID-19 recovery.

“By 2023, we were expecting a more successful year than 2019, and then the fire hit,” he said. “By Aug. 22, 2023, we had fallen to 116 paid guests” — a decline of more than 97%.

Vuori said business has come back but is still down about 24%.

Mark Matthews, Maui Ocean Center director of marketing, said, “It’s very volatile. There’s so much chaos in the market. The requirements of spending have increased and (visitors) are being more choosy with their activities.

“We are trying to increase the avenues in which we are converting and generating profit, and maintain our ability to keep our people employed because essentially that’s the bottom line,” he said. “I’m proud to say that we haven’t had to let anyone go because of this. That doesn’t mean we aren’t scraping.”

Michael Takamura, Maui Ocean Center director of sales, said the attraction is working with wholesale travel sellers such as Pleasant Holidays and AAA to ensure clear messaging is reaching visitors. Takamura said he recently met with travel agents in Texas who told him they appreciated hearing a clear travel invitation from Maui islanders.

“HTA is saying, ‘We want you to Malama Hawaii,’ but when (the visitors) see the videos they actually think malama means to pick up rubbish or plants. But when we explain to them that ‘malama means to care for, and the way you show you care for is actually by coming to visit because your visit cares for Maui, and (it’s) how you are supporting the economy and its people.’ They are like, ‘Why couldn’t someone just say that from the beginning?’”

Trickle-down impact

The loss in airline passengers and hotel guests have had an enormous trickle-­down impact across Maui’s economy, with food and beverage venues and activities and attractions among the hardest hit.

The Maui Butterfly Farm in Olowalu a few miles from Lahaina town initially closed out of respect for wildfire victims. Geoff Wilson, who owns the business with his wife, Siobhan, said they realized it was time to reopen and contribute to the community’s healing after a tour was requested by a displaced Lahaina resident and her family who lost their own butterfly garden when their home burned down.

Wilson said the farm is located just outside of the immediate burn zone; however, guests dropped dramatically after the fires and have settled at about 50% of the pre-fire volume.

The couple had to cut staff by about half and personally take on more of the labor-intensive work of raising butterflies and the plants that support them. As Wilson sees the metamorphosis of caterpillars turning into butterflies, he is reminded that Lahaina is undergoing its own transformation.

“Everybody realizes that if we don’t have tourists come back, businesses are just going to go out of business, and I think a lot of them already have and a lot more are about to,” he said