Hawaii Island visitor arrivals, occupancy rates drop in May

KAILUA-KONA — Hawaii Island tourism numbers remained reasonable through the month of May, but it will be June and the summer months to follow that tell the tale of Kilauea volcano’s true impact on the county’s most lucrative industry.

According to numbers released by the Hawaii Tourism Authority (HTA), the island saw visitor spending grow by $173.9 million in May, a year-over-year gain of 3.3 percent, despite a dip in visitor arrivals of 1.6 percent.

HTA attributed a substantial portion of that decline to the loss of 6,600 cruise ship visitors as the Norwegian Cruise Line vessel, the Pride of America (POA), skipped several port calls in Kona and Hilo throughout the month.

POA missed one port call on each side of Hawaii Island during the first week of June, but returned weekly through the rest of the month.

The state as whole saw a double-digit increase in both visitor spending and air capacity, according to a release from George Szigeti, HTA president and CEO.

“The growth in both categories is especially noteworthy as May has historically been an off-peak shoulder month for travel to the Hawaiian Islands,” he said. “It’s encouraging to know that both air carriers and travel consumers expressed such confidence in Hawaii as a travel destination during May.”

Air travel capacity, however, is different from the number of travelers actually landing in Hawaii. And visitor spending numbers were aided by significant increases to hotel prices across all islands, reflected in average daily rate figures for hotel rooms, which jumped 5.5 percent on the Big Island in May.

The hotel industry is a good barometer of how tourism is actually faring on each island. Occupancy rates bumped 2.2 percent and 2.9 percent on Oahu and Kauai in May, respectively. Oahu’s islandwide occupancy rate came in at 83.3 percent, while Kauai’s registered at 78.1 percent.

Meanwhile across the Big Island, hotel occupancy dipped 0.2 percent to a rate of 70.6 percent. To provide some context, the Big Island’s occupancy rate set a record high in the first quarter of 2018 at 82.6 percent islandwide.

The Kohala Coast area, the island’s most popular tourist region, saw occupancy rates plummet in May by 6.2 percent to 63.8 percent.

There, the average daily room rate jumped 12.2 percent to $337 throughout the month, indicating that West Hawaii hotels are increasing prices to offset losses in bookings and maintain profit margins as best they can.

Ross Birch, executive director of the Island of Hawaii Visitors Bureau, told West Hawaii Today in mid-May he expected Big Island booking rates for hotels and activity companies to drop by half over the summer based on numbers he collected from dozens of such businesses through a member survey.

June was the month Birch predicted Hawaii Island tourism might begin to see precipitous declines in spending and occupancy rates, a prediction lent some credence by recent Airbnb cancellation figures.

Shane Peters of Peters Communications, which handles public relations for Airbnb in Hawaii, said 21 percent of the online platform’s bookings were canceled between May 3 and June 18. That’s up from a 19 percent cancellation rate he reported between May 3 and June 1.

Hawaii Island’s saving grace may simply come in the form of projected growth rates. The island and the state have set tourism records for several consecutive years.

Carl Bonham, executive director of the University of Hawaii Economic Research Organization (UHERO) and professor of economics at UH-Manoa, spoke to West Hawaii Today earlier this month.

He put projected growth rates in perspective for the Big Island given the facts of a volcanic eruption in the Puna district that has completely cut off access to Hawaii Volcanoes National Park, the state’s most popular tourist attraction, and spread concern to travelers internationally over air quality as the volcano drapes much of Hawaii Island in a haze of irritating, unsightly vog.

“The growth rates were set to be so large, rates in the double digits, that if we get a pause, as long as it’s not the 50 percent loss of business that some people are talking about all summer long, the Big Island will weather this,” Bonham said.

Tourism and governmental officials have mulled for weeks a path to opening a lava viewing area somewhere in or around the park, which could make a substantial difference in tourism numbers throughout what remains of the Hawaiian summer.

Yet despite UHERO’s optimism, the prospects of a lava viewing area, HTA’s reports of statewide tourism growth month after month and a lack of statistics representing a debilitating decline in numbers specific to Hawaii Island, HTA is still poised to move in another direction organizationally.

The HTA board announced Thursday it had voted unanimously to oust Szigeti, its president and CEO, absent cause. He will serve his final day with the organization on Oct. 31.

Rick Fried, HTA chairman, told the Honolulu Star-Advertiser the decision was based on HTA’s ability to hold onto its budget during the current political climate, as well as concerns from across the tourism sector as to Szigeti’s institutional knowledge of the industry.

“There also was some concern from some of the stakeholders in the broader tourism industry, although some were fine with him, about his institutional knowledge of tourism,” Fried told the newspaper.

Szigeti described the board’s decision as “mutual.”