Tovin Lapan
Through the first six months of 2018, Hawaii's tourism numbers are looking strong, backing up bullish predictions at the beginning of the year, but the ongoing volcanic eruptions on the Island of Hawaii appear to have dampened numbers there.
In general, the Aloha State's tourism industry did well across several key metrics for the first half of the year. Both visitor spending and state tax revenue from tourism were up roughly 11% compared to the first six months of 2017, to $9.26 billion and $1.08 billion respectively.
Gains were seen across all of the islands' major feeder markets, including Canada and Japan, with double-digit percentage increases year over year in visitor spending from U.S. East, U.S. West and combined spending from all other international markets.
Visitor arrivals increased 8% in the first half of 2018 compared to 2017, with the state falling just fewer than 18,000 visitors short of hitting the 5 million mark. Overall, arrivals by air increased by more than 8% while cruise ship arrivals fell roughly 6%.
While all four larger Hawaiian Islands realized growth in visitor spending and arrivals in the first half compared to last year, the most recent numbers indicate travel to Hawaii Island is falling off the pace. In late April the volcano Kilauea rumbled into a period of increased activity that continues today. There have been earthquakes, fissures spewing lava and towering clouds of ash. Hawaii Volcanoes National Park has been closed for more than 80 days.
"Hawaii's peak summer travel season began with a strong month of June. All of the islands recorded double-digit increases in visitor spending, except for the island of Hawaii," HTA president and CEO George D. Szigeti said in a statement. "The ongoing eruption of Kilauea volcano clearly made an impact on travel to the island, particularly with a nearly 20% drop in day trips during June."
In June, while Oahu, Kauai and Maui still experienced steady year-over-year growth, the Island of Hawaii welcomed approximately 5% fewer people (149,817 total) than in June 2017. That contributed to a 1% drop in visitor spending for the month.
"Our marketing partners, Hawaii Tourism United States and Hawaii Tourism Japan, have been aggressively implementing special promotional programs to encourage travel to the island of Hawaii and to showcase the multitude of attractions and activities to enjoy island-wide," Szigeti said.
Air capacity to Hawaii also continues an upward trend, with 7% more trans-Pacific air seats
in June compared to last year, with double-digit percentage increases in capacity from Oceania and U.S. East markets.
While accommodations of all types benefited from the increased traffic, several markets exhibited greater interest in rental homes in 2018. Compared to last year, the percentage of visitors who stayed in rental homes increased by 24% or more for U.S. West, U.S East, Canadian and Japanese travelers. Visitors from Japan, with a 37% increase in rental home stays, showed the most significant boost in rental home bookings.
Still, according to the Hawaii Hotel Performance Report from the Hawaii Tourism Authority, hotels in the state registered the highest revenue per available room (RevPAR) and average daily rate (ADR) of the top U.S. markets in the first six months of 2018.
Through the first half of the year RevPAR in Hawaii grew to $229 (8% increase), ADR rose to $280 (6% increase), and occupancy increased to 82%, up more than 1% over the first six months of 2017.
For comparison, New York City's RevPAR for the first half of 2018 was $205, with San Francisco/San Mateo at $192. Hawaii ranked second nationally for occupancy, trailing only New York City's mark of 85%.
"For Hawaii to earn the number one ranking in the U.S. in both RevPAR and ADR as the market is rising nationally is a significant achievement for the state," said Jennifer Chun, HTA tourism research director. "Most U.S. markets reported RevPAR growth in the first half of 2018. Very few markets were down compared to a year ago."
Maui, buoyed by strong numbers from the luxury-hotel-laden Wailea area, led the state in RevPAR at $313 and ADR at $398, both up approximately 11% from 2017. Kauai, despite the April flooding on the north shore, led the state in first half of the year growth with a 15% increase in RevPAR to $233 and 12% increase in ADR to $295. Oahu hotels maintained the state's highest occupancy rate over the first six months at 84%.
On Hawaii Island RevPAR and ADR grew 10% and 8% respectively over the first half of 2017, and occupancy nudged up roughly 2% to 77.5%. However, in June, even though only one hotel (The 33-room Volcano House inside the national park) is closed due to the impact of Kilauea, RevPAR on the island fell to $164, an 8% decline, and ADR was approximately the same as in June 2017. Occupancy on the Island of Hawaii fell 6% in June to 69%.
"Two notable RevPAR growth streaks for island of Hawaii hotels were broken in June," Chun said. "The island overall saw its 31-month streak of continuous RevPAR growth, going back to November 2015, ended. In addition, the Kohala Coast resort's streak of continuous growth over the past eight months ended in June as well."
Despite the dip in numbers on Hawaii Island, overall the state had its strongest June numbers on record with RevPAR at $227 and ADR at $277.
"Every class of hotel property and each island county reported increases in RevPAR," Chun said. "Maui's performance was very strong with Wailea being exceptional. The island of Hawaii benefited from five good months to begin the year, which offset a downturn in occupancy during June while Kilauea volcano was continuing to erupt."