BY DR. RICHARD KELLEY — A question my friends on the U.S. mainland often ask is, “How’s business in Hawai‘i?” My answer these days is, “Great, but I think we have been very lucky for a number of reasons.”
The overall U.S. economy is growing at an anemic 2.3 percent, according to Kiplinger and a number of similar economic reports. Yet, week after week, the occupancies in Hawai‘i’s hotels, particularly those on O‘ahu, continue to lead the nation. For the week ending May 5, O‘ahu hotels led the top 25 markets in the nation in occupancy and room rate increases with occupancies of 83.9 percent, 11.6 percentage points higher than the same week a year ago. The average daily room rate rose 13.2 percent to $186.75 per night, according to Pacific Business News.
Before we pat ourselves on the back or make long-term decisions based on these recent statistics, consider the possibility that the causes of our current market success may be short-term and beyond our control. Here are three factors that we can hardly count on for the long term.
There is no question in my mind that the success of the Hawaii Five-0 TV series has given Hawai‘i a big boost. Its second season just ended with 11.42 million viewers, the third-largest audience of the season, according to Nielsen ratings information released last week by CBS. I watch that program almost every week. In addition to cops, robbers and international terrorist action, it provides absolutely striking, color-enhanced, crisp, high definition (HD) views of O‘ahu’s spectacular valleys, cliffs, surf and beaches. Add to that the show’s distribution in many other countries, including Japan, Thailand, Australia, New Zealand, Canada, the United Kingdom and Germany, to name a few. Priceless!
Over the past three or four years, the value of the U.S. dollar has fallen in relation to the currencies of many countries whose citizens travel to Hawai‘i. These include Canada, Australia, New Zealand, Japan, China, Taiwan and Korea. This has made a vacation in Hawai‘i look far more affordable, and the number of visitors from those nations has risen, sometimes into double digits. Arrivals from Australia jumped 17.8 percent in 2010 and 32.1 percent in 2011. Visitors from Canada were up 16.9 percent in 2010 and 17.9 percent in 2011.
Unfortunately, the economic difficulties that many countries currently face, particularly those in the Euro zone, have driven many to seek refuge in the U.S. dollar, which has consequently risen in value compared with those currencies, making a Hawai‘i vacation costlier.
Terrorism In Mexico
Mexico has long been a strong competitor for travelers seeking a tropical sun-and-sand vacation experience. They have great hotels, excellent service, good weather and low prices only a couple of hours away from most major American and Canadian cities. However, frequent reports of mass murders and mutilations by drug cartels and news of tourists being hijacked while on a shore excursion from a Carnival Cruise ship have been very disturbing. I also was shocked to read of a small group of Americans who flew into an airstrip in Baja only to be met by a group of armed men who promptly relieved them not only of their luggage, but their airplane too!
Outrigger Enterprises Group CEO David Carey believes that these news reports are causing many travelers to take Acapulco, Mazatlan, Cancun and other destinations in Mexico off their list of possible vacation spots and book Hawai‘i instead.
There are probably many other factors that have contributed to the current boost in Hawai‘i visitors, but things can quickly turn the other way, as we have learned very well in the past. We have to remain alert and continue to work on further improving the guest experience.
Hawai‘i’s strength lies in its delightful climate, good tourism infrastructure, safety, great service, and warm Aloha and hospitality. It is that last factor, hospitality – ho‘okipa – that particularly makes Outrigger and OHANA Hotels & Resorts stand out. Based on the concepts of our founders, Roy and Estelle Kelley, we have a tradition of making our customers feel very, very special, whether they are in Hawai‘i, Guam, Fiji, Australia, Bali or Thailand. And we’ll soon add Vietnam and China to that list.
Let’s keep up that tradition of Aloha and ho‘okipa. Then we’ll do well no matter what is on television, what the value of the U.S. dollar is or what is happening in Mexico.