Hard Times Expected to Continue for the Hawaii Visitor Industry

Governor Ige’s unilateral revision of the Safe Travels program on November 24th combined with Kauai Mayor Kawakami’s withdrawal from the Safe Travels program has put a damper on visitor travel to Hawaii. Ige’s revision requires arriving travelers to have their negative test results in hand before their flight departs or face a 14-day quarantine. Sadly, Governor Ige did not consult any of the leaders in the visitor industry prior to issuing the revision. The pre-departure test result requirement created new uncertainty for travelers, as testing partners were not able to guarantee that results would be available prior to departure. At the same time, rates of COVID-19 infections were soaring on the Mainland, including Hawaii’s key West Coast feeder markets. These developments have resulted in many cancellations and a noticeable drop in visitor arrivals, as noted in Erik Kloninger’s analysis below of visitor data.

During the week preceding October 15, statewide visitor arrivals had averaged 3.0% of October 2019 levels. Within a week, daily visitor arrivals equaled 18.5% of 2019 levels before dipping below 15.0%. Daily visitor arrivals averaged a little more than 20% of 2019 levels in early and mid-November before spiking to about 30% in advance of Thanksgiving. Starting on November 24, when the Safe Travels program was revised, daily visitor arrivals decreased rapidly and have been ranging between 16% and 18% of 2019 levels since the start of December. Note the rise and fall of visitor arrivals below.
Reservations, Cancellations, and Marketing

There have been many cancellations and the booking pace has slowed since the implementation of the pre-departure testing requirement. End of year holiday (and normally peak season) reservations are not coming in as hoped, and our colleagues are hearing that revenue managers’ expectations for Q1 and Q2 2021 have been lowered. Meanwhile, spending on marketing is being pushed into Q3 and Q4 in conjunction with revenue projections. 

We are interested to see the level of hotel re-openings given the new, lower numbers of visitors. Properties such as the Grand Hyatt on Kauai, which re-opened in November, has closed again because of Mayor Kawakami’s withdrawal from the Safe Travelers program. We suspect his proclamation could affect other islands as well since we learned from the 2018 Kilauea eruption that Mainland visitors don’t always differentiate between islands.
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