A slow return Erik Kloninger analyzed the recent data from HTA and provided the graphs below. Domestic visitor arrivals remain strong relative to 2019 while international arrivals are edging up with the slow return of Japanese visitors. Japan’s re-opening to foreign visitors in mid-October should bode well for Japanese outbound travel and Hawaii’s visitor industry.   Meanwhile, air seats to Hawaii are staying strong relative to 2019. Air seats from Japan are expected to increase in November. Despite the weakness in the yen, we anticipate a steady albeit slow return of Japanese visitors. The strength in neighbor island hotel performance continued unabated. Contrary to earlier prognostications, the opening of international travel hasn’t resulted in a drop off of US mainlanders willing to pay 50% more per night for a hotel room.  Lodging Conference Takeaways We attended the Lodging Conference last week in Phoenix. I sensed that we’ve exited the post-great recession era of cheap debt and it may not return. In the near term, there will be upward pressure on cap rates and downward pressure on hotel values. Often mentioned was the divide between buyer and seller expectations. Meanwhile, hotel performance has continued to improve and the top line outlook is positive. This is especially true in Hawaii. The recent decision of two prominent Hawaii hotel owners to pull their properties from the market thereby retaining ownership of assets that are dramatically outperforming budget supports this view. Data Source: Hawaii Tourism Authority

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