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Foster Sustainable Tourism
Key Tourism Metrics: Visitors by Air, 2003 & 2004
Source: DBEDT, Tourism Research Branch, Annual Visitor Research Reports. Additional Metrics on Last Page Tourism plays a big role in Hawaii’s economy, accounting for more than 20% of its total economic activity. The performance of the state economy depends on the performance of the tourism sector. Sustaining recent success within the tourism sector will be a key to sustaining ongoing economic momentum. In the past growth in the visitor industry came mainly from increases in visitor counts. However, given limited supply of visitor accommodations, in available infrastructure and workforce, and environmental and social-cultural limits, growth in tourism sector through further increase in visitor counts cannot be sustained. In order for the industry’s growth to be sustainable and to limit its cycles, we should focus more on increasing revenues by promoting more high-end visitor products rather than aiming to increase visitor counts. However, attracting high-spending visitors and ensuring them full satisfaction with their visit to Hawaii is going to be a very challenging task. It will necessitate a major improvement in our existing services to visitors, such as airport service, significant improvement in international airport terminals, transportation between hotels and the airport, quality of hotel rooms, safety and security, and improvements in parks, museums, historical sites and other recreational sites. A more complete discussion of the situation in the visitor industry is attached. Key challenges are summarized below. Determining an optimal level and mix of tourism growth: A key challenge is to determine a sustainable mix of visitors and level of growth that will maximize total revenues over the next 5-10 years and to develop an appropriate strategy to achieve those targets. Given the limited capacity to accommodate a further increase in visitor counts, an obvious choice would be to get more high-end visitors. However, this would require more marketing effort and product enhancement. Limiting down cycles: Major tourism down cycles in recent years have been mainly due to external factors, such as the Iraq Wars, SARs, and terrorist threats, about which there is very little the Hawaii visitor industry can do on its own. Having an optimal mix of visitors (market diversification), new product development (product diversification) and aggressive marketing may limit the severity of down cycles. Improving infrastructure, visitor plants, parks, and other recreational and scenic sites: Visitors make extensive use of our roads and other public facilities. Infrastructure planning and development is mostly based on resident needs with little or no attention to visitors. Airport facilities and roads between the airport and hotels are particularly important. About half of existing hotel units in Waikiki do not meet high-end visitor standards and hence are underutilized. They need to be improved. Regular maintenance and periodic monitoring of state parks and other public sites is important to enhancing visitor experience. Enhancing visitor experience: More than 60% of visitors to Hawaii are repeat visitors. So ensuring their satisfaction when they first visit Hawaii is very important. The proportion of Japanese visitors who are “very satisfied” with the overall experience of their trip to Hawaii is less than 50%. Arrival to, and departure from the airport, checking in and out of the hotel, visit to a local park, service at a restaurant, or shopping at a local mall constitute the visitor experience. Service should be excellent in each case. Another way to enhance the experience is to make it easy for visitors to access and appreciate the ethnic, historical and cultural assets that Hawaii has to offer – starting with an authentic representation and explanation of Native Hawaiian culture and values, and including opportunities to learn about the historical experiences of the many other ethnic groups that make these Islands unique. Creating high-paying jobs: Although tourism makes up more than 20% of total jobs in the state, average wages of visitor-related jobs are among the lowest, compared with wages in most other sectors. This may create shortages of jobs in visitor related industries when economy-wide demand for labor is high. This can be avoided by creating high-paying jobs within the industry through new product development, education and training. One area of special need is more multilingual people to fill jobs where that come in contact with international visitors from mature as well as emerging markets. Developing workforce: With the population aging and increased job alternatives for younger people in new and emerging industries, the visitor industry may face a shortage of workforce in the future. Lack of affordable housing and high cost of living will put further pressure on the available working population. The visitor industry needs workers who are multilingual, trained and knowledgeable in the hospitality industry, and are able to express the warmth of Aloha to people. Given the cyclical and seasonal nature of tourism, there is also a challenge to retain experienced workers. Preserving host culture: One of the reasons why people come to Hawaii is its unique culture, hospitality, foods, traditions, festivals, and diversity. Hence, it is imperative that these unique treasures be preserved, promoted and respected by both local residents and visitors. Efforts and programs should be designed to educate local residents about the contribution the visitor industry makes to their livelihoods and also to mobilize visitor revenues toward the preservation and promotion of the host culture. TOURISM SITUATION ANALYSIS Tourism is at a unique crossroads within the Hawaiian Islands. While there has been recent success within the tourism sector, the challenge will be to avoid the pitfalls and cyclical nature of the past economic cycles. A key driver in the process is the state’s view of what tourism should look like and how fast it should grow over the next 5-10 years? We must begin with “the end” in mind and mandate appropriate pre-planning to ensure greatly improved infrastructure, visitor plants, parks, etc., as well as offering incentives to private industry to stimulate expenditures towards the “new look” of Hawaii. This will directly effect product improvement and expedite the process. Policy direction will dictate how and where capital is spent and what the key goals are. Goals need to be agreed on for such issues as arrival rates, spending, capacity and satisfaction before the tactical steps can be finalized. Assuming limited opportunities to grow capacity and a higher yield preference from our “guests,” leads us to a strategy surrounding these areas as set out below. Sustainable tourism must contain many different components to ensure success. The makeup of tourism in Hawaii today includes new markets and businesses such as: (1) Condo-hotels, (2) Timeshare, (3) Vacation rentals, (4) Residential real estate, and (5) Cruise ships. All of these will continue to evolve. While the real estate sector has grown dramatically over the last 5 years, lodging products still continue to lag in pricing from an inflationary perspective. We need to better understand the balance between all these aspects and to validate how we can enhance the: (1) Airport experience, (2) Infrastructure, (3) Product improvement and differentiation, (4) Resident perception of the industry, (5) Visitor satisfaction, (6) Environment, (7) Workforce development and education, and probably most importantly (8) Perpetuating the host culture within available capital. To limit the down cycles of tourism we need to focus on each of these areas in addition to market diversification and continued concentration on “higher end marketing,” while also ensuring no reduction in air seats to Hawaii. By providing the right balance, higher expenditures, greater length of stay and ultimately higher paying jobs will result. Higher paying jobs will become an even more critical component for the tourism industry for it to remain healthy and to ensure readily available employment in the coming decades. To accomplish much of the above, the focus on appropriate housing, education and maintaining the host culture of our residents will continue to be a priority in a growing market. Without the appropriate attention to wages and affordable housing for the approximately 200,000 employees we have in tourism, the industry will face a shortage of qualified employees as well as run the risk of losing employees to mainland locations that provide better value. With one of the key goals being higher paying jobs, the question remains; how do we reposition our hotels and in what segments to ensure viability and the ability to draw higher paying guests? To keep the positive “halo” effect and the brand of Hawaii fresh, we need to continue to promote the visual and aesthetic uniqueness, an environmental friendly and “green” market as well as “clean” water and air.
Additional Metrics Visitor Plant Inventory – Available Units by County
Source: DBEDT & Hawaii Visitors & Convention Bureau
Existing Visitor Plant Inventory by Type
Source: 2004 Visitor Research Inventory Report, DBEDT
Forecasts of Visitor Arrivals, 2000-2015
Source: DBEDT 2030 Economic and Population Projection Series, Benchmarked to Latest Visitor Forecasts for 2005
Expenditures per Visitor Day by Visitors (by Air) from Selected Geographic Areas, 2003 & 2004
Source: DBEDT, Tourism Research Branch, Annual Visitor Research Reports.
Visitors by Cruise Ships, 2003 & 2004
Source: DBEDT
Overall Visitor Satisfaction by MMA (% of Visitors), 2003
Source: Tourism Research Branch, Annual Visitor Research Report, 2003.
Economic Contributions Generated by Visitor-Related Expenditures
Source: DBEDT, records.
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