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Hawaii RoundtableOctober 29, 2007 By: Mark Rogers Travel Agent
What are the challenges facing Hawaii tourism? Travel Agent magazine asked the state's heavy hitters for their insights
TRAVEL AGENT RECENTLY INVITED SOME OF HAWAII'S MAJOR TOURISM PLAYERS to participate in a roundtable discussion of Hawaii's tourism picture—past, present and future. Travel Agent was represented by Kerry Cannon, Mark Rogers and Suzanne Craven, plus Simone Chris of Abbott Communications. Our panelists were Jonna Jackson of Classic Vacations; Dean Johnson of Creative Leisure; Mike Paulin of Aqua Hotels; Rob Solomon of Outrigger Hotels; Jay Talwar of the Hawaii Visitors Convention Bureau; Michael Troy of Starwood Hotels; and Marsha Wienert, Hawaii's state tourism liaison. The agent point of view was provided by Mary Lou Lewis and Sandy Portnoy of HNL Travel.
Mark Rogers: Occupancy figures are down in Hawaii. Why do you think that's so? Is the Hawaii product diversified enough? Do we need more boutique hotels? Do we need more moderately priced hotels?
Jay Talwar: If you look at the most recent polls, we're still the number one destination for North American leisure travelers. If you look at the arrival numbers to the destination, they are close to the all-time high. So the demand is incredible. When we look at accommodations and accommodation types, we have seen some softening.
Marsha Wienert: Our guests really have more choices today than they have ever had in regards to choosing their accommodations. Timeshares are up by double digits, as are condo rentals and cruise ship visitors. It's really just the traditional hotel that has decreased some.
Mike Paulin: Our boutique hotels have seen an increase. The downturn is a bit of a misnomer after five years of rocket growth. We have to adjust for that.
Sandy Portnoy: I noticed this summer that the prices in the traditional hotels were very high. And the hotel is now competing with the timeshare brand. There's a Marriott timeshare and a Marriott hotel. There's a Westin timeshare and a Westin hotel. So you're competing against yourselves.
Rob Solomon: We've lost about 800,000 international visitors from the high point of years past and from North America for different reasons, mostly having to do with airlift and other things going on in the world. We've lost a lot of business from Japan and just about everywhere. For the destination it's not a very positive story. Usually when that happens it has to do with currency exchange. Right now, you have a weak dollar and you should have an all-time high in visitors from many parts of the world.
Michael Troy: We're actually seeing that, though. Our non-Japanese visitors have some of the highest growth numbers we've ever seen. European numbers, and Canadian, in particular, have gone through the roof. The strength of the Canadian dollar has made a big difference in our being able to grow that market. Same with Australia and some of Europe.
Dean Johnson: When I ask agents what's hot, without exception, it's Europe, (specifically) Italy. And against the dollar, it's certainly not a bargain destination. So it's about price, value and experience, and those three elements really do work hand-in-glove. There has been a tremendous reinvestment in Hawaii's accommodation infrastructure and in the infrastructure in general for the guest experience. Speaking from a tour operator's point of view, the airlines have never been stingier with seats to bring people here.
Mike Paulin: As we talk about the new product in Hawaii, there's new product in the Caribbean, there's new product in Florida, there's new product in Mexico. We haven't seen a lot of pull from Oceania or the Far East for our target travelers, but certainly from Europe, and then it's definitely occurring in Mexico. Mexico did a great job with all-inclusives. Expedia has told us about the four-day vacation being the new vacation limit. People aren't taking seven-, eight-, 10-day vacations, which, if you're coming to Hawaii, makes far more sense. But if you're in Los Angeles and you can afford five days to kill, it's a short one-and-a-half-hour flight to get to Mexico, and it's an all-inclusive for $1,500 for a family of four. Do the math.
Mary Lou Lewis: We should bring more agents to Hawaii. They've got to see it, because it's totally different from five years ago.
Mark Rogers: What are the major changes?
Marsha Wienert: Waikiki has changed so much, and it's fabulous now. I keep saying, don't send them to the other islands all the time. Let them stay in Waikiki for a while, because it really is special.
Mark Rogers: In years past, the pattern was to fly into Honolulu and then immediately go on to the other islands. Is that pattern changing?
Jay Talwar: I did some focus groups last year across the country. As they started to understand the product, they said it would be great to spend three days in Waikiki, seven days on Maui, or three days there, seven days on another island, and just do that at the front end or the back end, but make that part of their plan to come to Hawaii, because they wanted to have that kind of diverse experience.
Mark Rogers: The way I understand it, a lot of Hawaii's visitors from the East Coast of the U.S. are arriving by cruise. What needs to be done to get more fly-in visitors from the East Coast?
Jonna Jackson: Direct flights.
Jay Talwar: We've seen direct and nonstop flights from the east drop, and Atlanta just dropped a few. Cincinnati has also dropped. We're holding on to New York and St. Louis, which is wonderful. The big issue has to do with some airlines coming out of bankruptcy. Hopefully, they'll take a look at the numbers again and come back to Hawaii.
Jonna Jackson: For the East Coast traveler, Hawaii is really an inspirational destination. They can go to Europe now much less expensively. So you have to put the price-value relationship back into play for them.
Michael Troy: Some think the Caribbean is like Hawaii. Which it absolutely is not.
Jay Talwar: The big challenge is communicating the essence of Hawaii and delivering the marketing message to someone who's been to the Caribbean and doesn't understand that Hawaii is different. And that's why your readers are so important to us. We need to educate them and to get them out here on fams. We have 70 percent repeat visitors from North America. The good thing is we've got people who are really happy with their experience in Hawaii. At the HVCB, we're studying the universe of folks who fit the profile of people who should be coming or have been coming to Hawaii. Looking at that universe, it's more than 20 million people; 43 percent of them have never been to Hawaii.
Mark Rogers: How do you target them?
Jay Talwar: Through our consumer relations and our travel-trade programs.
Rob Solomon: Travel agents are businesspeople, too. We all do business in terms of revenue, not by how many trips we've sold or how many people got on the bus. So when we talk about numbers, when we talk about "it's a good thing the rates are going up," that's true, as long as the value of the experience is positive. Any destination is expensive if you don't have a good time. When we look at the visitor satisfaction numbers and our own guest satisfaction numbers, a really funny thing happens. The travelers who were the least satisfied were the ones who spent the least.
Marsha Wienert: That means that you have to know your client in order to know what's going to make them happy.
Mark Rogers: In your experience, have travelers booked vacations on their own through the Internet and ended up disappointed?
Mike Paulin: If you buy based upon price, you're going to get what you pay for.
Michael Troy: A lot of repeat customers come back through the direct channels because they've been there, done that. Some of them realize they've made a mistake, that they didn't do all of their homework. The agents are the best representatives. The retail travel agents, even the reservations agents with our wholesaler partners, they are so good at the up-sell.
Marsha Wienert: Going through a travel agent who knows the destination is still the best way for people to ensure that they'll get what they want.
Mark Rogers: There's a trend of consumers wanting more than the beach—they want a cultural experience. The profile of Hawaiian culture has risen quite a bit in the last five years.
Jay Talwar: "Aloha" is something that really got communicated well, that there's a spirit of aloha here and people love their experience. Cultural travelers are frequent leisure travelers. They know they can go to KFC in Chicago and Shanghai and in Paris. They don't want to come here for that. They want to come here for something that's unique, an experience they can't have at another destination. And not just the beach—there's always a closer, cheaper beach.
Sandy Portnoy: The experience is the people and your relationship with those people.
Rob Solomon: Culture is great, but it takes a community and it takes investment to support it, not just from the government side, but from the private sector. And it's not just the reinvestment in the physical product. There's a recommitment to supporting the culture, training the employees, opening up the landscape, revisiting the architecture, bringing the music back into the town. In Waikiki, you're seeing a sea of change. The residents are coming back.
Mark Rogers: So the message is to get the agents here to experience the changes themelves.
Jay Talwar: See what you're selling against Hawaii, and then see Hawaii. I clearly believe the experience you'll see in Waikiki in particular will open your eyes.
Mark Rogers: So it's safe to say, if you haven't been to Hawaii in four years, you're way behind the curve.