What Will Drive Hawaii Travel

All week we're running a special report on what agents can expect from the travel industry in 2015. Here's our look at the industry as a whole, and here is a series of tips on how to be proactive with clients heading into the New Year. 

Travel Agent recently spoke to some notable tourism industry representatives and learned the latest trends and insights coming out of the Aloha State for 2015.

The Multigenerational Market is Looking to Splurge: Hawaii has basically been a multigenerational hotspot for a long time but what many operators are beginning to see for the first time is this segment’s desire for all things luxury. And they are sparing no expense.

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“Multigenerational travel is one the clearest trends in Hawaii and has been for a long time,” says Jack E. Richards, president and CEO of Pleasant Holidays. “But multigenerational travelers are beginning to move upscale. We don’t see a lot of sales in the lower category hotels. We are seeing huge clusters in sales of four- and five-star resorts.”

And Hawaii will have the properties to accommodate such clients.

Oahu’s Ko Olina resort area is expected to get a boost from the forthcoming Four Seasons hotel.
Oahu’s Ko Olina resort area is expected to get a boost from the forthcoming Four Seasons hotel.

Montage Hotels & Resorts announced last year an expansion of its luxury hotel collection with the addition of Montage Kapalua Bay. In July of 2013, Andaz Maui at Wailea, a five-star resort, officially opened its doors in the Wailea section of Maui.

“Hawaii is looking great for 2015 because the economy is improving, and when the economy improves, people tend to travel a bit more upscale,” says Richards.

Booking Windows Are Lengthening: When the 2009 economic crisis hit, everyone in the travel industry knew that value was here to stay. But everyone knew those booking windows, which in many cases were about three to four weeks out in the year following 2009, would some day return to normal. And that certainly appears to be the case in not only Hawaii but also in many major destinations throughout the world.

Travel Agent spoke to several operators who are reporting booking windows between five and 10 months out, especially for such destinations as Hawaii, the Caribbean and Mexico. Many operators and tourism representatives are attributing the lengthy booking windows to dropping fuel costs.

Matthew Upchurch, chairman and CEO of  Virtuoso, told our sister publication, Luxury Travel Advisor, earlier this month that luxury consumers are booking further out, simply because the properties they want to stay at are filling up at hyper speed. Booking six to eight months out, or even a year out, is not unheard of anymore, says Upchurch.

Hawaii’s Hottest Property in 2015: In November, Four Seasons Hotels and Resorts announced plans for the Four Seasons Resort Oahu at Ko Olina, an integrated luxury beach resort and private residences that will be the jewel in the crown of the master-planned Ko Olina development.

“The arrival of the Four Seasons brings to Oahu the first true luxury brand name. Four Seasons has a standard of luxury and quality that people can expect and rely on,” says Andrey Zakharenko of Always Travel in San Francisco, CA. “Its arrival will bring with it many global luxury customers and Four Seasons loyalists that avoided the island or thought the island did not appeal to them. This will benefit everyone.”

The resort will occupy the site of the existing JW Marriott Ihilani Ko Olin Resort on the northern end of Ko Olina, near the Aulani, A Disney Resort & Spa. It will introduce the first Four Seasons-branded private residences in Hawaii. With the reacquisition of Ihilani from Cornerstone Real Estate Advisors complete, Westbank will take the development lead on the new Four Seasons. Westbank has assembled an internationally acclaimed team to handle the transformation.

LGBT Still Has Room to Grow: After reviewing some detailed statistics recently provided to us by the Hawaii Visitors and Convention Bureau (HVCB), we can attest that same-sex marriages in Hawaii are actually performing ahead of what most experts predicted in 2013.

The University of Hawaii published a report, also known as the LaCroix report, that attempted to ascertain the effect of same-sex marriage on visitor spending. It is important to note, however, that the LaCroix best-case scenario of $217 million in spending was not confined to same-sex marriage spending, but included spending for same-sex honeymoons.

The spending for same-sex honeymoons in Hawaii was not linked to same-sex marriages in Hawaii and the honeymoon spending is therefore not a result of the legalization of same-sex marriages in Hawaii. In any event, there is no data source to calculate actual same-sex honeymoons to Hawaii.

According to the State Department of Health, since the effective date of Hawaii’s Marriage Equality Act went into effect December 2, 2013, 1,086 same-sex marriage licenses have been issued to out-of-state couples (one or both who are non-residents), which accounted for 12 percent (1,086 out of 8,759) of all out-of-state marriage licenses.

According to the HVCB, in the best-case scenario the LaCroix study projected 1,831 same-sex marriage licenses to visitors over the first three years of Hawaii’s law. After seven months, Hawaii has issued 1,086 marriage licenses to out-of-state same-sex couples. Hawaii is on pace to meet or exceed the best-case, three-year scenario set forth by the LaCroix study within the first 12 months and certainly by the end of 2014 (13 months since the legalization), according to the HVCB.

According to the HVCB, it is also important to note that one of the LaCroix assumptions was that 13 states plus the District of Columbia would have legalized same-sex marriages. The report underestimated this number significantly, as today there are 31 states plus the District of Columbia that have legalized same-sex marriages.

Using the LaCroix method for same-sex wedding spending (exclusive of same-sex honeymoons) the total direct visitor spending is calculated as the sum of spending by the couple ($9.8 million) plus the guests at the wedding ($28.7 million) equaling $38.5 million in total.

This total direct visitor spending ($38.5 million) is then multiplied by 1.94 to represent the total economic impact of the direct visitor spending as the dollars spent with wedding suppliers, hotels, etc. continue to trickle through the economy. This multiplier adds $74.6 million to the $38.5 million in direct spending to bring the total economic impact of same-sex weddings to $113.1 million.

Assuming that the LaCroix spending assumptions are correct and the fact that Hawaii is on track to achieve the three-year 1,831 same-sex marriage projection in the first year after the legalization, the state should also achieve the three-year spending projection in the first year.

Signature: Hawaii Is No. 1

According to Signature Travel Network’s recent “What’s Selling Now” survey, Hawaii was the best-selling destination in the U.S. in 2014, and advance sales trends indicate that it will remain so in 2015.

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