Why tourism will improve more than economists predict

Hawaii state economists, who predict more visitor spending but no increase in the number of visitors, will be wrong, and wrong in a way that will please them very much - the situation will be a bit better even than their new, slightly more hopeful, forecast. I make that confident prediction, despite the conspicuous lack of initials after my name, unless you count "Jr.," based on another report put out by a different office in the same state department: the rolling three-month count of scheduled passenger airlift to the islands. For March, April and May combined, the state Department of Business, Economic Development & Tourism counts 2,327,310 seats of air capacity to Hawaii. That's 151,044 more seats in December, January and February. It's 5.6% more than in March, April and May 2009 combined. Here's the breakdown by destination, with year-before comparison:

• Honolulu: 1,611,531 +2.4%.
• Kahului: 421,924 +14.9%.
• Kona: 178,216 +13.1%.
• Lihue: 112,651 +7.9%.

Here's more detail on passenger capacity from our biggest sources of visitors:

• LAX 541,112 +13.1%.
• Narita 300,567 +4.2%.
• SFO 266,238 +5.3%.

The San Francisco Bay Area will also send more than 70,000 seats that start from Oakland and San Jose. As for Narita, I left out Osaka and Nagoya capacity, but Osaka will be almost as much as last year and Nagoya will be sending more capacity here, with the result that although Tokyo will send more than 300,000 seats, total Japan capacity will be more than 400,000. In the second tier we find fewer seats from Seattle and Phoenix but more from Vancouver and Dallas:

• SeaTac 145,132 -17.1%.
• Phoenix 122,579 -4.5%.
• Vancouver 83,079 +27.4%.
• DFW 66,600 +7.2%.

In the third tier we find Continental Airlines, American Airlines and Korean Airlines are still betting on Hawaii:

• Houston 46,831 0.0%.
• O'Hare 46,064 +18%.
• Seoul 35,328 +2.4%.

Capacity will be down from Sydney and Manila, but by small amounts. Taipei airlift diminishes significantly and will not apparently be much of a factor in Hawaii tourism this spring. Flying more seats to a destination is no guarantee that those seats will arrive with humans in them. But this is enough extra capacity that the airlines would have to be hugely, remarkably wrong in guessing demand for us not to have a net increase in arrivals. Since DBEDT forecasted a more than 2% increase in visitor spending based on a flat number of visitors, the large increase in airlift strongly suggests that visitor revenue will be better than that. Now let's see if it is.

Comments

[DDB]

Howard, as an employee of AA I hope we can succeed with Hawaii. I'm waiting to find out when we will return our nonstop flights to HNL from Chicago. I would go to HNL right before peak if I could get a seat. This industry to me has almost bottomed out. I guess we could say the economy goes hand in hand with our business. I don't know how much further this economy can go down. But I hope it goes back up soon. Also, Howard if you can or want to, check out Puerto Rico. They are really hurting with cuts in the travel industry there, just before P.R. was going to make a tourism turnaround.

[The Caribbean has had a worse time of it than Hawaii over the past two years. They're waiting for economic improvements in the U.S. East, especially Florida. HMD]

[DDB]

More not so good news. AA union is walking away from the table on March 8. As a final move to a possible strike. Stay Tuned!!!!