the transformation of tourism hawai‘i tourism authority january 10, 2014 2014 hawai‘i thought...
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The Transformation of Tourism
Hawai‘i Tourism Authority
January 10, 2014
2014 Hawai‘i Thought Leaders Conference
2
Adjusting our sails
3
Three Levels of Tourism
$ and Jobs
Access to the World
Purpose
4
$Money: State Tax Revenue
2007 2009 2013$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$1,221
$932
$1,681
State government tax revenue generated(direct, indirect, and induced)
$mill
ion
Note: Calendar Year2002-2012 Actual2013-2014 Estimation
5
$Money: Jobs
2007 2009 2013100,000
110,000
120,000
130,000
140,000
150,000
160,000
170,000
180,000
190,000
172,416
133,618
177,466
Jobs supported(direct, indirect, and induced)
Num
ber
of Jo
bs
Note: Calendar Year2002-2012 Actual2013-2014 Estimation
6
Cyclical Pattern of Our Industry2006/2007
ATA & Aloha Airlines
Bankruptcy
Oil $150/barrel
Wall St. Financial Crisis
Housing Foreclosures
Stay 5 Nights get 2 Free
Airline Consolidations
JAL Downsize
Tsunami
New routes from various markets
New carriers start flying to Hawai‘i, Asiana, Air
Australia
New origination pts incr arrivals
Increase of Seat
Inventory
Arrivals start to increase
R/T off East Coast $500
Allegiant starts to Hawai‘i
More Routes Added
MCI Backlog give false sense of continued
demand
Arrivals hit record high
2012Record arrivals &
expenditures
Hitting Consumer Threshold
2013MCI Backlog
16, 17, 18 remains in ?
787 grounded
Adjustments in seat inventory
Reduction in flights
Increases in airfare
Arrivals flattening outEfforts to
recapture market share
Stay 5 Nights get 4 Free
3 for 1 attraction offer
Further airseat adjustments
Other industries affected
StifledEconomy
Meet Hawai‘i organized
7
Visitor Industry Weathers Crises
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
1970 1975 1980 1985 1990 1995 2000 2005 2010
Num
ber o
f Vis
itor A
rriv
als M
illio
ns
Year
‘09 H1N1
’73-’74 U.S. Recession
’81-’82 U.S. Recession & Hurricane Iwa
‘85 UAL Pilot Strike
‘87 Stock Market Crash
‘90-’91 U.S. Recession & Gulf War
‘92 Hurricane Iniki
‘95 Kobe Earthquake & Oklahoma Bombing
Y2K
‘01-’02 U.S. Recession &
9/11
‘03 SARS
‘07-’09 Recession ‘11 Japan
Tsunami
‘08 Loss of Aloha/ATA,Loss of 2 NCL Cruise Ships,
Leman Brothers& Oil at $150
2012: HTA Target
Visitor Arrivals: 2007- Sept 2013
2007M01
2007M04
2007M07
2007M10
2008M01
2008M04
2008M07
2008M10
2009M01
2009M04
2009M07
2009M10
2010M01
2010M04
2010M07
2010M10
2011M01
2011M04
2011M07
2011M10
2012M01
2012M04
2012M07
2012M10
2013M01
2013M04
2013M07
400,000
450,000
500,000
550,000
600,000
650,000
700,000
750,000
800,000
Visitor Arrival Seasonally Adjusted (Census X12)
Tapering off of visitors since the Summer of 2013.
9
Hotel Occupancy by Island
Jan-1
1
Mar-
11
May
-11
Jul-1
1
Sep-1
1
Nov-11
Jan-1
2
Mar-
12
May
-12
Jul-1
2
Sep-1
2
Nov-12
Jan-1
3
Mar-
13
May
-13
Jul-1
3
Sep-1
340%
50%
60%
70%
80%
90%
100%Hotel Occupancy by Island
State
O‘ahu
Maui
Kaua‘i
Hawai‘i Island
Occ
upan
cy R
ate
10
Visitor Plant Inventory by type of visitor unit
2012
Apt/B&B
/ Hos-tel/Other2%
Condo
16%
Hotel58%
IVU10%
Times-
hare13%
2006
Apt/B&B
/ Hos-tel/
Other
3%
Condo 24%
Hotel 60%
IVU 3%
Timeshar
e 10%
11
Visitor Units by Island (2012)
Hawai‘i
Kaua‘i
Maui
O‘ahu
State
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Apt/B&B/Other Condo Hotel IVU Timeshare
“Supply Side” Implications:
• Need to develop capacity where feasible
• Also longer term: “capacity” may mean new infrastructure and not just new accommodations
• Additional cruise product could support more arrivals within existing visitor plant
Existing Resort-Zoned Future Development Sites
• Ko‘Olina• Kaua‘i Lagoons• Mākena• Princeville• Turtle Bay• Various Kohala Coast Resorts• Banyan Drive• Various Single Property Development Sites
13
Source: Hospitality Advisors LLC
14
“Demand-Side” Implications:
• Need to increase dispersion to the Neighbor Islands
• Improve ease of access• Developing experiences (festivals,
events, sports activities) especially in the off- shoulder seasons and at higher service levels
• Utilization of technology
15
Managing the Hawai‘i Brand
Arrivals from Major Market Areas: Relative Size (2013)
What are other destinations doing to compete with the
Hawaiian Islands?
18
Hawai‘i Logo
• Competitor Logo Exercise – HTA believed that the rainbow brushstroke logo, while it had been unique and
fresh when first introduced, had become lost among the competitor logos. It was believed that other destinations had copied Hawai‘i’s look and feel.
– September 2010: MVNP gathered other rainbow destination logos to verify that this was indeed the case and developed the existing bamboo font logo.
19
Competitive Environment• Mexico
– Mexico is Hawai‘i’s strongest competitor, with two out of every 10 U.S. visitors to Hawai‘i in 2011 also visiting Mexico within the previous three years.
– Mexico welcomed 2.8 million U.S. visitors (by air) in the first five months of 2013 – an increase of +7.2% YOY.
– Mexico promotes itself along similar marketing messages as Hawaii. Mexico’s current campaign, “Mexico, the Place You Thought You Knew” aims to show the diversity of the destination through unique experiences.
• US City Destinations– Hawai‘i also faces competition from US city destinations such as Las
Vegas, a destination with an advertising and marketing budget of nearly $115 million in FY2011-12. They target leisure travelers in the same domestic and international geographic source markets as Hawai‘i.
20
Mexico• Los Cabos Tourism Board’s “Flip for Cabo” Consumer Blitz
– June 26, 2013 from 11am – 7pm at The Grove Los Angeles– Through a partnership with popular luxury flip-flop brand, Havianas,
the event aimed to drive consumer traffic to The Grove's central park area with live entertainment, cooking demos, trip giveaways and a series of authentic Cabo experiences.
21
Mexico• Mexico Taxi Project
– In 2011, the Mexico Tourism Board launched a $25 million campaign designed to overcome Americans’ perception that the country is unsafe.
– An element of the campaign were testimonials shot in a style similar to the TV show “Taxicab Confessions” where visitors were given a transfer home from the airport to discuss their Mexican vacation on camera.
– These testimonials can be found on www.visitmexico.com.
www.youtube.com/watch?feature=player_embedded&v=LN15Q4kCJxw
$43.3 million by the Mexico Tourism Board
+ $10 million rebranding of Vallarta Nayarit
22
Caribbean• In March 2013, Jimmy Buffet announced his partnership with
Wyndham to open a 262-unit timeshare resort in St. Thomas.
23
Hawai‘i could fall into a deeper hole
• No one leader for change we have to do it together
• Fighting for our piece of the pie bake new pies
• Create a shared vision; come up with solutions; commit to execute; see it through
24
Future - Transition Management• Tourism must embrace Hawai‘i and its people –
balance• Sustain tourism while fostering diversification of
our economy – how to leverage existing strengths and infrastructure
• Must assess the global environment: investments, hotel, competition
• Succeed globally, but still be who we are• What policies and incentives are needed?• Execution is key
“The world will turn to Hawai‘i as they search for world peace because Hawai‘i has the key…
and that key is Aloha.”— Auntie Pilahi Paki
ALOHA
MAHALO
The Hawaiian Islands is our Hōkūle‘a