One year after catastrophic wildfires ravaged Lahaina, Maui's sluggish recovery is weighing heavily on the Aloha State's overall tourism performance.
Tourist arrivals and spending statewide have dipped every month during the first half of 2024: Just under 4.8 million visitors arrived in Hawaii through June, a 3.7% decrease from 2023, while their spending was down 4.8%, according to the Hawaii Tourism Authority (HTA).
Much of that decrease is due to Maui, where total visitor arrivals were down 23.8% year over year through the first six months of the year, while visitor spending had dropped more than 24%, despite concerted efforts by tourism officials and stakeholders to revitalize the sector.
Likewise, hotel data from CoStar indicates that occupancy in Maui for the first half of 2024 was down roughly 1.5%, to approximately 66%, while the destination's average daily rate (ADR) fell 10.5%, to roughly $553, over the same period.
"In Maui, the recovery is definitely a lot slower than expected," said Emmy Hise, CoStar Group's senior director of hospitality analytics. "And occupancy has been down quite a bit during these summer months, when we typically see more leisure visitors."
Maui's hotel performance has been a drag on Hawaii as a whole. According to the HTA, statewide hotel occupancy was essentially stagnant at 74.7% through the first half of the year, while statewide hotel room revenue was $2.8 billion, down 2.3% year over year.
"Hawaii is definitely seeing a slowdown in domestic leisure demand," said Hise, adding that a continued lag in the pandemic-era return of Japanese tourists has further exacerbated the state's tourism challenges. (She pointed out, however, that this year's surge in business, convention and group demand has helped insulate Oahu.)
Jack Richards
Jack Richards, CEO of California-based tour operator Pleasant Holidays, confirmed that negative impact from the Maui wildfires have been felt across the entire state.
"We're not seeing improvement, and it's impacting all the islands," Richards stated. "We thought it would be a one-year recovery, but we don't see it getting better till 2026."
According to Richards, Pleasant Holidays' bookings for Hawaii are down double digits for every month through the end of 2024, with the exception of the festive season, which is showing a modest 2% increase compared to the previous year. However, he cautions that even this slight uptick is measured against a relatively weak holiday performance in 2023.
"The travel advisors we're speaking to say that they're just not getting the demand," Richards said, adding that some advisors report that hesitation about "going into a disaster zone" persists.
"As we hit the one-year anniversary of the fires, they're [uncomfortable with the idea of] celebrating a wedding anniversary or a honeymoon on Maui," Richards said. "They don't want to go somewhere where people are still hurting. It's a perception issue, and I'd also call it a courtesy issue."
High hotel rates hurt competitiveness
Richards also cited high hotel prices as a potential deterrent. While Hawaii's rates have dropped over the past few months, they still remain well above pre-pandemic levels.
And according to Hise, Maui has the highest 12-month ADR in the nation, with the island's ADR up almost $170 over 2019 levels.
"The hotel prices have not abated that much," Richards said. "And when you do a side-by-side comparison between Hawaii, Mexico, Caribbean and others, it's painfully obvious who has the better value."
Significant rate cuts, however, are unlikely. According to Mufi Hannemann, CEO of the Hawaii Lodging and Tourism Association, many of Hawaii's hoteliers are up against a triple challenge: higher operating costs, ongoing recovery from pandemic-related revenue losses and, for Maui properties, additional revenue setbacks from last year's wildfires.
"You're not going to see a big drop in rates," Hannemann said. "Instead, we're encouraging hotels to offer some kind of value-add -- a second night free or third night free. It's a delicate balancing act, but people recognize that if you do pay top dollar, you'll have a quality experience here, and that's what we're trying to maintain."
Hannemann also emphasized the importance of targeted marketing efforts, citing the May rollout of a campaign launched by the HTA and its partner organizations, including the Hawaii Visitors and Convention Bureau.
"It's a much more welcoming message," Hannemann said. "And it's one that underscores that we want visitors to return, especially to Maui."
The campaign, which runs under the tag line "The People. The Place. The Hawaiian Islands," is targeted toward top feeder markets like Southern California and is currently running across digital and social channels.
Lei-Ann Field
"It really focuses on the people and culture that makes the Hawaiian Islands so special, showcasing our lei-makers, chefs and others across various industries that touch tourism, some more directly than others," said Lei-Ann Field, senior director of visitor public relations and communications at the Hawaii Visitors and Convention Bureau.
"Over the past few years, [our message] has been about taking care of the place and being respectful and mindful, and that's still a layer, but this campaign is more inviting than in the past," Field added. "We're just trying to let visitors know that it's not only OK to visit, it's a great time to come, and we welcome visitors."