This past year was successful on many fronts for retailers/restaurants, the hotel/timeshare and the tourism industries on Kaua‘i. And the prospects for 2004 appear strong for the island business community. “As long as you have a fairly healthy job base
This past year was successful on many fronts for retailers/restaurants, the hotel/timeshare and the tourism industries on Kaua‘i.
And the prospects for 2004 appear strong for the island business community.
“As long as you have a fairly healthy job base and job creation, you should be okay,” said First Hawaiian Bank Economics Consultant Dr. Leroy Laney.
“I don’t see anything on the horizon that is going to be a big damper on the economy in 2004.”
Kaua‘i restaurants and retail
According to recent National Restaurant Association (NRA) data, Hawai‘i restaurant owners predict a 3.5-percent boost in business in 2004 compared to the current year.
But many Kaua‘i restaurateurs believe their increases will be greater than that statewide average.
“Those (forecasted state) numbers typically are conservative,” said Poipu Beach Broiler partner Dan O’Connell.
“We are targeting 5 percent (growth) for next year. We probably had 15 percent sales last year, although 10 percent was due to a rising cost of our products.”
O’Connell feels that effective advertising by organizations like the Poipu Beach Resort Association (PBRA) and direct flights helped contribute to strong sales in 2003.
Another restaurant owner agrees with O’Connell’s assessment.
“I would think that number should be higher,” said Coconuts’ owner Sheila Harty of the statewide figure. “I think business will be even better for us (Coconuts).”
Harty cites a booming tourism market and the fact that more people are eating out as key reasons for stronger projected business next year.
“I also think that since we offer a fairly affordable product, business should be strong for us here,” she said. Coconuts is on Kuhio Highway in Waipouli.
Hawai‘i has more than 3,400 restaurants with 50,000 employees.
“Business was good for us last year,” said Wrangler’s Steakhouse owner Colleen Fayé. “We are also hopeful for this coming year. There seems to be a lot more people moving into Kekaha, so that could increase our traffic in here.”
Wrangler’s is on Kaumuali’i Highway in Waimea.
Hawai‘i restaurant sales this year are expected to reach $2.15 billion, a 1.2 percent gain over 2002. Sales of $2.23 billion are projected for next year.
“We typically have strong summers and a good holiday season,” said Guy.
“My ego says that our business (the kitchen and crew) contributed to the increase in sales. But this year, the Princeville Hotel also came aboard and really helped us.”
The Kukui Grove Center has renovated and remodeled its location and has several new tenants.
Starbucks, which opened on Dec. 19, has been one of the newest attractions at the Center.
“Tenants like Starbucks and Jamba Juice, along with Cold Stone Creamery and Quiznos, will bring a brand new retail experience to Kaua‘i, something that many locals haven’t had before,” said KGC General Manager Wade Lord.
The Coconut Marketplace in Kapa‘a has approximately 65 stores in the center and has been open for over 30 years.
Kaua‘i Hotel and Timeshare industries
Hawai‘i room revenues reached $1.897 billion at the end of the third quarter in 2003 for an increase of 4.7 percent compared to $1.811 billion a year ago.
Kaua‘i continued to exhibit outstanding performance, leading all islands in September and October occupancy with a 7 percentage point gain to 80.2 percent.
“With the increase in direct services (flights to the island) and a number of external marketing services, we definitely have more interest from people wanting to stay on Kaua‘i,” said Margy Parker, the Poipu Beach Resort Association (PBRA) executive director.
“Kaua‘i only visitors that stay here translates to higher occupancy.”
The strong occupancy on Kaua‘i has been due in part to tighter room supply as a result of continued time-share sales that have decreased the number of units available for hotel use, said Joseph Toy, President of Hospitality Advisors.
Parker isn’t sure whether Toy’s view is accurate.
“I think there was a little bit more of a tighter inventory,” she said. “However, it also depends on how they (the Hospitality Advisors) measure occupancy.”
Parker added, “When I look at the overall numbers, I look at the Kaua‘i only segment in addition to length of stay. If you just look at those areas alone, they could support higher occupancy.”
On a dollar basis, luxury hotel room revenue grew by $41.8 million to $949.5 million through September 2003 compared to last year, whereas mid-priced hotels saw the greatest percentage increase in room revenues of 10.3 percent to reach $317.5 million by the end of the third quarter.
Hawai‘i’s hotel industry recorded a 2.4 percentage point increase in occupancy to 73 through September 2003, in line with the September 2003 year-to-date increase in visitor days of 3.8 percent as reported by the State of Hawaii Department of Business, Economic Development & Tourism (DBEDT).
The statewide ADR for Hawai‘i rose by 2.2 percent to $144.88, which when combined with the rise in hotel occupancy led to a 5.7 percent increase in room revenue per available room (RevPAR), or $105.74 statewide by the end of the third quarter 2003.
“Consecutive months of record-breaking domestic visitor arrivals, visitor days and lengths-of-stay during the summer helped to offset the substantial losses in Japanese arrivals that occurred for most of the year,” said Toy.
When comparing Hawai‘i to the top 25 hotel markets nationwide, Hawai‘i had the highest occupancy for the first nine months of the year at 73 percent.
Despite the comparatively strong performance so far in 2003, Toy continued to maintain a cautious outlook as does Sue Kanoho, the Kaua‘i Visitors Bureau executive director.
“Direct services are very important to us (Kaua‘i),” said Kanoho. “It is the wave of the future.”
Kanoho also cited two factors as key to the future.
“We have to try and shore up or stabilize the inter-island business as opposed to letting it fluctuate on and off,” said the executive director.
“…We are also very excited about the Kauai Coconut Beach Hotel and are looking at the Coco Palms and the Poipu Beach Hotel. We would like to see them get back up on line. They are extremely important to our destination.”
Kaua‘i Tourism market
Kauai Visitor Bureau (KVB) officials were impressed with a successful 2003 visitor market.
“Things are strong in terms of length of stay and visitor spending,” said Kanoho.
The KVB Executive Director cited Kaua‘i’s visitor day total which was up five percentage points from last year, a total that was tops in Hawai‘i.
In addition, Kaua‘i ranked at the top in both average daily visitor spending and first-time visitors.
Visitors spent an average total of just over $143 per day, almost a dollar more than any other island.
Fifty three percent of visitors to the island were first-timers which was 15 percent higher than another island in the state.
In information gathered by the KVB over 2003, the highest rated aspects of a vacation to Kaua‘i were beaches, golf courses and sightseeing trips.
The lowest rated aspect of the vacation was the use of public facilities.
According to Kanoho, timeshare continues to grow in importance especially among repeat visitors while the average expenditure per person, per day among honeymooners was significantly higher than any other visitors.
Other KVB statistics show that U.S. East tourists tend to plan their trip further in advance while 25 percent of visitors use frequent flyer miles for some or all of their flights to the island.
According to Kanoho, satisfaction at the Lihu‘e Airport was rated as “very high.”
Finally, many visitors to the island perceive Kaua‘i to be an excellent destination for “wellness travel.”
In a study conducted by the KVB during the peak season (July and August) 2003, 99 percent of domestic vacationers rated their trip in Kaua‘i as “excellent” (70 percent) or “above average” (29 percent), the highest ratio seen in recent years.
Those 99 percent also stated that they were likely to recommend Kaua‘i as a travel destination, a ratio higher than any other previous survey.
The Kaua‘i trip features with highest visitor satisfaction rating were: beaches, golf courses, sightseeing tours, accommodations and visitor information.
Eighty percent (of respondents stated that they were likely to return to Kaua‘i in the next five years.
Thus far in 2003 (January-October), average domestic length of stay in Kaua‘i reached 7.05 days, an increase of 3.5 percent over the same period last year.
Business Editor Barry Graham can be reached at 245-3681 Ext. 251 or mailto:bgraham@pulitzer.net
