Forecast: Tourism to stay solid through 2017

LIHUE ­— Chris Holmes, owner of Kauai Bound in Kalapaki, said business has been good. Really good.

This month, he’s on track for a 30-percent increase in activity at his golf and beach gear rental and sales establishment.

“I think it’s because of the number of cruise ships that are coming in and planes coming in,” he said.

He’s right. And more people are on the way.

A University of Hawaii research organization is forecasting a slight decrease in visitor stay times and an increase in visitor arrivals for Kauai through 2017.

The Economic Research Organization at The University of Hawaii said in its county forecast that tourism will see additional healthy gains on the Neighbor Islands for the next two years, before rising occupancy and costs begin to bring down growth rates.

The average length of stay for visitors in 2012 on Kauai was 7.53 days and increased slightly to 7.64 in 2013. It’s forecast at 7.7 days this year.

Carl Bonham, UHERO executive director and UH economics professor, attributes the length of visitor stay to the value of traveling to Hawaii combined with visitors staying in non-traditional vacation units.

“It’s also a reflection of the value of coming to Hawaii,” he said. “You take a long flight to get here and if you can afford to, you stay as long as you can.”

Bonham said occupancy at hotels have not peaked.

“The reported occupancy data still has occupancy rate in the 70-percent range, so there’s still some room there to accommodate additional visitors,” he said.

UHERO forecasts visitor arrivals to Kauai to increase to 3.8 percent this year, 3.7 percent in 2016 and 1.9 percent in 2017.

Last year, about 1.1 million visitors came to Kauai, with over half coming by way of commercial flights.

“You’re seeing growth in the forecasted job growth in large areas that service visitor industry,” he said.

Hoang Phan, a visitor from the San Francisco Bay Area, was at Kalapaki beach with his family Tuesday afternoon. He said visiting the island for the first time is the top reason for his family’s nine-night stay.

“We wanted to have enough time to really hit all the sites that we want to cover,” he said. “If we’ve been there before (for vacation), if we’re doing a short road trip somewhere, it’s shorter. For a new location, definitely we’re looking at a longer stay.”

Sue Kanoho, Kauai Visitors Bureau executive director, said visitor growth will be a challenge with Island Air pulling operations from Kauai.

“That’s going to limit the Mainland flights that go through Honolulu for getting to Kauai,” she said. “The good news is we have direct flights.”

Kanoho said Kauai has had headway with an increase of Korean visitors.

“What we did notice is that Korea has 1,000 people last year and this year they have 2,000,” she said.

The U.S. and Canada alone totaled just under a million visitors last year at 984,000 people, while visitors from Asia outside of Japan totaled a little over 10,000.

Bonham said that although Island Air will not be offering inter-island flights from Kauai, direct flights from the Mainland will sustain growth.

“That makes it more challenging in the inter-island market, but the really big news for this summer and into the fall is an increase in direct flights from the Mainland,” he said.

Bonham said visitors have more spending money because of low fuel bills, like gas prices.

“You’re starting to see an increase in consumer confidence in the U.S,” he said.

Bonham said the increased number of jobs is another contributing factor to more visitor spending this summer.

“Consumers are more optimistic on job prospects,” he said. “All that comes together looking like it’s going to be a strong summer. Hopefully with increased spending, increased arrivals.”

Bonham said rising costs and infrastructure problems might deter visitors from the island.

“Another thing that we’ve talked about some with people on Kauai is overall problems with infrastructure,” he said. “It’s a burden for residents as well who deal with traffic jams and congestion that’s associated with peak summer months.”