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Despite record visitor spending, some businesses not seeing effects

Kelvin Kay
Wikimedia Commons

Waikīkī and resort areas across the state are bustling again this summer.

Despite lower visitor arrivals than in 2019, visitor spending has set new records this year. The state Department of Business, Economic Development and Tourism reported visitors spent $1.56 billion in May — a nearly 11% increase from May 2019. In April, visitors spent 21% more than at the same time in 2019. And March saw a 2.5% rise — totaling $1.53 billion.

That spend is also reflected at hotels. The Hawaiʻi Tourism Authority reports hotels have seen record revenues in key indicators, such as average daily room rates, and revenue per available room.

Restaurants in resort areas are also seeing an uptick in business.

"We're up 38% in our first five months of this year versus last year," said Ryan Tanaka, CEO of Giovanni Pastrami in Waikīkī. "I think that holds true for just about everyone (in Waikīkī), because as visitors come through — everyone's getting their share of the market."

Tanaka, who is also the chair of the Hawaiʻi Restaurant Association, says the return of visitors has helped businesses in resort areas, but he anticipates the return of international markets — such as Japan — will help enterprises in nearby communities.

"Pre-COVID, there were 1.5 million Japanese visitors a year, spending about $2 billion," he said. "Last year, we had 24,000."

"The return of the Japanese visitor, the return of the international visitor, is welcome news to so many different businesses," Tanaka added.

In the past month, air service between Hawaiʻi and Japan, and New Zealand and the state, resumed after a two-year hiatus.

But despite the record-setting visitor spending, some businesses are still waiting to see the impact.

"The idea that we're going to just sit back, and reap the benefits of increased tourism hasn't really panned out," said Christopher Cook, owner of Broken Boundary Brewery in Kalihi. "What we're finding is that we got to really get after it, and go and try and get it somehow."

Broken Boundary opened on the same day bars and restaurants were ordered to close at the beginning of the pandemic. The company survived the pandemic, but business in 2022 has been up and down.

"The holidays were great, and we saw good sales," Cook told HPR. "And then a big dip in January, February. A little bit of a blip in March, April, around spring break. And then it's been dipping again."

Cook says there was anticipation that June would be the month the brewery would see a jump in sales, but that didn't happen.

In the past year, Broken Boundary created a small wholesale distribution network. That brings in a steady stream of revenue, but the brewery's production remains limited.

The effects of inflation, the war in Ukraine, and ongoing supply chain issues are being felt at the brewery.

"Our raw goods costs have gone up, and we're trying hard to keep our prices to the consumer at the same level," Cook said. "We're certainly getting pinched... We started getting fuel surcharges on our deliveries from our local vendors."

Tanaka says he's hopeful the rest of the year will shape up for local businesses. But he notes restaurants are still struggling, and owners are concerned.

"Many are optimistic, and they're opening restaurants, [but] they're cautiously optimistic because there could be another strain," Tanaka told HPR.

"What happened last summer was we saw blockbuster sales during the month of July. And then, when the summer ended, we got hit with Delta — that changed everything, right? It slowed down the Christmas season. And then right after, we got hit with omicron. So I think people are guarded right now in their feeling of optimism."

But as a business owner, Tanaka is anticipating July and August to be "blockbuster" months for his restaurant and other Waikīkī eateries.

Casey Harlow is an HPR reporter and occasionally fills in as local host of Morning Edition and All Things Considered. Contact him at charlow@hawaiipublicradio.org or on Twitter (@CaseyHarlow).
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