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Jul '11

Lingering Effects of Japan Tsunami

Which Hawaii Businesses Are Hardest Hit By Japan Tsunami Tourism Fallout?

Growth in Hawaii Tourism Expected Despite Japan Catastrophe

During the first months of 2011, Hawaii tourism was on pace to surpass the peak year of 2007 when 7.63 million Hawaii visitors spent $12.8 billion in the state. Then the earthquake and tsunami disasters struck Japan in March of 2011 delivering another setback to Hawaii tourism.

A recent First Hawaiian Bank Business Activity Report stated that spending in Hawaii was up in the first quarter of 2011 compared to the same time in 2010 and noted improvements in fourteen of the sixteen sectors that are measured. This included an 18% increase in spending on travel activities and 15% more revenue in hotels.

Despite the March 11 Japan earthquake and tsunami, Hawaii’s hotel occupancy is showing gains due to an increase in visitors from Canada and the U.S. mainland. In March all of the islands saw increased revenue and hotel occupancy with the highest gains on Oahu and the lowest on Kauai.

The State of Hawaii did not suffer any catastrophic damage as Japan did in the March tsunami, though the waves that came from Japan did cause tens of million of damage in the state including damage to homes, ports and roads. Some coastal businesses and hotel lobbies were flooded, boats sunk, piers were damaged and other infrastructure sustained damage.

In a typical year about 18% of Hawaii visitors are from Japan. Before the tsunami the revenue from Japanese visitors for 2011 was projected to be about $2 billion, according to the Hawaii Tourism Authority.

After a disaster the Japanese generally do not immediately travel in order to show respect to those who passed away. For example, Hawaii saw a 12% drop in Japanese visitors after the Kobe earthquake in January of 1995. While tourism from Japan rose by the end of that year, a similar recovery is not expected in 2011 due to the scale of the catastrophe.

To counter the loss of Japanese visitors tourism officials have worked to attract visitors from other areas through renewed marketing campaigns. The Hawaii Tourism Authority is expected to spend more than $3 million for marketing and other programs in key markets in North America, Australia, Korea, China and New Zealand as well as Japan.

As everyone hopes for Japan to begin a strong recovery from the massive disaster, the overall growth in Hawaii tourism is being sustained by other international travelers as well as visitors from the mainland United States.

The increase in the number of Hawaii visitors in 2011 is expected to lead to a gradual increase in Hawaii jobs in the leisure and hospitality industry as well as other sectors that were most affected by the decline in tourism in the last few years.

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