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Tourism Carries "Sub-Par" Hawaii Economy

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Visitor Forecast for 2013:

Sources: Hawaii Tourism Authority forecast and State Department of Business, Economic Development and Tourism projections.


Coming Soon: A Wave of Rich Chinese

Get ready for China’s luxury travelers. The small stream is building each year and will soon become a powerful river, says Christine Lu, who serves that elite community and is also a consultant to the Hawaii Tourism Authority.

Lu is a co-founder and CEO of Affinity China, a private Chinese network based in Shanghai and New York that provides luxury, lifestyle and travel opportunities for its members.

An estimated 1 million Chinese visitors came to the U.S. during 2012, Lu says, including 100,000 to Hawaii.

Lu says the number of Chinese luxury travelers to Hawaii increased 17 percent in 2012. “They’re sophisticated, travel-savvy and under 45 years of age,” she says. “… They’re very tech-savvy, 92 percent participate in social media, they’re online and they’re in search of deeper, meaningful travel experiences.”

But, she says, there are problems: A shortage of Chinese signage and other appropriate infrastructure in Hawaii, and Chinese credit cards don’t always work here. Lu also warns that the Hawaii tourism industry needs to make Chinese visitors feel more at home.

“One tourist said, ‘This is a very comfortable place to visit – if you’re Japanese,’ ” she explains.

Lu says she was guiding a group of affluent business owners from China on a shopping spree in Hawaii. A woman stepped up to the cash register at one luxury shop with a bunch of expensive items, but found that her Chinese credit card didn’t work.

“There was no way to pay,” Lu says. “They didn’t accept their Chinese credit card.”

The good news is that the Pinyin, or China UnionPay bank card, is now accepted as payment in 104 countries, including the United States.

A decade ago, China had fewer than 5 million credit cards. Today, there are 250 million, though their owners still use them sparingly, according to an article on BuyBuyChina.com, a website about Chinese retail, branding, business strategy and consumer behavior.

Lu says China has more than a million millionaires. More than half want to emigrate or get their children in American schools, she says.

She tells the story of one China-based businessman, whose son recently graduated from an American college, who worried that his son might not get a job in the travel industry. “So he was considering buying a hotel for him to run,” she says.

“They spend tens of thousands of dollars,” she says of the wealthy Chinese travelers. “Or end up buying real estate wherever they go. Travel and real estate go hand in hand. They visit a destination to check it out. They’re thinking of where they might be citizens in the next few years. And Hawaii and the U.S. remain aspirational destinations.”


More Festivals to Fill in the Gaps

Events that help draw tourists during shoulder seasons, clockwise from top left: the Merrie Monarch Festival, the Hawaii Food and Wine Festival and the Honolulu Marathon.
 

The Hawaii Tourism Authority wants to build its list of festivals to attract visitors to every island, especially during slower “shoulder” periods.

“The majority of festivals and events take place on Oahu and we’re looking at seeing how we can grow festivals on the Neighbor Islands like the Merrie Monarch in Hilo,” says David Uchiyama, VP for tourism and marketing for the Hawaii Tourism Authority.

He also wants to expand festivals now held on Oahu into statewide events. For instance, he hopes to expand the Hawaii Food and Wine Festival, held in September on Oahu, to Hawaii Island and Maui.

The Honolulu Marathon – Hawaii’s largest visitor event – has already expanded its schedule by adding a half-marathon in 2012. The 13-mile event, called Hapalua, will be held again on March 10 this year.

Half-marathons are growing in popularity faster than full marathons, says Honolulu Marathon president and CEO Dr. Jim Barahal. For instance, he says, the half-marathon in Las Vegas attracts 37,000 runners compared to 7,000 for the full marathon. Hapalua attracted 3,000 runners in 2012, only about one-sixth of full marathon participants, but Barahal expects more runners this year.

The new event takes advantage of a running boom among young women in Japan that is fueled by social media.

“The lift and capacity from Japan has helped enormously,” he says. “We’re reaching a much younger demographic than tourism as a whole.”

Hawaii’s full marathon is the fourth largest in the U.S. and the seventh largest in the world. It’s a “destination marathon,” Barahal says, with half of the runners traveling more than a thousand miles to participate.

It used to be known as the marathon with poor food, he says, but, “We decided to change that and give everyone a malasada at the end.

“We changed the ‘cheap guys with poor food’ image to one with people dreaming of a malasada at the end of the race.” 

Hawaii Business magazine invites you to comment on our articles and the issues they raise. Comments are moderated for offensive language, commercial messages and off-topic posts and may be deleted. Some comments may be chosen for inclusion in the magazine on the Feedback page.

Jan 22, 2013 10:00 am
 Posted by  Aaron808

Regarding the Marathon:

Dr. Barahal is a hero for Hawaii running and tourism.

Last year's had better aid stations than in past years. Plenty of ice and the option to fill one's own bottle were welcome.

Low cost of entry for locals is great.

BUT, if he really thinks, “We changed the ‘cheap guys with poor food’ image," he needs to think again.
"A malasada at the end of the race” is almost inedible. Other than that was bananas, bagels and water.
Pretty poor selection.

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