Hawaii’s Fast-Growing Source for Tourists

It might not be whom you expected

October, 2010

The fastest-growing major market for Hawaii tourism is on display at the Polynesian Cultural Center.
Each day around noon, minibuses and motor coaches pull up and about 12 dozen South Korean tourists alight, ready to take in the sights. Korean visitors are on the increase, with the center expecting as many as 80 percent to 90 percent more this year than in 2008. “We’re looking for this market to really take off,” says Albert Nihipali, PCC’s manager of Asian sales.

In many ways, it already has.

South Korea is a rising star in Hawaii tourism, with its arrival numbers almost doubling in the first half of 2010 compared with 2009’s first half. That’s faster growth than the U.S., Canadian, Japanese, Chinese or other big markets.

“We see more flights coming in,” says Ted Kim, manager of Tournet Hawaii, which specializes in the inbound Korean market. “We’re getting more customers and that’s good.”

There are other reasons to celebrate: the average Korean tourist spent an estimated $231 a day in Hawaii this year. That makes them the most free-spending tourists after the Chinese ($322.70 a day) and Japanese ($261.90).

About $75 of this daily spending by Koreans is on shopping, with another $44 spent on meals and drinks. Roughly four out of every 10 visitors from South Korea are honeymooners.

Korean arrivals are still small compared to the overall Hawaii market – little more than 1 percent – but represent a tantalizing market with much potential, especially since visa restrictions were relaxed in late 2008. South Korea has 49 million people (compared with Japan’s 128 million), a 3.6 percent unemployment rate and a projected GNP growth rate of 4.6 percent this year.

The Hawaii Tourism Authority is developing marketing programs targeting key Korean markets: honeymooners, luxury travelers and golfers. HTA is also supporting airlines that want to increase service, including direct flights from Busan, Korea’s second-largest city, and perhaps charter flights to Kona.

“Korea has the potential to get up to 130,000 (visitors annually) or greater,” says David Uchiyama, HTA vice president, explaining this may be a conservative estimate. With more flights, the number could be about a quarter million annually, though it will take several years to get there, he says.

HTA forecasts 95,000 Korean visitors this year, up from about 55,000 in 2009. Next year’s forecast is for 110,000 Korean visitors.

Currently, Korean Airlines has 10 weekly direct flights between Seoul’s Incheon International Airport and Honolulu. Hawaiian Airlines wants to start four weekly flights from Incheon in January.

“I think the amount of air service we receive could pick up,” Uchiyama says.
The market does have its drawbacks – swings are to be expected as currency exchange rates move up and down, and any hint of H1N1 or other pandemics would dampen arrivals. And Hawaii’s tourism infrastructure isn’t fully ready to handle more Koreans; there is a shortage of Korean-language tour guides and vehicles, particularly on the Neighbor Islands.

But Nihipali says the Polynesian Cultural Center is coping well with the Korean influx. He says the center has developed Korean-language brochures and can draw more than enough Korean-speaking tour guides from nearby Brigham Young University-Hawaii in Laie.

The center is averaging about 3,300 Korean tourists a month and expects that number to rise further.
“We see it’s going to be very profitable in the next couple of years,” Nihipali says. 
“Korea has the potential to get up to 130,000 (visitors annually) or greater,” says David Uchiyama, 
HTA vice president.


How much 
do they spend?

Asian tourists spent more than
$2 billion in Hawaii in 2009, 
the HTA says. Here is the average daily spending in Hawaii for 
the three main groups of 
Asian tourists, each of which spends more than the average Mainland visitor.

Chinese spend

Japanese spend

Koreans spend

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Greg Wiles