About 2.5 million people came to Hawaii in the first quarter of this year — but during that same January-through-March period — they spent less money than a year ago. Six percent less.

Visitor arrivals up, spending down

Mufi Hannemann, president and CEO of the Hawai’i Lodging & Tourism Association, says despite the increase in arrivals, there has been a drop in visitor spending and in hotel occupancy.

He says, and others agree, a key reason for the numbers, is the growth of vacation rentals.

Many, if not most of the rentals, are in neighborhoods.

Hannemann says the hotels want a level playing field.

“We’re not against legal vacation rentals, provided that they’re operating in places they’re authorized to do so, and also paying the taxes that we’re paying. But what has really gotten out of control are the illegal transient vacation rentals.”

Jo Mc-Garry Curran, first vice president of Advisory & Transaction Services and Retail Services at CBRE Inc., agrees that more people are staying in vacation rentals.

She says says Hawaii still is a dream destination — it’s just that everybody doesn’t have to spend as much to experience it.

“The reason there’s a dip in the spending is, we’re seeing a different kind of traveler. We’re definitely seeing a Hawaii that’s more accessible and more affordable, and really, if you go to Paris, or Milan, or Edinburgh, or anywhere, you’re going to see exactly the same thing happening.”

Mc-Garry Curran says CBRE research shows the new type of traveler is more likely to seek out local small businesses — and says many made-in-Hawaii retailers are thriving as a result. 

Hanneman says the traditional hospitality industry has suffered — as a result of a highly publicized strike last year — Hawaii’s natural disasters — and the closure of some attractions, such as the Arizona Memorial.

He says February and March were two of the worst months the industry has experienced.

Those issues are temporary — while he says vacation rentals are a continuously growing problem they’ve been asking the government to address.

This is a story with many sides — and the debate will rage on.