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Hawaii worries about Japan — and its tourists

In Hawaii, where Japanese visitors make up more than 20 percent of the state's 7 million annual visitors, the tourism industry is nervously watching for signs of a sharp drop-off.

First came the tsunami spawned by the deadly Japanese earthquake, causing tens of millions of dollars in damage to homes, businesses and boats in Hawaii.

Now the Aloha State is preparing for a second hit.

Thousands of Japanese tourists, who make up almost 20 percent of Hawaii’s more than 7 million annual visitors, have canceled their vacations to the islands as they cope with the disaster back home.

Hawaii is the top U.S. destination for Japanese tourists, drawing more than 1.2 million of the 16.6 million total outbound tourists last year. Visitors from Japan poured about $1.9 billion into Hawaii in 2010, or about 17 percent of the $11.4 billion overall visitor revenue.

“What has happened in Japan is a big concern for us,” said Mike McCartney, president of the Hawaii Tourism Authority.

He notes that Hawaii was just beginning to see a significant uptick in tourism after several years of economic challenges related to the recession, bankruptcy of several airlines serving the islands and skyrocketing oil prices.

Although McCartney wants to continue to see Japanese visitors coming to Hawaii, he said the concerns go beyond dollars and cents. “Our history, our cultures, our families go back centuries. My grandparents came from Japan. Business is secondary to the deep relationships we have with Japan.”

About a quarter of Hawaii's population, or 296,674 residents, identified themselves as being part or full Japanese descent, according to the 2000 Census.

But cancellations are definitely being tallied.

“One hotel that usually depends on Japanese tour groups to fill 25 percent of its rooms is now down in the teens,” said Mufi Hannemann, former mayor of Honolulu and current president of the Hawaii Hotel and Lodging Association. “In just three days, one wedding planner has had 50 Japanese couples cancel their Hawaiian weddings. And I suspect golf tours, which are also popular with Japanese tourists, will take a hit as well.”

At the Outrigger Hotels & Resorts' 27 Hawaiian properties, Japanese visitors typically make up 10 to 15 percent of the guests. Thus far, the chain has “been spared massive group and individual cancellations,” said David Carey, president of Outrigger Enterprises. But he anticipates the pace of cancellations will jump to 20 to 30 percent while Japan regains its footing.

“More than 60 percent of Hawaii visitors from Japan are repeat visitors who may change plans, rebook or defer travel depending on their personal situation,” he said.

Missed connections, lost cash
In 2010, Japanese tourists in Hawaii stayed an average of nearly six nights and spent about $270 per person, per day, according to the Hawaii Department of Business, Economic Development & Tourism.

“Japanese tourists spend more than the average American that travels to Hawaii,” said Hannemann. “That’s part of why these international travelers are a very important priority. When they travel, they spend.”

And get married.

Last year, more than 27,500 Japanese couples were married in Hawaii at a cost of just a few thousand dollars to $10,000 and above, said Cy Feng, research manager for the Hawaii Tourism Authority.

Many of those couples said “I do” at Best Bridal Hawaii, a Honolulu company that caters to the Japanese market. Karen Mukai, the company's vice president, said she’s had Japanese couples cancel events planned for last week, this week and next week, but not many cancellations after that. “It’s not like after 9/11 when Japanese people didn’t know what was going to happen with travel to the United States. Many couples have hope and are trying to keep their optimism up.”

Unlike other cultures that try to move on and return to normal as soon as possible following a tragedy, travel industry officials say the Japanese tend not to travel or at least postpone in sympathy.

But Newlyweds Tasuku and Mana Hashimoto of Tokyo were determined to make it to Hawaii for their honeymoon after being married a day after the earthquake.

"We just barely were able to (have the wedding)," Mana Hashimoto said. "We had it in Yokohama. There were some friends who weren't able to make it. But most did."

The couple considered canceling their trip, but decided to go because there wasn't much damage in their area and the planes were flying. But they acknowledged it's been difficult to fully enjoy their vacation, knowing the devastation back home.

Will Japanese tourists return?
Like many wedding halls and tour operators, hotels throughout Hawaii are being urged to be flexible with refunds and re-bookings. “We recognize these things occur and we’ve gone through it before,” Hannemann said, “so we’re urging our hotel and lodging members to go the extra mile. Because, in the long run, we believe it will pay dividends in our long-term relationships.”

Estimates on when — and if — large numbers of Japanese will tourists return to Hawaii vary widely.

That’s why the tourist authority and Hawaii’s governor, Neil Abercrombie, are already reaching out to new markets.

“Our visitor industry is working on boosting our marking efforts on the mainland and Canada,” Abercrombie said. “It is important for people to know that Hawaii is open for business."

The tsunami that devastated Japan last week also hit the Big Island and Maui, causing an estimated tens of millions of dollars in damage. Two Big Island hotels remain closed temporarily to clean up damage caused by the powerful waves — the Four Seasons Resort Hualalai and Kona Village Resort. But Abercrombie says most of Hawaii's visitor industry infrastructure remains intact.

Some hotel managers predict bookings will return to normal by May. But McCartney of the Hawaii Tourist Authority is more reserved. “Over the next couple of months, we could see up to a 20 percent decrease in visitor arrivals,” he said.

Hannemann worries it could be worse. “After the 1995 Kobe earthquake, it took 5 years to get the Japanese tourists back. This time it may take much longer.”

Fred J. DeMicco, a professor in the Department of Hotel, Restaurant and Institutional Management at the University of Delaware, agrees. The post-earthquake dip in tourism may be a short, temporary blip, he said, but if the oil prices continue to climb and airlines and cruise lines continue to add fuel surcharges, “then consumers will pull back on business and leisure travel and then hospitality tourism will be impacted — especially in Hawaii.”

And it’s not just those living in Hawaii holding their breath.

Last year, 225,000 Japanese visitors spent an estimated $565 million in New York City. Due to the disaster in Japan, NYC & Company is forecasting the city could lose up to one-third of its Japan travel market this year. George Fertitta, CEO of the marketing and tourism company, put it another way:

“That represents a decrease of approximately 75,000 visitors and a loss of $187.5 million in direct spending.”

Information from The Associated Press was included in this report.