Decline in Maui room bookings could cost the state more than $40 million in taxes
MAALAEA, Maui – Alan Ayers and his family toured the Maui Ocean Center aquarium in Maalaea the day after the anniversary of last year’s devastating Maui wildfires.
Ayers’ love affair with Hawaii dates back to when his father worked for the National Park Service at Hawai’i Volcanoes National Park. But the Utah resident said Maui is his favorite island, and he has returned there at least seven times since the wildfires on August 8, 2023.
“We left Maui on August 7, 2023 and headed to Kona,” he said. “When I heard the news, it was hard to describe the emotions I felt. We cried all day.”
Ayers said the family initially paused their trips to Maui but returned as soon as possible because “we really, really love Maui. There’s always a good time to be on Maui. We still feel that way.”
But a significant drop in visitor numbers to Maui shows that not all visitors share that opinion. Some still believe they are not welcome, as the government asked tourists to leave immediately after the disaster, and some residents and celebrities have reinforced that message on social media. Others don’t understand enough geography to realize that most of Hawaii was spared from the wildfires, and even on Maui there is plenty to see and do outside of the 5-mile-wide Lahaina Wildfire Impact Zone.
And some fear that their joy and jubilation might be seen as inappropriate.
Data presented by Jennifer Chun, director of tourism research for the state Department of Business, Economic Development and Tourism, at the Hawaii Tourism Authority’s July 25 board meeting shows that even now, about two-thirds of likely Hawaii visitors know about the wildfires that have killed at least 102 people and caused estimated $5.5 billion in damage.
While the fires had no impact on the likelihood of nearly 6 in 10 travelers visiting Hawaii in the next two years, Chun said 26% said they will not travel in the next two years because of the fires, and 8% said, “I wanted to, but I won’t come anymore.”
Marketing push
The subdued travel sentiment for Maui is depressing tourism across the state and is a major reason Hawaii tourism industry executives have asked the Hawaii Department of Tourism to add $1.6 million to the Hawaii Visitors and Convention Bureau’s marketing budget to run a marketing saturation campaign in Los Angeles, Hawaii’s top visitor market, Sept. 15-22. Angela Vento, general manager of Wailea Beach Resort, said hotel occupancy on Maui has dropped about 20% during the summer, which is normally a peak time, “so the hotels on Maui that normally have 85-90% occupancy are in the 60% (range).”
Vento added that group business was down about 40% compared to 2023, as there was a base of group business from October to the first quarter of this year that was already on the books before the fires.
Keith Vieira, principal of KV & Associates, hospitality consulting, said advance bookings for the rest of the year on Maui are down compared to other years. In addition, Vieira said once the American Red Cross and other disaster-related guests leave, Maui hoteliers will need to book 250,000 to 300,000 room nights to make up the difference.
“If we don’t do that, this deal alone is a $40 million tax loss for the state, and that’s just the hotel portion of the (transient lodging tax) and the (general excise tax). That doesn’t include all the GET taxes for the ancillary restaurants, tours, etc., so it’s probably a $60 million to $70 million loss,” he said.
HTA Chairman Mufi Hannemann, who is also president and CEO of the Hawaii Lodging & Tourism Association, called the numbers “compelling” and said he was pleased the board recognized the benefit of approving the funds.
Vieira estimates that after a lackluster summer, the campaign will be boosted by $40 million to $60 million in additional marketing funds paid for by Hawaii’s tourism industry.
Vento estimates that 96 percent of Maui’s sales come from the U.S. West Coast. She said a unified message is needed to get business back on track, similar to what happened in 2009 when the government and industry worked together to deal with the U.S. financial crisis. She said she has been traveling extensively in the U.S. mainland since the fires and still hears customers unsure about traveling to Maui.
“They hear about ‘malama’ and caring and just want to have fun,” she said. “We believe this saturation will help us reinforce the message: ‘You are welcome, we value you and we want you to come now.'”
New campaign
Jay Talwar, HVCB’s chief marketing officer, said the saturation campaign will leverage HTA’s latest branding campaign, “The People. The Place. The Hawaiian Islands,” which is designed to appeal to the mindful Hawaii traveler “who displays behavior that suggests we would like to invite them to visit our islands.”
He said the campaign, which features prominent residents from each island, is about “really giving the people of Hawaii the opportunity to share what is unique about their lifestyle and their home and how that impacts their upbringing and their values today.”
Hannemann said the campaign will also likely receive support from Gov. Josh Green and Maui Mayor Richard Bissen, both of whom have said they are willing to participate in the LA welcome initiative, which could include opportunities around the Los Angeles Rams’ Sept. 22 home game against the San Francisco 49ers.
Reach visitors
Companies like Maui Ocean Center also invest in their own independent marketing.
Tapani Vuori, president and CEO of the Maui Ocean Center Marine Institute and executive director of the aquarium, said the center is outside the immediate impact zone of the fire but has seen a significant decline due to the “don’t come to Maui” message, which has interrupted the post-COVID-19 recovery.
“We expected 2023 to be a more successful year than 2019, but then the storm came,” he said. “By August 22, 2023, there were only 116 paying guests” – a decline of over 97%.
Vuori said business had recovered but was still down about 24%.
Mark Matthews, marketing director for Maui Ocean Center, said, “It’s very volatile. There’s so much chaos in the market. Spending demands have increased and (visitors) are more selective about what they do.”
“We’re trying to expand the ways in which we can execute and generate profits and maintain our ability to employ our people, because that’s basically the most important thing,” he said. “I’m proud to say that we haven’t had to lay anyone off because of that. But that doesn’t mean we’re not stretched to the limit.”
Michael Takamura, Maui Ocean Center’s director of sales, said the attraction is working with travel wholesalers such as Pleasant Holidays and AAA to ensure visitors receive clear messages. Takamura said he recently met with travel agents in Texas who told him they would appreciate hearing a clear travel invitation from Maui islanders.
“HTA says, ‘We want you to visit Malama Hawaii,’ but when (visitors) see the videos, they think Malama means picking up trash or plants. But when we explain to them that ‘Malama means caring and that you actually show your care by coming to visit because you are taking care of Maui by visiting and (thus) supporting the economy and the people,’ they ask, ‘Why couldn’t someone just say that from the beginning?'”
Trickle-down effects
The decline in airline and hotel passengers had a huge impact on Maui’s entire economy. The restaurant industry, as well as leisure activities and attractions, were hit particularly hard.
The Maui Butterfly Farm in Olowalu, a few miles from the town of Lahaina, was initially closed out of respect for the victims of the wildfires. Geoff Wilson, who owns the business with his wife Siobhan, said they realized it was time to reopen it and help heal the community after a homeless Lahaina resident and her family, who lost their own butterfly garden when their house burned down, requested a tour.
Wilson said the farm is just outside the immediate fire zone, but guest numbers dropped dramatically after the fires and have settled at about 50% of pre-fire levels.
The couple had to cut their staff by about half and take on more of the labor-intensive work of raising butterflies and the plants that feed them themselves. As Wilson witnesses the metamorphosis from caterpillars to butterflies, he is reminded that Lahaina is undergoing its own transformation.
“Everyone is aware that if tourists don’t come back, businesses will simply go bankrupt. And I think many of them already have and many more are about to do so,” he said.