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Hot years for Caribbean, Mexico hurt Hawaii Tourism in 2014, operators say luxury will restore it next year

MAUIBy Joe Pike From Travel Agent Central

Travel Agent recently chatted with some notable Hawaii tour operators and learned that solid years for both Mexico and the Caribbean moderately hurt Hawaii’s numbers in 2014.

The Caribbean and Mexico may have taken some business from Hawaii this year, but operators are expecting luxury to bring it back in 2015.

Travel Agent recently chatted with some notable Hawaii tour operators and learned that solid years for both Mexico and the Caribbean is causing Hawaii to suffer a moderate dip in numbers this year.

But whatever Hawaii lost this year will come back even stronger next year as the destination is prime to capitalize on affluent clients looking for the latest luxury resort to vacation at.

“Mexico’s return has definitely hurt some business in the Caribbean and Hawaii, but all three are really hot right now,” said Steven Bradley, MLT Vacations’ product manager for Jamaica. “There is so much buzz in the Caribbean, especially in Jamaica, with all the new brands, products that are expanding there.”

Jack E. Richards, president and CEO of Pleasant Holidays, told Travel Agent the first few months of the year were especially brutal for Hawaii because the airfares were unusually high.

“The first part of the year was more difficult (selling Hawaii) since there were higher airfares within the market and that combined with a five-percent raise in hotels rates in January, February, March and even April really hurt Hawaii,” says Richards.

And Joelle Arriola, Classic Vacations’ product director for Hawaii and South Pacific, agrees.

“Our Hawaii business depends so much on repeat business and our repeat business all went to Europe, the Caribbean and Mexico this year because fares were some of the highest I’ve ever seen in Hawaii,” says Arriola.

But in May, Richards says domestic seat capacity spiked to three percent and when seat capacity goes up, fares come down.

“Additional seats pushed the fares back down in May,” Richards says. “The flights started to moderate a bit, but that first part of the year was definitely more difficult to sell Hawaii than normal.”

And as far as that seat capacity to the Caribbean, Richards says you can give most of the crtedit to Delta, which is making an aggressive push in the Caribbean. In June, the St. Lucia Tourist Board announced Delta will add non-stop service from New York’s JFK International Airport to St. Lucia’s Hewanorra International Airport (UVF). Commencing December 20, the weekly service will operate every Saturday throughout the year. The flight marks an expansion in service by Delta to UVF; the airline currently operates nonstop flights from Hartsfield-Jackson Atlanta International Airport. That same month, the Barbados Tourism Authority (BTA) and Delta announced a collaboration on new nonstop service this winter to the Barbados from both New York and Atlanta. The new flights begin December 4. They are twice weekly between Grantley Adams International Airport in Bridgetown and both New York’s John F. Kennedy International Airport and Atlanta’s Hartsfield-Jackson International Airport, where connections to cities across the United States are available. The New York flights represent Delta first ever nonstop flight from the Big Apple to Barbados.

“At the same time, we have seen a dramatic increase in seats coming into Mexico and the Caribbean and dramatic increasing in seat capacity to Mexico and Caribbean combined with increased interest in Central America and you can see why Hawaii has had some challenges from other destinations,” says Richards.

In fact, the Caribbean saw a 4.3 percent increase during the first six months of the 2014, which is in line with the world average of 4.7 percent. Accoridng to the Caribbean Tourism Organization, just 21 countries in the region were able to breakdown their tourist arrivals by destination in time for the report. From the most recent figures it was clear that more Europeans and Canadians are gravitating to the region showing increases of six percent and 4.3 percent, respectively.

For the winter period represented by the first four months of the year, at least five countries reported double-digit growth. These destinations continue to power through the current summer showing signs of doing exceptionally well this year.

As far as Mexico goes, Delta recently announced that it would offer two new flights from San Diego and Seattle and a new non-stop flight from New York’s JFK to Los Cabos. All of the new flights will begin in December, and will be accompanied by increased frequencies from other U.S. cities. Beginning on Decemeber 20, travelers from San Diego will be able to take a non-stop flight to Los Cabos International Airport (SJD) via Delta, seven days a week. The Seattle to Los Cabos flight will be available four times per week through January 10; afterward the flight will operate on Saturdays only.

The non-stop flight from JFK to Los Cabos will operate on Saturdays only from December 20 through June 27, 2015. Additionally, Delta will increase service from Detroit, which currently offers one flight per week to Los Cabos, to daily non-stop service. As of December 20, the airline will also increase flights departing from Salt Lake City from four to seven flights per week and from Minneapolis, eight flights per week will be available for travelers en route to Los Cabos with one flight departing daily and two on Saturdays.

In total, there will be 34 additional operations a week to Los Cabos via Delta Airlines which represents 25,000 to 30,000 additional seats per year.

Mexico has been on the rebound for some time now, and its tourism numbers continue to grow at a rapid rate. According to Latin Times, Mexico has earned $7 billion dollars from tourism in the first five months of the calendar year alone.

According to NBC News, the total number of tourists in Mexico hit a record in the first half of the year, with more than 14 million foreigners touching down, almost 20 percent more compared to last year, the tourism department said. The spike in visitors, especially Americans, comes after several years of stagnation in the travel sector. The arrivals first dropped in 2009, when increased cartel killings couples with the H1N1 flu scared away just about every Mexico-bound clients. In the three years to follows, tourist numbers to the county continued to dip as drastic levels. Last year, however, tourist numbers finally recovered to just over the 2008 level. And this year they are taking off to levels never reached before in the country. Forget about Mexico being back; Mexico is perhaps the hottest it has ever been.

“There is simply no bad (public relations) coming out of Mexico right now,” says Arriola, “and their all-inclusives are better than they ever were. We saw a major bump with Mexico this year, especially with groups. They are really good with groups.”

Richards says all three getaways, the Caribbean, Hawaii and Mexico, are trending up for the 2015 season. And as far as Hawaii goes, you can give all the credit to the affluent clients planning trips to the Aloha State next year.

“One of the clearest trends in Hawaii is that travel there is moving upscale,” says Richards. “Luxury segments are beginning to dominate travel to Hawaii. We don’t see a lot of sales in the lower category hotels. We are seeing huge clusters in sales of four- and five-star resorts.”

And Hawaii will have the properties to accommodate such clients.

Montage Hotels & Resorts announced in 2013 an expansion of its luxury hotel collection with the addition of Montage Kapalua Bay.

The resort, which was formerly The Residences at Kapalua Bay, underwent a multimillion-dollar improvement plan beginning this fall, with plans including 56 Montage branded residences offered for sale and the introduction of a 50-room all-suite Montage hotel.

Located on the island of Maui, Montage Kapalua Bay will join the collection’s current hotels and residences: Montage Laguna Beach, celebrating its 10th anniversary in 2013, Montage Beverly Hills and Montage Deer Valley.

Like its fellow Montage hotels, Montage Kapalua Bay will celebrate art and artisanship in many forms, including visually, and through culinary and spa offerings. Clients will experience a blend of relaxation, rejuvenation and activation, with every detail celebrating the richness of the Hawaiian culture.

Montage Hotels & Resorts will assume management of the property immediately. While the improvement program is being completed, the property will continue to operate as The Residences at Kapalua Bay on an interim basis.

Andaz Maui at Wailea resort, a five-star resort, officially opened its doors in July of 2013 in the Wailea section of Maui.

“Andaz has been getting quite a bit of buzz,” says Arriola. “It’s not the same old Hawaiian build. It has that sense of Hawaii , but it is also very modern.”

Andaz, which means “personal style” in Hindi, is the high-end, lifestyle branch of Hyatt Hotels and Resorts and features roughly 300 rooms and suites, ranging from 456 to 2,321 square-feet and including seven, three-to-five-bedroom villas.

“Hawaii is looking great for 2015 because the economy is improving and when the economy improves, people tend to travel a bit more upscale,” says Richards. “But I think that overall the new resorts in both Caribbean and Mexico will continue to put pressure on Hawaii and that’s a good thing.”

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