Feb
29
Tourism report: what slowdown?
Filed Under Sunrise on KGMB9 | Leave a Comment
Hawaii tourism will probably slow this year — the official forecast this week from the state was for slightly fewer visitors but a new record high in visitor spending — but it most assuredly did not slow in January.
The wrap-up report on January tourism from the Hawaii Department of Business, Economic Development & Tourism said there were more visitors, more visitor days, and more visitor spending, than in the same month last year. Roughly 600,000 visitors spent roughly $1.1 billion.
Japanese arrivals fell 5% from year-before levels but Japanese honeymoon traffic actually increased. California arrivals eased but traffic from Portland, Seattle and Vancouver (where the Canadians fly from) all rose in double digit percentages. We also got more visitors from foreign countries other than Japan and Canada, and from east of the Rockies.
This is not to say we might not yet experience a serious slowdown. We get more Californians than any other brand of visitor, and the California economy is tanking. But most of our California visitors come from the prosperous coastal cities of the Golden State, while most of the state’s economic problems come from the central agricultural part of the state including such cities as Fresno, Merced and El Centro.
What I’m trying to say is that there has not been any mainland economic development to impel mainlanders to cancel plans for a Hawaii vacation. We will begin to lose domestic visitor traffic if and only if mainlanders whose personal finances are strong begin to FEEL less prosperous because of everything they watch on CNBC.
Two-thirds of U.S. economic activity is consumer spending, much of it discretionary, so the mood of consumers isn’t merely a touchy-feely thing, it’s a concrete economic indicator with measurable effects on business.
Feb
29
After several shows at Kakaako Waterfront Park, the Pacific Handcrafters Guild has returned to its old home of years standing, Thomas Square. The crafters will encircle the huge banyan tree again this weekend.
The show runs from 9am to 4pm Saturday and Sunday with free admission and food and music as well as the crafters themselves, who do everything from garments to jewelry to woodcrafting to pottery.
The guild has been holding these shows for more than 33 years. Its July, October, November and December shows will all be at Thomas Square.
Feb
28
Hawaiian Airlines made a $7 million profit in 2007, on revenue that grew 11% to $983 million.
That’s only one dollar profit on every 140 dollars of revenue, but still.
With a fare war bleeding all profit and then some from interisland service, and jet fuel bills soaring, the amazing thing that Hawaiian didn’t end the year in the red.
This breakdown of 2007 revenue (with 2006 revenue for comparison) shows that the lion’s share of the revenue came from Hawaiian’s regular long-haul service to the mainland:
- Passengers: $889 million. ($797 million.)
- Cargo: $31 million. ($32 million.)
- Charter: $12 million. ($10 million.)
- Other: $51 million. ($50 million.)
This breakdown of 2007 costs (with 2006 costs for comparison) shows that the fuel bill is now one third bigger than payroll:
- Wages/benefits: $222 million. ($228 million.)
- Fuel and lubrication bills: $292 million. ($242 million.)
- Aircraft rent: $98 million. ($110 million.)
- Maintenance and materials: $93 million. ($70 million.)
- Jet and passenger servicing: $54 million. ($53 million.)
- Commissions and sales costs: $54 million. ($49 million.)
- Depreciation/amortization: $46 million. ($29 million.)
- Landing fees/other rentals: $28 million. ($26 million.)
Hawaiian CEO Mark Dunkerley says it’s gotten really hard to fly profitably and the key is to target even the smallest incremental cost adjustments. By adding capacity and selling most of the extra seats, Hawaiian brought its fourth quarter operating cost per available seat mile down 1.5% from year-before levels — 13.4% if you leave out jet fuel, which Dunkerley would dearly love to do. (Inventors: get cracking on a wind-powered jet.)
Hawaiian’s jet fuel costs are running 45% higher than last year and account for more than a third of all its expenses.
Buying three jets about a year ago led to lower aircraft rent costs and higher depreciation costs.
This is interesting: a favorable adjustment to workers comp liabilities cut a few million dollars from expenses. Repeat after me, bean counters everywhere: “Safety first!”
Posts
