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Tourism Market Study for Hilo, Hawaii

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Tourism Market Study for Hilo, Hawaii Tourism Market Study BANYAN DRIVE, HILO, HAWAII Prepared for: State of Hawaii Department of Land and Natural Resources July 2014 Copyright © 2014, by Munekiyo & Hiraga, Inc. CONTENTS Page INTRODUCTION ...............................................................................................................1 A. PURPOSE ............................................................................................................... 1 B. BANYAN DRIVE OVERVIEW ............................................................................ 1 C. METHODOLOGY ................................................................................................. 4 TOURISM INDUSTRY IN HAWAII .................................................................................5 A. VISITOR ARRIVALS ............................................................................................ 5 B. AIRLINE SEAT CAPACITY............................................................................... 12 C. VISITOR CHARACTERISTICS ......................................................................... 14 D. VISITOR ACTIVITIES AND EXPERIENCE ..................................................... 17 E. VISITOR SATISFACTION ................................................................................. 20 LODGING TRENDS .........................................................................................................22 A. HAWAII HOTEL PERFORMANCE INDICATORS.......................................... 22 B. VISITOR ACCOMMODATION PATTERNS .................................................... 24 C. HAWAII ISLAND AND HILO HOTEL INVENTORY ..................................... 27 D. PLANNED AND PROPOSED HILO LODGING INVENTORY ....................... 32 E. HILO HOTEL MARKET COMPARISON TO OTHER HAWAII DESTINATIONS .................................................................................................. 32 TOURISM FORECAST ....................................................................................................35 LODGING DEMAND ANALYSIS ..................................................................................37 A. KEY FINDINGS ................................................................................................... 37 B. WHY DOES HILO CAPTURE A LOWER PROPORTION OF VISITORS TO THE STATE?........................................................................................................ 39 C. CAN THE MARKET SUPPORT A NEW HOTEL IN HILO? ........................... 41 D. WOULD A NEW HOTEL ATTRACT A HIGHER PROPORTION OF VISITORS TO HILO? .......................................................................................... 44 E. CONCLUSION ..................................................................................................... 46 REFERENCES ..................................................................................................................48 i LIST OF FIGURES Page Figure 1. Regional Location Map ..................................................................................................2 Figure 2. Hilo Hotels ......................................................................................................................3 Figure 3. Visitor Arrival Trends, 1990-2013 .................................................................................6 Figure 4. Visitor Arrivals and Change In Gross Domestic Product, 1990-2013 ...........................7 Figure 5. Percent of State Visitors that Travel to Hilo, 2012.......................................................11 Figure 6. Percent of Visitors that Travel to Hilo by Origin, 1990-2012 ......................................12 Figure 7. Hotel Occupancy Rate, State of Hawaii and Hawaii Island, 2000-2012 ......................23 Figure 8. Average Daily Rate, State of Hawaii and Hawaii Island, 2000-2012 ..........................24 Figure 9. Hilo Hotels ...................................................................................................................30 LIST OF TABLES Table 1. Total Visitor Arrivals, 2012 And 2013 .............................................................................5 Table 2. Distribution of Visitors To Hawaii By Island, 2012 .........................................................8 Table 3. Visitor Origin by Major Market Area, 2012 .....................................................................9 Table 4. Distribution of Visitors By Island And Origin, 2012 .....................................................10 Table 5. Airline Seat Capacity, 2012 ............................................................................................13 Table 6. Inter-Island Flights Per Day (Direct From Honolulu International Airport) ..................13 Table 7. Visitor Characteristics by Island, 2012 ...........................................................................15 Table 8. Purpose of Visit by Island, 2012 .....................................................................................16 Table 9. Average Length of Stay by Island, 2012 ........................................................................17 Table 10. Visitor Activity Participation, State of Hawaii and Hilo, 2012 ....................................18 Table 11. Visitor Satisfaction Rating by Island, 2012 ..................................................................21 Table 12. Overall Experience In Hilo by Visitor Origin, 2012 ....................................................21 Table 13. Hotel Performance Indicators by Island, 2012 .............................................................22 Table 14. Accommodations Inventory by Type and Island, 2012 ................................................25 Table 15. Percent of Visitors Staying In Accommodation Type by Island, 2012 ........................25 Table 16. Hilo Accommodation Inventory and Usage Comparison, 2012 ...................................26 Table 17. Percent of Visitors Staying at Hotel (Vs Other Lodging Type), 2012 .........................27 Table 18. Visitor Plant Inventory, Island of Hawaii, 2012 ...........................................................28 Table 19. Hilo Hotel Inventory .....................................................................................................29 Table 20. Price Class of Hotels, Hilo and State of Hawaii, 2012 .................................................33 Table 21. Price Class of All Lodging Units by Island, 2012 ........................................................33 Table 22. Visitor Arrival Forecast, 2005-2016 .............................................................................35 Table 23. Visitor Origin by Major Market Area, 2012 and 2016 Projection ................................36 Table 24. New Hotel Demand Analysis, 2016 .............................................................................43 Table 25. Summary of New Hotel Demand Analysis, 2016 .........................................................44 K:\DATA\SOH DLNR\Banyan Drive\Tourism Market Study\Market Study Report.docx ii I. INTRODUCTION I. INTRODUCTION A. PURPOSE The State of Hawaii, Department of Land and Natural Resources (DLNR) owns land in the Banyan Drive area of Hilo on the island of Hawaii. The DLNR leases its lands along Banyan Drive for various hotel and resort-related uses. Many of these leases were entered into in the 1960s or earlier and are set to expire in the next several years. With the approaching expiration of these leases, DLNR has commissioned several studies on the Banyan Drive area to assist with long-term planning efforts for the area. This Market Study will provide current and forecasted data on Hawaii’s tourism industry, including lodging and visitor statistics for the Island of Hawaii and the Hilo area specifically. In addition, the Study will provide an analysis and forecast of the market demand for and supply of rooms in the Banyan Drive area of Hilo, including information on the current and forecasted visitor plant inventory and the types of accommodations that visitors will likely be seeking. B. BANYAN DRIVE OVERVIEW Banyan Drive is a tree-lined street at the shoreline of Hilo that is known as the “Hilo Walk of Fame” for the banyan trees planted by celebrities. Located near the Hilo International Airport, Banyan Drive traverses the makai side of the Waiakea Peninsula offering views of Kuhio Bay and Hilo Bay. See Figure 1 and Figure 2. Banyan Drive is centrally located in Hilo in close proximity to the Hilo International Airport and downtown Hilo. Volcanoes National Park, one of the most popular attractions in the area, is located approximately 30 miles away. Other attractions, such as Akaka Falls State Park (15 miles away) and Imiloa Astronomy Center (3 miles away), are within close driving distance of Banyan Drive. The Naniloa Volcanoes Golf Club, a semi-private 9-hole golf course is also located on Banyan Drive. The Naniloa Volcanoes Golf Club is one (1) of two (2) golf courses in Hilo. East Hawaii’s largest hotels are located on Banyan Drive on lands leased from the DLNR. There are five (5) hotels along Banyan Drive on DLNR lands. Many of these buildings were built in the 1970s or earlier and exhibit signs of age. Page 1 Pacific Ocean Area of Banyan Map Drive Hilo Bay Hilo International Airport Hilo Waiakea Source: USGS Topographic Map, Hilo Quadrangle, 1995 Figure 1 Tourism Market Study Regional Location Map NOT TO SCALE Prepared for: State of Hawaii, Department of Land and Natural Resources M U N E K I Y O & H I R A G A , I N C . SOH DLNR/Banyan Drive\Tourism Market
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