SPOTLIGHT ON: CULINARY PG2 Photo courtesy of HTA / Mark Kushimi of HTA courtesy Photo

A monthly update including relevant information on industry trends, consumer and meetings market research, competitive intelligence, and Hawai‘i’s performance as a destination. MARKET INSIGHTS UPDATE United States July 2017

In This Issue

Culinary Tourism UPDATE Travel is changing. Over the past few decades, from a niche interest to a vital travel segment. Hawai‘i’s hotel industry is have become more than cookie-cutter Whether its visiting a local vineyard or a second- showing strong performance tours, chain , and lazing around on a to-none farmer’s market, unique food and bev- through the first quarter of beach. While relaxation is still a key aspect of va- erage options are playing a much greater role in 2017. Both hotel occupancy cation, the contemporary U.S. traveler now has defining how people travel. and Average Daily Rate continue to show growth bigger expectations. They are looking for destina- Hawai‘i is not immune to this trend, either. statewide, especially on the tions that offer soft adventure, a chance to broad- Visitors — especially the younger crowd — are Neighbor Islands. en their world perspective, and the opportunity expecting to satisfy their inner foodie on the Ha- PG4 to experience and understand different cultures. waiian Islands. Fortunately, with a robust food On this latter point, in particular, one aspect truck culture and rich local cuisine, Hawai‘i is of culture has risen to special prominence: food. well-positioned to fulfill and even exceed this ex- There is perhaps no better way to immerse oneself pectation. Learn about the dynamics driving cu- in a different culture than indulging in their local linary tourism and how to leverage them in this delicacies. As such, culinary tourism has grown month’s Market Insights Update.

Continued on PG2

HAWAI‘I VISITORS AND BUREAU Photo courtesy of HTA / Mark Kushimi of HTA courtesy Photo Photo courtesy of HTA / Tor Johnson / Tor of HTA courtesy Photo Photo courtesy of HTA / Tor Johnson / Tor of HTA courtesy Photo

Culinary Tourism

"For me, an overseas The Changing Tastes of Tourism bile platforms and social media. In addition to is time to..." While travel has always involved dining out, traditional web-based travel guides, foodies use the recent renaissance of local and ethnic review apps like Yelp, Instagram, and other social Foodies Non-Foodies dining options, coupled with shifting con- media tools to help shape their dining choices.

Immerse self in 70.7% sumer preferences, have dramatically changed All told, some 54 percent of U.S. culinary trav- other cultures 42.7% the landscape of culinary tourism. Contem- elers reported they would seek out restaurants porary travelers are not just incorporating featured on social media and other platforms. 65.9% cuisine into their travel plans; for many, it is It is also important to bear in mind that 41.7% their top priority. Over half (51.6%) of U.S. culinary tourism does not necessarily mean See how other 64.6% travelers reported they would like to take an that travelers are seeking out the most expen- people live 43.0% overseas vacation focused on food or wine, a sive restaurants that boast a Michelin star or

51.9% share that has nearly doubled over the past de- three. In recent years, quite the opposite is Seek adventure 30.9% cade. That proportion jumps up to 76 percent actually true. Whereas two-fifths (40.5%) within the so-called “foodie” demographic. of all travelers and more than half of foodies 47.5% While “foodies” of the past may have been expressed interest in small-scale operations beaten-path places 25.4% a small and exclusive group, they have grown such as food trucks, only 21 percent said 46.7% into a diverse and adventurous travel segment they would eat a Michelin-starred restau- a bucket list 27.4% that cannot be ignored. Thirty-nine percent of rant. These trends are somewhat understand-

44.9% U.S. travelers view overseas vacations as an op- able given cost differentials between the two. Experience nature 28.0% portunity to indulge in their love of food and However, more telling is the increased inter- wine, making them a market more than 20 mil- est in street fare over the past decade, while 32.2% lion strong. Further bolstering the importance the appeal of haute cuisine has declined. 18.0% of culinary travelers is the fact that they tend to The spike in culinary interest has not Source: HVCB analysis TravelStyles USA 2015-16 data travel more frequently than other travelers and been lost on restaurateurs and other entre- are more likely to participate in cultural im- preneurs. Indeed, hundreds of new din- mersion, exploration, and adventure-seeking. ing venues have sprung up in destinations As one would expect with such an in-touch across the world, so much so that there are segment, culinary travelers rely heavily on mo- fears of oversaturation in some markets.

Continued on PG3 Popular Food-Related Activities on an Overseas Vacation

U.S. OVERSEAS TRAVELERS FOODIE TRAVELERS

4 49.5% 74.2%

See local food being made (e.g. cheese, chocolate) 48.2% 66.4%

Eat at street stalls or food trucks 40.5% 56.1%

Shop at a farmer's market 40.9% 55.8%

Seek out restaur ants featured in magazines or 33.7% 53.2% on television or social media

Dine at a Michelin-starred / world-renowned 20.9% 35.7%

Share a meal with locals in their home 21.8% 30.4%

13.2% 22.2%

15.3% 20.6%

Source: HVCB analysis TravelStyles USA 2015-16 data Photo courtesy of HTA / Tor Johnson / Tor of HTA courtesy Photo Photo courtesy of HTA / Tor Johnson / Tor of HTA courtesy Photo

If these fears are realized, the subsequent mar- er U.S. overseas travel population in their ket adjustments will undoubtedly have some heavy reliance on technology. Over half of impact on the culinary travel scene. For now, all U.S. visitors use the web to find a restau- however, foodies have no shortage of destina- rant, while nearly as many use a mobile or tions with an abundance of unique, creative, tablet app. With that said, the Internet is and affordable dining options to choose from. not the only resource used. Guidebooks and word-of-mouth recommendations are just Foodies in Hawai‘i as or even more important, with both being When visitors think of Hawai‘i, the beauti- utilized by roughly three-fifths of all U.S. ful natural landscapes, pristine beaches, and visitors. unique culture usually come to mind first. Hawai‘i’s position as a food destination But Hawai‘i's food scene makes a strong im- is also not exclusively reliant on high-end pression. More than three-fifths (60%) of restaurants, or even restaurants in general for all U.S. visitors enjoyed fine dining during that matter. With 50 percent of U.S. overseas their most recent trip to the islands, while travelers expressing interest in visiting brew- just over 46 percent went to a café or coffee eries, wineries, and distilleries, there is ample house, and 36 percent took advantage of eth- opportunity for craft alcohol entrepreneurs; nic dining options. Hawai‘i’s 18 breweries clearly demonstrate Though interest in Hawai‘i’s culinary of- that the state is ready to fulfill this demand. Johnson / Tor of HTA courtesy Photo ferings spans all ages, some key differences Likewise, the 36 percent of U.S. visitors who among lifestages do exist. Older U.S. visi- shopped at farmers’ markets reveal an inter-

tors, for example, are far more likely to pa- / Rick Poon of HTA courtesy Photo est not just in the food itself, but also in how tronize traditional fine dining establishments it is made. than their younger counterparts (63.1% vs. In short, Hawai‘i’s food scene is diverse, 55.0%). Conversely, younger visitors exhib- eclectic, and increasingly important to the it higher demand for more trendy dining success of the broader visitor industry. From options such as coffee shops (53.9%) and world-renowned food trucks to hole-in-the- ethnic food (42.3%). Meanwhile, Hawai‘i’s wall poke shops to new concept kitchens by important wedding/ visitor seg- the next generation of chefs, the Hawaiian ment is likely to utilize all dining options Islands offer everything a foodie could want except fast food and family-style restaurants. and more. When it comes to deciding where to eat, Sources: HVCB analysis TravelStyles USA 2015-16, HTA U.S. visitors to Hawai‘i mirror the broad- Visitor Satisfaction and Activity 2015 data $889Houston$597Los Angeles$527San Francisco$884Dallas$889Chicago$908New York ``` https://barberstock.s3.amazonaws.com/thumb/142-3-2926_thumb.jpg Photo courtesy of HTA / Mark Kushimi of HTA courtesy Photo

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Hotel Update

Sneak Peek at Overall, the performance of Hawai‘i’s hotel cent of all visitors spent time on at least one Next Month industry remained strong throughout the of the neighbor islands. That share edged up first quarter of 2017, though there were some +0.7 points to 55 percent in 2017. Though it Spotlight On: State drawbacks. O‘ahu had a slower start than last might seem like a trivial difference, it trans- of the Industry year, with occupancy falling -1.4 points to 83 lates into 43,000 additional visitors to the percent. It should be noted that some of this Neighbor Islands. Latest Airfare Data decline can be attributed to added inventory. In regards to Average Daily Rate (ADR), Maui’s occupancy remained constant, while saw a +6.0 percent increase statewide Kaua‘i and the Island of Hawai‘i saw occu- compared to last year. Room rates increased pancy grow +2.6 points and +6.0 points re- by +4.2 percent on both Kaua‘i and the Is- spectively. These higher rates were enough to land of Hawai‘i, while O‘ahu jumped +5.8 lift the statewide occupancy +0.4 points year- percent to $233 per night. Maui, however, over-year to 81 percent. saw the highest increase in ADR, with a +9.0 These occupancy trends reinforce visitor percent spike driving ADR to $385, topping arrival data indicating greater interest in, and all the islands. The continuing rise in ADR visitation to the Neighbor Islands. Through- tracks with rapidly increasing operational out the first three months of last year, 54 per- costs.

Hawai‘i Hotel Occupancy & Average Daily Rate Q1 2017

KAUA‘I 79.8%, +2.8pt(s) O‘AHU $271, +4.2% 82.6%, -1.4pt(s) $233, +5.8% MAUI 78.9%, +0.0pt(s) $385 +9.0%

ISLAND OF HAWAI‘I 80.1%, +6.0pt(s) $264, +4.2% Source: HVCB Analysis of Hospitality Advisors, CBRE data Q1 2017 vs 2016