Hawaiian Airlines CEO Mark Dunkerley called China the “economic salvation” for Hawaii tourism but said the state is ill-equipped to handle the expected surge of tourists who are likely to come in future years.
Dunkerley, the keynote speaker Thursday at the Retail Merchants of Hawaii annual meeting at Hilton Hawaiian Village, also called the airline’s short-lived Taipei route “a costly mistake” and said Hawaii needs to be promoted first as a destination before trying to sell tickets to prospective passengers.
“Where we are with the Chinese visitor is simply where we were back here with the Japanese visitor,” said Dunkerley, whose airline inaugurated thrice-weekly nonstop service to Beijing last week. “We start at ground zero in relative terms, and the very same exercise of building a visitor experience which appeals to the Chinese visitor, who is very different than the Japanese visitor, is as much a task and a challenge today to the Chinese as it was in the ’70s and ’80s as we started getting the Japanese visitor coming.”
The Chinese rated Hawaii as not being tourist-friendly in a survey that Dunkerley quoted.
“Their perception is our reality,” he said. “You might not like it. You might not agree with it, but that’s what they believe. As long as they believe that, we’re unlikely to get our fair share of the Chinese visitor.”
He said the roadblocks standing in the way of the state’s success are not enough visitor accommodations to handle potential demand, too many high-end accommodations and not enough at the medium and low end, inadequate promotion of the state, and the lack of Mandarin-speaking employees in Waikiki.
“For us to be a good destination of Chinese visitors, the level at which Mandarin-speaking services are available in the community has got to expand dramatically,” he said. “It’s got to be represented in the restaurants, not just on the menu, but also in the ability of waitstaff to speak in Mandarin. It’s got to be represented in small boutique retail and hotel reception. If we cannot create that, like we did for the Japanese, then we’re setting ourselves a very, very tall bar to get over. So there’s a lot of work to be done.”
Chinese arrivals in Hawaii grew 13.5 percent to 132,634 in 2013 from 116,866 the previous year, and through the first two months of this year were up 4.8 percent to 26,444 from 25,222.
But Dunkerley said those numbers can grow dramatically. He said 3 percent of Japan’s total population, or 3.82 million people, visited the U.S. from Japan in 2012. Nearly half of those visited Hawaii, he said.
“If you take that 3 percent and apply it to the Chinese population and extrapolate it out, you would get to 39 million coming to the U.S.,” Dunkerley said. “In other words, 10 times the size of the Japanese visitor base. And if you take half of that roughly, you will get 15 million visitors to Hawaii from China. That won’t happen overnight, and it may not actually ever happen, but it gives you a sense the demand from China could represent.”
That would be a problem if more hotels are not built, he said.
“The reality is we could not absorb the level of demand that arguably is upon us today, and certainly that which is projected out into the future,” he said.
Dunkerley said the airline, the Hawaii Tourism Authority and the community are all responsible for promoting Hawaii.
“What we discovered in Taipei was a very painful lesson,” he said. “Japan and Korea, we take for granted that people fundamentally understand a Hawaii proposition. And therefore we spend our time trying to sell customers on the virtues of our bit of Hawaii.
“In these new markets, we have a more elemental issue to overcome, which is we need to promote Hawaii. They need to understand why Hawaii is such a terrific place to visit before we can get in there and say you need to come through our shop door (airplane) rather than someone else’s shop door.”
The Chinese were the highest-spending tourists in Hawaii from any region at $397.30 a day last year, and Dunkerley said he personally witnessed their prosperity on his two recent trips to Beijing over the last six months.
“The level of wealth and prosperity and the sheer scale of things is terribly, terribly impressive and important to all of us in this community,” Dunkerley said.
It is important, he said, that Hawaii act now to prepare for the growing number of Chinese arrivals.
“The Chinese represent the economic salvation of the state tourism business over the long term,” he said. “I’m not talking about next year. I’m talking about 10 years and 20 years from now, and it won’t be a flash in the pan. It’s a permanent shift.
“We as a community have to come together. It’s an economic opportunity we want to grasp. It’s important because the economic activity that we all represent pay taxes, pay for the things that are important in this community education, health care and for people who are on defined benefit pensions that have been promised they will be able to retire at a certain standard of living. That will only come to pass if we raise the level of economic activity.” ___