Global Tourism With Aloha

Sep 22, 2017

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Sustainability was the theme of this week’s “global summit” put together by the Hawai‘i Tourism Authority. With over nine million visitors projected this year, the Chair of the State Senate Committee on Economic Development, Tourism and Technology told HPR’s Noe Tanigawa we may already have too many tourists. Senator Glenn Wakai says it’s time to re-think the industry, in the concluding report of our series “Traveling Money: Managing Hawai‘i’s Tourism Future.”

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The week of September 18, 2017, the Hawaii Tourism Authority hosted its annual Global Tourism Summit.  The theme this year has been Sustainability.  HPR asked State Senator Glenn Wakai, Chair of the Economic Development and Tourism Committee, with tourism officials saying “Nine million next year, let’s go!” are you ready for that?

Wakai:  I think we’re over saturated.  I think maybe somewhere around seven million could be the sweet spot for us.  And that sounds terrible to say because there are so many in Hawai‘i who live off of tourism but just because we go for a lower body count doesn’t necessarily mean we see less money churning through our economy. 

Senator Wakai is also Honorary Consul for Palau, a Pacific island nation both  heavily dependent on tourism and searching for a new model.  The Asian Development Bank (ADB) issued a report in February 2017 noting large tourist increases are masking severe infrastructure challenges ahead for Palau.  The report recommends a comprehensive plan moving away from mass tourism toward lower volume, higher spending visitors. 

Palau was the first place on earth to declare a shark sanctuary, and has reaped rewards of increasing shark tourism for its efforts.  In 2016, Palau banned commercial fishing in 80% of its waters, protecting its ocean resources and its future sports fishing industry.   In 2015, Palau saw record arrivals from mainland China, leading to a sentiment that the islands were becoming overrun.  In response, a 50% reduction was imposed on visitors from China.   

Beginning a new term in office this past January 2017, Palau’s President Tommy Remengesau cited the ADB report and made rebranding Palau for luxury tourism a top priority.  He proposes allowing construction of only high end resorts in the future, offering tax breaks if resorts figure out their own energy, infrastructure, and water systems.

Wakai:  So if we take the approach that Palau is, saying that we’re going to reduce the footprint of our visitor industry but increase the amount we get out of each visitor, then we’re at a good place.

In 2015, Palau saw record arrivals from mainland China, and responded to environmental and social concerns with a 50% reduction in flights from China.  Could a reduction in tourist arrivals be something  Hawai‘i should consider?

Wakai:  That’s going to be hard for the tourism industry to embrace because they’re profit driven.  A lot of them are mainland owned and they need to show year over year increases in profitability. So for them it’s going to be hard to digest, “What do you mean we’re not going to chase more people?  Well, are we going to mortgage the future of tourism for the penny today.  That’s going to be a tough one for the industry to grapple with.

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Do you see any one really trying to grapple with carrying capacity, is there a limit to the number of tourists we can accommodate?

Wakai:  The fact you and I are even having this discussion...we should have had this discussion four years ago.  But I think we’ve gotten to the point where it’s reached a boiling point particularly  for some neighborhoods, the Lani Kai's of the world, Hanalei, Princeville, there are certain pockets that are overrun by visitors, some of whom have little regard for culture and environmental preservation as well as just putting too many cars on neighborhood streets and partying late into the evening.  All of these pressures have finally come to the point where we as a state have to have this discussion as to what’s the sweet spot?  Have we maxed out the number of visitors we should be embracing to come to our shores?

Wakai:  President Remengesau has the right attitude and approach to managing tourism.  He understands tourism should be something he can share with generations to come, versus in all honesty, Hawai‘i’s approach to tourism is just, Bring me more bodies, we’ll have their wallets emptied out when they come here.  That, I think, is a little foolish and short sighted because in my opinion we’re mortgaging the future of tourism.  The kind of measured growth and smarter growth would probably be the better approach. and I like the idea that Palau is going after the high end visitor, not going after the lower thrifty tourist.  I think Hawai‘i  could learn a lot from what Palau is doing in managing the number of flights there. That’s the first way to limit the number of folks and also to increase the cost. 

When I first went to Palau fifteen years ago it was thirty dollars to get like the Disneyland ticket where you can go to all the islands you want.  That thirty dollar ticket, I think it’s about $120 dollars now.  They’ve also used the pocket book, the cost of tourism, to help insure they’re getting a quality visitor, rather than one who maybe is not going to be so thoughtful about preserving the environment as well.  I think it’s a smarter approach Palau is taking, that may be something Hawai‘i might want to replicate in some ways.

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Kambes Kesolei is an award winning digital media journalist and the editor of Tia Belau, a twice weekly newspaper in Palau.  

Was the reduction in Chinese flights viewed as a success, then?

Kesolei:  There’s a debate in the community at large about the impact of that decision reducing the number of flights.

Hotel operators, those providing lodging to Chinese, it really hurt their businesses.  Their business is really based on numbers coming in.  But also, on the other side of it, there are local tourist operators, for example, the boat owners, even though there are big numbers coming in, they said it did not reflect in the number of customers coming and renting their boats.  Kesolei says many Chinese visitors purchased a “vertical package” with flights, accommodation, tours, meals and more included in one price, using Chinese-owned amenities and vendors.  There was no trickle down community benefit from this arrangement. 

According to Kesolei, since the 50% reduction of tourists from China, tourists overall declined close to 30%. The bulk of reductions were from mainland China, Hong Kong, and Macau, but there were several factors at work.  Since the 2015-16 travel season, Chinese government policy discourages travel to countries that do not have diplomatic relations with China, Palau does not.  In addition, one of Palau’s primary attractions is off limits.  A severe drought hit the islands in 2015-16, and scientists believe the drought is linked to a die-off in one of Palau's most important attractions.  Jellyfish Lake is now nearly bereft of the stingless invertebrates adventure seekers used to swim with.   A similar die off happened in the 1990’s, and elders in Koror state have banned activities around the lake until it recovers.

Tourism generates close to 60% of Palau’s GDP, and Kesolei says all estimates are it will continue to be so.  That is why the government has issued a Palau Responsible Tourism Framework.

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Kesolei:  It’s Palau’s vision and map, it calls for management and coordination to support and enhance Palau’s environment and people.  That is a big direction this government has taken on. This Palau Responsible Tourism Framework is to switch from the unmanaged approach to tourism development that has characterized what Palau is today to a strategy that invests in high value growth instead of high volume growth.  It also tried to invest in Palauan entrepreneurs to be part of this tourism revenue.  That’s the vision for the future of Palau.

Kesolei:  In 2016, Palau passed monumental legislation called the Palau National Marine Sanctuary act.  It closes 80% of Palau’s waters for fishing activity.   It is also consistent with Palau’s vision, foreign fishing fleets take sharks, other fish, and if Palau want sot move into high quality tourism it needs to develop sports fishing activity, to attract sports fishermen to come to Palau, another niche fishing industry out there.  Those are all parts of the equation for Palau building its tourism  economy to be strong and sustainable into the future.

Palau's Responsible Tourism Framework also calls for carrying capacity studies.  A study will begin after November of 2017.

Kesolei:  There are people who want to see Palau develop like Hawai‘i or Tumon Bay in Guam.  There are 

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also many in the community who want Palau to develop with slow and managed growth.  Development that would fit its environment is what the direction is going and I think the people understand that and there is still that sentiment that when you look at many areas around Palau you still see a pristine environment.  And hopefully when there’s development, there’s going to be hotels, but at the same time you can still see the pristine environment.  That is the sentiment I see.   

Kesolei notes,  tourism experts caution against pricing yourself out of the market and becoming "another Tahiti."  It's instructive to look at problems on the other side of the coin.  In this German article on Tahiti tourism the tourism minister appears satisfied with their positioning.