Hawaii Leadership Forum: No slowing down on demand or pricing, execs say

HONOLULU — Despite inflation and recession concerns, Hawaii’s sky-high prices don’t show signs of softening anytime soon.

There appears to be no ceiling for pricing and seemingly inexhaustible demand, suppliers selling the Islands say.

Six executives in the wholesale-travel and tour operator fields addressed the question of rate during a panel discussion at Travel Weekly’s 2023 Hawaii Leadership Forum here. The topic was introduced by editor in chief Arnie Weissmann, who moderated the session.

Going back to the height of the pandemic era, once the islands reopened to tourism, as Jack Richards, president and CEO of Pleasant Holidays, put it: “people were paying anything to go anywhere, anytime, any price.”

“Hawaii is the highest priced destination we offer,” he said. “Higher than Europe. Higher than Japan and Asia. Significantly higher than the Caribbean and significantly higher than Mexico.”

Richards added that price is not determined by the wholesaler. “It’s not us,” he says, “It’s the market that dictates the price.”

Ray Snisky, group president of ALG Vacations, added that the price may be set initially to see how consumers respond, but it’s the customer who ultimately sets the price. “Someone could argue the prices are high, but you know, at the end of the day, if customers are filling a place, you’re not going to cut prices,” he said.

“Our demand was up, our business was up 40% in ’22 over ’19, which was a record year. And then it has been up another 20% this year,” said Camille Olivere, chief sales officer at the Globus Family of Brands. She said the bookings stemmed from pent-up demand following the pandemic-era lockdowns and from people rebooking trips that were originally scheduled for 2020.

Snisky, however, thinks it’s no longer a question of pent-up demand. “I think there’s a certain sense from customers that this is the new normal, and this is what you’re going to need to do,” he said. Travelers have a choice: “You can pay this rate, or you can skip going to those products and go someplace else. But we haven’t seen fall off yet in Hawaii.”

Kama Winters, president of Delta Vacations, said that the demand could also be due to a change in consumer mindset: Travelers work patterns have changed, and they want to spend more money on experiences. “We’re really seeing no slowdown, either on the vacation side or the Delta air side,” Winters said. “I think until we have some seismic shift there; consumers are just willing to spend for those experiences.”

Susan Ogden, executive vice president of Gogo Vacations and Liberty Travel, said she noticed that consumers are taking more than one vacation. They’re traveling more frequently and finding ways to fit it in their budget, such as saving for one big trip, like Hawaii, and taking a few smaller ones to budget-friendly destinations.

Shifts in pricing and consumer mindset may have shifted, but some things are returning to pre-pandemic levels. “If we were to look at a graph for us right now, what’s nice is 2023 looks like 2019. The booking trends and patterns are the same, so we’re normalizing there. It’s just higher,” says Melissa Krueger, CEO of Classic Vacations. “This is what people want to do, and just in terms of marketing, I have to say, price is only an issue in the absence of value.”

Source: Read Full Article