Trade war, escalating tensions lead to big drop in Chinese visitors to Hawaii

HONOLULU, Hawaii (HawaiiNewsNow) - A lucky cat figurine sits on the welcome desk at the Pan Pacific Enterprises Group travel agency in Waikiki, waiting to greet Chinese travelers as they come in.

But these days, far fewer tourists from China are walking through the doors.

In the first four months of 2019 alone, Chinese visitor arrivals to Hawaii dropped by about 25% compared to the same period last year, amid escalating tensions and a growing trade war with China.

The Chinese government has also warned its people about traveling to the United States, citing immigration issues and gun violence, and is also more frequently denying travelers’ visas.

The situation has meant a once quickly-growing segment of the tourism industry in Hawaii is disappearing, leaving businesses that cater to Chinese tourists scrambling and causing concern about the impact on the larger economy. While Chinese tourists make up a relatively small portion of all visitors to the islands, visitor industry experts say their absence is already being felt.

“Chinese visitors spend more than the average American visitor, so it is of concern,” said Mufi Hannemann, president and CEO of the Hawaii Lodging and Tourism Association. “They like to eat at restaurants, visit upscale shops. They’re adventurous and like to travel on the island, so we need to do what we can to increase the market reach for a healthy visitor mix.”

Jerome Agrusa, an associate travel industry management professor at the University of Hawaii, said high-end stores could be feeling the biggest pinch from the decline in Chinese visitors.

“Group tours do all the shopping of luxury goods because they know it’s real, not like the knock-offs," Agrusa said, adding that while group tours will drop individual travelers will still come.

On a recent weekday, Pan Pacific Group vice President Dora Woo sits in the travel agency by herself, filing papers. The company caters exclusively to the Chinese audience, and that means they’re hurting.

She said they’ve lost quite a few clients due to a higher rate of rejected visas.

Among those who had to cancel: Two customers who had purchased all-inclusive deluxe tours at $8,000 each. The package included an upscale hotel room, chartered guide, private tours of the island and fine dining options. At the last minute, the Chinese government rejected their visas.

“We cannot make that money back if they cannot come,” Woo said.

“We don’t sell many packages to customers, mostly just one or two individual activities, so we really love when people buy those deluxe packages because we’re able to make more money from that.”

Woo said the trickle down impact from a drop in Chinese tourists adds up.

She said three customers she had this month spent $50,000 on shopping alone. They bought watches and bags ― among other things ― in high-end shops in Waikiki.

The Hawaii Tourism Authority estimates that from January to April, spending by Chinese tourists was down about 22% from January to April. That translates to a loss of nearly $260 million.

The decline in Chinese travelers comes in the wake of Hawaiian Airlines’ decision in late 2018 to discontinue its nonstop service to Beijing three times a week. When the airline launched the service in 2014, it expected significant growth in the Chinese market. That never happened.

“For many reasons, including commercial and operational, we did not see the growth we had hoped for,” Hawaiian Airlines said, in a statement. “The visa restriction has been an issue as some prospective visitors are either unable to obtain a visa or are dissuaded from considering a visit to Hawaii."

While fewer Chinese are traveling to the United States, including Hawaii, they’re still traveling. More than 100 million mainland Chinese went abroad last year — a record number, according to the China National Tourism Administration. Most chose destinations in Asia, while a sliver ventured to Europe.

Hawaii companies feeling the pinch of the decline in Chinese visitors say there’s little they can do but watch ― and hope that relations between the U.S. and China improve.

“We don’t have to much power to do anything,” said Woo, of the Pan Pacific Enterprises Group. “So we just pray and wait."

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