Your vacation to Hawaii is getting more expensive. Visitors are spending more on hotels, food, transportation and recreation expenses now than they did pre-pandemic, due to an increase in demand and supply issues. And while many are forging on no matter what, some have decided to skip Hawaii for a more affordable destination.
The popular Hawaii restaurant Dean’s Drive Inn recently closed, citing the rising cost of food and supplies. Other businesses have had to raise prices, such as tour operator Skydive Hawaii, which announced an added fuel surcharge per tandem jump.
“The main one that’s been going up the most has been fuel and energy, but then second to that, it’s been transportation and food,” Steven Bond-Smith, assistant professor at the University of Hawaii’s Economic Research Organization, told SFGATE. He says that higher aviation fuel prices will be passed to consumers in higher airfares.
“It’s affected the cost of running services,” Cecil Morton told SFGATE. Morton is the CEO of several Hawaii transportation companies, including SpeediShuttle and Holoholo, a Hawaii-born ride-hailingcompany with drivers across the state.
“Fuel’s up 70% in Hawaii, so our Holoholo independent contract drivers are experiencing the pain of higher operating costs,” he said, adding that labor and insurance — including medical, building or workers’ comp insurance — is expected to increase.
Even a classic symbol of Hawaii, the flower lei, is getting more expensive. In the past, lei were always picked from farms in Hawaii, but now the popular purple orchid flowers that visitors receive are largely brought in from overseas suppliers. Lack of supply and labor shortages are to blame, and continue to be a problem.
“We have a greeting service, so we’re buying leis and that was actually a stressful operating challenge,” Morton said. “We couldn’t get leis, so we had to cancel when the state reopened. We had to cancel that offering for months and months and months. … Our suppliers weren’t able to supply leis.”
To help when the supply is low, Morton said SpeediShuttle has now added the kukui nut lei as an additional option.
The pent-up demand to travel, due to the pandemic, has particularly caused hotel rates, especially on Maui, to skyrocket. Maui’s average daily rate jumped from $401.10 in 2019 to $521.63 in 2021, according to a Hawaii State Department of Business, Economic Development and Tourism report. The Big Island, or Hawaii Island, is the second highest, at an average daily rate of $340.70.
“The average trip cost is way higher than it was before COVID. People are spending money on travel regardless of the price, even though their tickets might be double,” Monica Vibe, a California travel agent with Travel Leaders Executive, told SFGATE. She’s been booking travel to Hawaii for the past 32 years.
“A lot of times, my Hawaii people are dead set on Hawaii, no matter what,” she said. “I have had a few people choosing an all-inclusive in Mexico over Hawaii because of the cost. I’m also seeing many resorts with little or no availability, so that’s also affecting their decision.”
A popular destination for U.S. travelers, Maui’s hotel prices are rising due to inflation, but also lower inventory from moratoriums placed on new hotel construction and new transient accommodations.
“Hotels are not immune to the impact of what’s happened with inflation,” Kekoa McClellan told SFGATE. He’s a spokesperson for the American Hotel & Lodging Association and was asked to speak on behalf of the Hawaii Hotel Alliance.
“The industry has dealt with supply chain issues across the country like everyone else,” McClellan said. “Our smaller, independent hotels here in the Islands and across the country had issues with things as simple as coffee cups and straws for their food and beverage service.”
McClellan said the cost of electricity is related to the costs of transportation and fuel, and these are related to the cost of goods and services, so it will translate to increased prices across the board.
Food is becoming a larger expense as the price of food is going up, and will continue to rise over the next two years, according to UHERO. Though not widespread yet, McClellan is already seeing “reduced consumption on the food and beverage side” at hotel restaurants and bars.
Vibe, on the other hand, said that her Hawaii travelers are not cutting excursions or sacrificing experiences.
“People are actually just saying, do it, you know? It’s really wild,” she said. “Book as early as you can, don’t wait to see if the price goes down, because it’s not. I would also say more than any time ever, it’s crucial to book your excursions because they’re filling up way in advance.
“Also be patient with the hotels and the tour operators and the airlines,” Vibe said, “because they are under a lot more pressure than they have ever been.”
As an avid traveler and enthusiast with a deep understanding of the dynamics affecting travel industries, I can shed light on the various factors mentioned in the article that are contributing to the increased expenses for visitors to Hawaii. My extensive knowledge in economics and the travel sector allows me to provide valuable insights into the challenges faced by businesses and travelers alike.
Firstly, the surge in travel costs is attributed to the intersection of demand and supply issues exacerbated by the global pandemic. The pent-up demand for travel, following the restrictions imposed during the pandemic, has led to a significant increase in visitors to Hawaii. This surge in demand has, in turn, driven up prices for hotels, food, transportation, and recreation expenses.
Fuel and energy costs have witnessed a substantial spike, affecting transportation services such as airlines and ride-hailing companies. Aviation fuel prices have surged, leading to higher airfares for consumers. As mentioned by Steven Bond-Smith, an assistant professor at the University of Hawaii’s Economic Research Organization, fuel and energy costs, along with transportation and food expenses, have been on the rise.
Businesses in Hawaii, including iconic ones like Dean’s Drive Inn and tour operators like Skydive Hawaii, have had to adjust to the increased costs. Some have even closed down, citing the rising cost of essential supplies, particularly food. Tour operators have implemented additional charges, like fuel surcharges per tandem jump, to cope with the heightened operational expenses.
Moreover, the impacts of supply chain disruptions and labor shortages are evident in the closure of popular Hawaii restaurant Dean’s Drive Inn and the scarcity of the traditional flower lei. The iconic lei, once exclusively sourced from Hawaiian farms, is now largely imported due to supply and labor challenges. Even transportation companies like SpeediShuttle have faced challenges in procuring leis, leading to cancellations of services.
The hotel industry in Maui has witnessed a significant surge in rates, driven by a combination of factors such as inflation, lower inventory due to construction moratoriums, and increased demand. Maui's average daily hotel rates have seen a substantial increase from 2019 to 2021, further adding to the overall cost of a trip.
In conclusion, the rising expenses for travelers to Hawaii are a result of a complex interplay of factors, including increased demand, supply chain disruptions, rising fuel and energy costs, and challenges in the hotel industry. These dynamics highlight the resilience of the travel sector but also pose challenges that both businesses and travelers must navigate.
