 My name is John Conching and I'm bringing you another episode of Hospitality of Hawaii, a 30 minute insight into what's been going on with our industry. And usually in the past, I've done it every two weeks, but take a little hiatus. And I think the last show was somewhere maybe at the early part of summer. And I just thought that there was too much verbiage and news going on about the industry. And the last thing I want to do was was regurgitate the same information that was already out in Civil Beat and the Star Advertiser and all the news channels and so forth. So it's been a few months. So now here we are nearing the end of the year. And I thought it'd be a great opportunity to somewhat recap some of the things that have happened throughout the course of the year and also talk a little bit about you know, how different parts of the industry is looking at how 2022 might shape up. So let's give it a whirl. So here we are. You know, if you can even think back on how January of 2021 was, I mean, for me personally being involved in the industry for as many years as I have been, you know, as I look back on what I can remember of the first quarter, it just seemed to be, you know, things were seeming to settle down. You know, 2020 was obviously a very crazy year. There was a lot of angst and panic. And you know, no one knew how the impacts of COVID-19 was going to, you know, further change our lives as well as change the industry. But it seemed like we got through that. You know, you know, government across the country started to, you know, have a variety of different restrictions, different responses to the pandemic situation. And I think we read every day in the news or definitely every week about the ongoing progress towards vaccines coming in. And so the end of 2020 and into early 2021 held a lot of promise. The vaccines were now available to different groups. And probably by the springtime a good portion of those available in Hawaii could get vaccinated and a lot of them were. So fast forward, you know, I do recall that when we came into spring, the Hawaii industry actually did very well. You know, there was a resurgence of visitors. And partially because there was no one else, nowhere else they could go to. You know, a lot of the other states were either had restrictions or were, you know, imposing a lot of different mandates on visitors. And at that time, Hawaii had eased up a little bit. The Safe Travels Hawaii program had begun just around there. So although there was confusion about the regulations as they differed from county to county, it ended up with a great result. So hotels were very busy, businesses were thriving again, the ones that were open and could open with the different restrictions in place. But spring break right around that Easter Sunday before and after, you know, did very well. And then that trend somewhat continued. And then summer was literally fantastic. You know, there are hotel and industry companies and partners that I've worked with that said that based on the experiences they had in the summer of 2021, they were some of the best summers that that different hotels have had. And and if you somewhat reflect back on some of the statistics that the white tourism authority reported, especially for neighbor island hotels, you know, the room rates and the Maui hotels were through the roof. I mean, high double digit increases from the same July of 2020. And of course, even exceeding July of 19, which was the watershed year for the state. So summer summer did great. Then the usual softness in September, October, and then in November, where although not bad, and you compare to 2019, of course, and it varied, like for example, November was down. Let's see, November results haven't come in. But then September was down 31% in the number of visitors, but only down 15% in total expenditures. October was down 31% in the total number of visitors, and down 15.3% in spending. So although the number of visitors, you know, is still pretty high, the deficit from 2019, because hotels in general have been able to keep their rates up to a respectable level that has eased some of the drop in spending, or the either drop in revenue. Now, neighbor islands have actually benefited from it. So all through this time period during the summer, and as I mentioned a little bit earlier, their rate increases even into the fall, while Oahu room rates have dropped, neighbor island room rates have actually continued to increase in the 15, 20, 30% increases over 2019, which is actually a pretty interesting statistic. But, you know, we don't know how November is going to turn out, but just anecdotally, from what I've been hearing, it seems like it's like October and September, where you've got, you know, generally middle, medium occupancies, and during these shoulder periods, but then you have some spikes and peaks. Like there was definitely a spike over the Thanksgiving weekend and businesses were full. You know, it's interesting how you can somewhat have a gauge when you look at some of the crowds that are at certain places. If you look at the crowds that are in front of Cheesecake Factory on Calacao Avenue, you look at the crowds that are actually queued up and around the corner at Marocame Udon on Cuyo Avenue. I know it sounds a little crazy, but you can actually kind of gauge that. And even the crowds that line up early in the morning in front of point of coffee purveyors on the backside of the international marketplace. But so here we are, December was looking like it's going to was going to be pretty good, but then more news about the Omicron variant and some of the impact that that could have. A couple days ago, Peter Ingram, the CEO of Hawaiian Airlines came out with a press release and an article that was carried about how the different country governments and how quickly they acted with respect to imposing or reimposing some of the restrictions against the potential growth of the Omicron variant has put a little setback in Hawaiian Air's plans now. And I believe they are still going to open up their flights to back to and from Australia, which is great because it had been somewhat suspended or minimized for quite a while. But this is definitely putting a chink in what everyone had thought that market would have produced, especially in the Japan market. Japan is a big part of our success. They'll continue to play a big part in the success of the overall business to Hawaii, but especially Waikiki. And at one point it had looked like that business was going to start coming back before the end of the year, especially over the Christmas and New Year's period. Now everyone's thinking that that business won't start coming back until March, April, May, and then hopefully if things don't escalate on the Omicron variant, then summer will begin to look like a little bit like the summers that we might have enjoyed in the past. So a lot of changes. I think I would personally characterize 2021 as a year where nothing great actually happened. As I mentioned earlier, there was a lot of wait and see in the first quarter. There was a big boom in the spring time, a big boom in the summer, and then not a whole lot in the fall. I will say though, for the Waikiki hotels and a lot of the small businesses that are around that area, there's been a somewhat of a little silver lining over this last weekend and maybe for the next few weeks. Unfortunately, it comes as a result of what could be a very serious situation or what is a serious situation but and hopefully doesn't grow into something much larger is the contamination that's occurring in the Redgill area. So last week, the Army and the Navy relocated a number of their Army-based families into Waikiki hotels. There have been statistics that say anywhere from 2,500 to 3,500 hotel rooms are being used and were secured at the last minute. And thankfully, it worked out that the hotels had availability that they could accommodate some of these families. But here you have now thousands of relocated military families in Waikiki and are struggling to fit into a hotel room, some with pets, some with families, and then not knowing what the situation is when they can actually get back to their home. For the hotels though and for the residents that are actually employees of the hotels and the shops and the businesses in and around Waikiki, it's been somewhat of a boon because now they can keep people working, they're not going to have that normal early part of December slow down before the holidays. We'll see how that works out and then hopefully it works out to the benefit of everybody and they get everything fixed and these military families are able to get back to their homes safely and within a few weeks. So now as we look at 2022, a very, very interesting year. So the Hawaii tourism has recently issued a couple of RFPs for major contracts. And the first one would be a $22.5 million contract for the marketing and management of its leisure market for the US market, not US only, not including Canada or any of the other areas specifically for the United States. And the other RFP that was issued out was a four and a half million dollar contract for the global marketing and management of the meeting convention and incentive markets for the state of Hawaii. Now both contracts are effective January 1st of 2022 and they are for four years with a one-year option, so a potential five-year. Now the incumbent for both contracts is the Hawaii Visitors and Convention Bureau that I'm sure has also bid on that contract as well. So as we progress in the weeks and months ahead, it will be very interesting to see who the HTA selects to carry on the mission and the objectives set forth in the RFP. Now one thing very different and it will reshape the way Hawaii markets and manages its tourism business is the resident sentiment. So I'll speak to myself first as a resident and secondly as an industry professional. So as a resident it was great to see Honolulu and Waikiki streets not crowded, beaches clean, waters clean, and I know there have been a number of articles about that. Lee Kataluna from Symbol Beach wrote a great article about you know oceans being clean and visitors not being around and in general residents having more of an ownership and kind of regaining back their island or island so to speak. From an industry perspective it was a disaster. So you can imagine you know the industry barreling along 2019 and coming to pretty much a screeching halt in March of 2020, thousands and thousands of people out of work, although supplemented fairly well with unemployment and the various supplemental checks and the various supplemental weekly unemployment stipends that they got. But now that's over. That's over and done with and it's you know there are a lot of jobs open. Hotels and businesses that have stayed open during that time period and all through the pandemic have found ways to survive. They've found ways to survive with less staff. They've been able to optimize the existing team members to service gas. They've curtailed some of the guest services. You know I think most hotels that were open had restricted or limited housekeeping services in the hotel room. Some of them have brought daily maid service back. Others are still on demand. Some are every other day. There's a whole variety of different guest services limitations or or restrictions that are still in place. But you know again the Omicron variant is going to play a very interesting part of our recovery in the business. You know the resident sentiment is upfront and center in the Hawaii Tourism Authority's RFP. It's not all about you know getting as many people in the hotel beds and in the airline seats and spending as much money as was the direction in past years. The pandemic and the institution of these destination management action plans by the Hawaii Tourism Authority for every island county has created a very vibrant platform for the islands and the individual counties to have a say and have input in how they want to see the recovery of tourism. You know the term that's used not just in Hawaii but in many other destinations around the world is regenerative tourism. How do we create a more sustainable regenerative tourism model for our state where in essence the destination is better than it was when the when the visitors leave. How can we educate our visitors pre-arrival during their search as they're searching through what destination, what island, what hotels they want to stay at. During their stay how can we remind them, how can we remind them, how can we work with all the major companies like hotels, airlines, retail merchants, transportation companies. How can we work with them to help us educate those visitors to be more mindful as they're walking down the trails at Manoa Falls, as they're going up the Nepali coastline on the Kapiai Valley, as they're going up to Volcano National Park, as they're going through all the different waterfalls, hiking trails and as they're driving through the neighborhoods. How can we educate them to be more mindful of our natural resources. So that's the challenge ahead for the Hawaii tourism authority. It's a challenge ahead for all of our businesses and it's clearly a challenge to any of the organizations and entities that are bidding on any one of the contracts whether it's the leisure contract or the global meetings and conventions and incentive contract. So we shall see. It'll be very interesting. You know, recently in 2021 there were a number of hotel openings after major construction and renovation. The Turtle Bay reopened, the Holly Kalani reopened and both hotels expecting to see a flurry of visitors that would come in and enjoy their renovated facilities, but that wasn't the case. You know, getting back to the destination management action plan committees. These committees are comprised of individuals and professionals from all walks of life. They come from a diverse range of experiences, a visitor industry included. And it will be both a challenge and a positive experience for the visit industry as they interact with the destination management committees to determine how each island, each county can work more effectively as they move to Hawaii in the future. So it's interesting. There's certainly going to be a lot of change coming up in the future. We're looking forward to a lot of activity and a lot of news information coming forth about the progress of the Omicron variant. And with that, you know, I will sign off and I look forward to bringing you more information and updates as we get them. I will not be having a bi-weekly show anymore, but it will be every few months and I'll work with the Think Tech Hawaii people to provide an update. But until then, I wish everyone aloha, mahalo, hui hou, have a very happy holidays, and Merry Christmas.