 Aloha, this is John Kanching. Welcome to another version of Hospitality of Hawaii, where every two weeks I have an opportunity to speak with executives, leaders, and various individuals who are associated or deeply engaged in the visitor industry to talk about trends, what's been going on, and just hear their thoughts, recommendations, and what's going on in their particular organizations and how they feel about the industry overall. It's been about four months, I believe, since my first interview or first show with Jay, the one of the executives at ThinkDec, Hawaii. And since then, I've had a number of different guests on the program, including hotel executives, transportation, airlines, technology experts, various individuals that are associated with organizations and causes that are affiliated with the industry and very important, including hospitality sales and marketing executives international, as well as Climb High with Julie Morikawa that does a fabulous job with preparing high school students with opportunities not only in the hospitality and visitor industry, but she's now connecting with all types of businesses around the state. So thank you if you've listened before and if you're a new viewer, we appreciate any comments and feedback that you have. So actually today, I thought I'd do something a little bit different rather than having a guest and having him or her speak about their particular organization and what keeps them up at night. I thought what we do now that it's been about four months and there's been so much happening in our visitor industry over the last probably the last two months, especially, I thought I'd take a little step back, review some of the trends and reports that the Hawaii Tourism Authority has put out, you know, more for, you know, food for thought. I think if you're actually engaged in the visitor industry and especially in the hotel side, where it's clearly report analytics driven, you have probably seen most of these reports that I'm talking about. But if not, if you're not at that particular area where you're engaged with a lot of those meetings, then chances are, you know, most times you might have seen some of the information that I'm about to share with you on the news or maybe in the newspaper. So we've got little less than 30 minutes. So why don't we get started? We actually have quite a bit to get started with. And with that, I'd like to ask Eric if he can pull up some of the information. And this is a recap that I believe the Hawaii Tourism Authority sent out recently, which talked about hotel performance for the month of June. Okay, so basically, I mean, it's saying that, you know, the Hawaii industry has done really, really well. You know, for this first six months, I mean, it's somewhat deceiving because obviously January, February, or March were not that great. So yeah, it's been pretty amazing that the, and part in that that I'm looking so closely here, because I'm actually trying to see this, you know, according to the Hawaii Hotel Performance Report, which is published by the HTA, so the statewide rev par in June of 2021. And this is where all hotels across the state, I believe they actually had 138 properties that reported with about 45,000 room nights or rooms, which is about 83% of all the lodging properties in the state, with at least 20 rooms or more. And it excludes vacation rental and timeshare properties. They're not included in this particular survey. But it's really interesting, it shows that the rev par or the revenue per available room in June of 2021 was $247, which obviously was a huge increase over 2020. But actually was a, so it was a, let's see, hang on a second. And the ADR was $327, 127% over 2020, and occupancy was 77%, which was obviously a huge percentage occupancy gain over 2020. But when you talk about comparison against 2019, which is the real measurement, the ADR or the average daily rate was actually 14.2% higher, which is pretty amazing. Now occupancy was still a little bit lower, down 6.9% from 2019. But again, we're talking about no Japanese visitors and so forth. In short, hotels have been doing very, very well. And it's going to be really interesting as you move forward into the next order. Because from the spring break, hotels did really well, and generally speaking, it caught the hotel by surprise. But then as May continued on very strong, the summer continued on strong, and then July, even though the July results are not in, but all the hotel people that I've been speaking to, they have been doing tremendously well, running in the 90% occupancies. I was speaking to someone at Sheridan Waikiki a couple days ago, and they were near capacity as much as they could possibly be. I know even some of the Cuccio properties are doing very, very well, running either 100% or in the high 90s as well. So that's terrific news. So why don't we segue to the next document, Eric? And really, this one talks about the air seats that are coming in, because clearly, we're a destination that you can't drive to. So the number of air seats that we have is clearly tremendously important for us. So Eric, could you pull that document up? So this one here, you can see as a kind of a summary of the number of air seats into the state for the period of July of 2021, all the way through September of 2021. So this is a forecast provided by the various airlines with regard to how many seats they expect will be in the market. So I'm not going to go month by month, but if you look at the total for that Q3 period, and this is comparing 2021 against 2019, you can see up on the top here, the number of seats is actually for the entire state, it's actually down a little bit because of the drop in the international flight. But if you look at the domestic market, I believe that the 28% increase in the number of air seats coming to the entire state, then when you look at each island as you continue on the spreadsheet to the right, you see Honolulu 22.7, Maui huge increase at nearly 33%, Big Island even larger at 46%, and then so on and so forth, but clearly tremendous. And you look at where most of that growth is coming from, it's coming from seats that are originating from flights coming from the West Coast. No surprise that I think I read something like 50 some odd, 56% of our business comes from the West Coast. And if you could leave that spreadsheet on, Eric. And now if you look toward the middle of that spreadsheet, you see the US East, now the US East, the number of seats that have grown statewide from 2021 over 2019 is in the 30% range, Honolulu 23%, Maui nearly 30% and so forth. Scrolling a little bit further down, you can see where the decrease is. And again, no surprise, if you look at the international markets 2021 in the third quarter of this year is going to continue to suffer. I believe statewide that's a 85% decrease from 2019 and in Honolulu it's about the same. The big number of that is Japanese. The Japanese amount of seats are in the third quarter of this year is going to be about 92% less to Honolulu than it was the same time. And then, correspondingly, you look at the decrease in seats from Canada, other Asia, which would be primarily Korea and China, and then Oceania because clearly, Australia, New Zealand are continuing to have their share of challenges. So it's going to be interesting to see as we look at the air seat projection for Q4. But speaking to some of the Japanese counterparts, they're saying that they expect airline seats to increase for the October to January period. I think a lot is going to happen or a lot of what's going to happen relative to the fourth quarter of 2021. It's going to be what happens as Japan moves through the Olympics. You hear about some of the athletes having issues. You hear about Japanese citizens feeling that they did not want the Olympics in there and being very concerned. The good news is that the number of vaccinated individuals in Japan seems to have been growing pretty steadily. I think about two weeks ago or so it was about at the 18% range. And now I think it's well over 20%, maybe hitting the 25% to 27% range. So it's growing steadily. And as of today, July 26, Japanese travelers will be able to apply for the vaccination passport. And the vaccination passport, if they're fully vaccinated will allow them to travel abroad and not have to quarantine for 14 days when they return to from whatever destination they go to. So I know today is the first day that they can actually apply for the vaccination passport. When it might manifest itself, when people start traveling, kind of remains to be seen. And again, with the number of vaccinated individuals in Japan still in the 20-some odd percent, we'll see. We'll see what happens there. So more to come with that. Kind of in summary, hotel performance continues to be very strong through the month of June. And from what I understand, the projections for the balance of July into August and September are actually looking pretty strong. As we move a little bit forward, we'll talk a little bit about some of the travel agency booking trends as provided by the Hawaii Tourism Authority in conjunction with, I believe, global travel and research that they've contracted with to provide this information. So we're not going to go through the entire thing, but this is kind of an overview. So Globe Agency has been contracted to do this information. So if you could move forward to the next one, Eric. So this is an interesting one. So I decided to just talk about this particular quarter. And we're not going to go month by month. But when you look at the travel agency booking for future arrivals, so you can see the blue being 19, obviously the green, where it's very low was 2020 and the red being 2021. So July, this is for statewide, all market segments, again, not having virtually any international visitors travel agency bookings for future arrivals. And again, this was done probably in the month of May and June. You saw July numbers are not that far down from July of 19. But then when you look in August, August is actually getting a little bit closer. And the good news is that September, as of this point, when this particular report was done, the future bookings across all market segments for the month of September was actually higher at this point than it was in 2019. Now, if you could go down, and I believe that, because now this is the US only US market. Again, good news, you can see how September is pacing, pretty good. And if you look in the side on the further right, I think part of it might be blocked with the think tech logo out there. But the good news is that you see advanced bookings for 2022, which is in the yellow for Q1 of 2022. Advanced bookings from the US right now are higher than they were in 2020 and 2021. It does not compare it against 19, though. So that's, that'll be kind of interesting to see once we get into a, I believe once we get into a later period, the Hawaii tourism authority should probably request that comparison because clearly comparison against 2020 Q1 and 2021 Q1 would not be good because 2021 Q1 was still, we were still in the midst of the pandemic. Next slide, Eric. So this is the island of Oahu. Island of Oahu done very well in July, as you can see the in the 2021 numbers are actually higher than it was in 2019. And again, you know, without any international visitors and same thing in August, August is higher and September is higher. So great news. It's going to continue doing very, very well. Okay. Now this one shows Japan, Canada, Korea, as you can see those numbers in red for 2021 are very, very soft and they'll continue to be so for quite a while. So let's move to the next island. So Maui, I'm sure, you know, most of you have read and heard segments and news about how Maui residents feel overrun by tourism on a highway. You know, some concern because it's blocked off for emergency vehicles have difficult time getting through because of the all the rental cars and other vehicles parked on the side of the road. You can see Maui, Maui did not as good in July as they had in 2019, but doing very, very well in the U.S. market overall in August and September. As I stated before, I mean, this shows great advance booking for the month of September, which always seems to kind of take a little drop. So the next island. Yeah, next island, the island of Kauai. And again, similar. Definitely picking up steam as we go through August and then September showing, showing increases from 2019. And then the last island should probably be the big island. Yeah. So we're not actually going to go through Lanai and Molokai. I mean, they're showing similar trends, good numbers compared to 2019 and even to September, but the numbers are very small. So you see the big island. The big island is actually kind of interesting. The big island in August lagging a little bit because, you know, it was a popular destination for Japanese because Japan Airlines had those direct flights from Tokyo into the big island, especially on the Kona and Kohalakos, but they're doing very well in the month of September. So terrific news. And, you know, it looks like it's going to continue. The question is, you know, will it continue in Q4 in October to December? And that's interesting. So it brings me to a couple of thoughts. And, you know, just in speaking with different members of, you know, they're working in different hotels and different attractions and different organizations that while hotels are busy, they're certainly not back up to full staff. And part of it is the fact that you have waiters, waitresses, and maybe some of the lower paying positions that are choosing not to go back to work right at this time because you've still got the unemployment and the, I believe, the federal $300 subsidy until, I think, maybe the first or second week of September. And maybe now they make more money not working versus, you know, working and getting paid less. So I know attractions, restaurants, hotels are suffering as a result of that, but also to, it's clearly clear that some of these organizations, hotels and companies are withholding from bringing back their full staff. Now's a great time. My profit margins are probably better than ever or better than they have been for quite a while. And understandably, the hotels and owners need to recoup some of the revenue and profits that they may have definitely lost towards the ending of 19 and pretty much all the way through 20, and probably the first three or four months of 2021. Clearly no shortage of management level positions of people that want to go back to work, but they're not being called back to work because, you know, again, the desire to keep you know, labor costs as low as possible and maximize. It'll be interesting to see as you move forward, how long can the current staff maintain the level of work and stress that they're currently going through. I know for a fact that you've got a lot of management people who are, you know, working long hours, doing a lot of different jobs that they might not otherwise have been tasked with. So it'll be interesting to see. Just yesterday, there was a, or the day before, there was a loud demonstration in front of the modern and the Ilikai hotels, because the union are contending that the modern and possibly the Ilikai are running at nearly full occupancy, but have chosen not to bring back many of their housekeepers and not to bring back full service. I know there was an article in the paper about that. So it's going to be really interesting to see as the months go by, where's that tipping point where hotel managers, hotel owners need to start bringing back more staff to provide the level of service that we're known for. I mean, room rates are, as I talked about a little bit earlier, room rates are clearly well surpassing 2020 and they're getting close, if not equal to, or maybe in some cases a little bit higher than they were in 2019. So maybe it's about time that we bring back that nightly cleaning or the daily cleaning for all the guest rooms and some of the other services that may have been cut and not brought back totally in full since the hotels have reopened. And for the most part, I believe that most hotels are open, either 100% capacity or if not 100%, they're pretty close to it. So Eric, why don't we go to the Hawaii Tourism Japan section? So I wanted to share this information. So although we're still struggling with Japan market, I think everyone who's involved with the Japanese market that includes all the attractions, the hotels, the Japanese tour operators themselves, transportation companies, airlines, they're all clearly looking forward to when that market will come back strong and robust again. And I think everyone believes that once Japan gets their vaccination level up to a certain period where they feel more comfortable with maybe reducing the 14-day vaccination period down to maybe 10 days or seven days, or more people get the vaccination and they apply for that vaccination passport program, which allows them to bypass that quarantine upon return. I think everyone feels that that Japanese market is going to come back very strong and heavy as we move forward. So we're looking forward to that. And so as part of the thing, I wanted to share this information that Hawaii Tourism Japan puts out. They had a partners meeting and they shared this particular deck. Now this is not by any means the entire deck, but it is a portion of that. Can you put that up on the screen? Great. So I talked a little bit about the vaccination passport program. So currently right now, this is what you have. Obviously, the 14-day quarantine and then upon your entry into Japan, you have to have that PCR test. So now as we move forward, you can go to the next slide here. So this is how the Hawaii Tourism Japan kind of looks at that. They say, hey, right now, we're in that period where people are starting to get vaccinated as we move towards the later fall. The goal is that obviously a greater number of people get vaccinated. And then we're able to kind of get back to business to semi-normal. And let's go to the next slide. So this was an interesting slide here that Hawaii has always been the most popular overseas destination for Japanese traveling overseas. Now Guam, Saipan, Okinawa are the most popular short-term destination for Japanese. And Korea and China have always been important as well. But from an overseas standpoint, Hawaii is clearly the most important destination. So when we look at this here, this particular agency, Sky Scanner, in the first six months of the year, and this is the number of search, the volume of search that Japanese consumers did, I mean, in 2021, Hawaii made a big jump from being the sixth most searched destination worldwide to now the number one. And it's probably because Hawaii in general has done a terrific job relative to the controlling, the spread of COVID, the number of people that have been vaccinated. While we may or may not get to that 70% level, which Governor Ige wants to, we have ramped up to that 50 and 60 some odd percentage very quickly. And for the most part, anyone who wants to be vaccinated has pretty much been vaccinated already. Now it's a matter of getting some of the others who have not been vaccinated, vaccinated. So while frustrating, the news boasts well for not only the domestic market, but even for the Japan market, the one that continues to be a point of frustration for many is, it's what's happening in Oceania. Oceania has been a very, very strong source market for Hawaii, in terms of the Australians loving Hawaii and also staying for a long time. They have a longer length of stay than almost any other destination, except maybe Europeans. Canada is looking better. I know Canada and the US have opened up some of their borders on a limited basis, but I think it's just a matter of time before Canada opens up again. And Japan will. So all in all, I apologize because not being able to to be able to view some of those presentations is clearly as I would like to, but I hope this is able to share some of the update on what's been happening in the industry, especially over the last couple of months. So all looks great. I know we've got some growing pains with resident concerns about too many people crowded restaurants can't get in street being crowded or something. But but again, we're going through growing pains. Things happened a lot sooner than or a lot quicker than we all expected. But but hopefully in the next few months and as we work to the end of the year, things work out very good. So I hope you found that interesting. Stay tuned for two weeks from now when we have another guest. And my my next guest that was supposed to be on last Tuesday, but had to cancel because of business requirements is on the development side. So that's going to be very interesting for me personally. And I hope for others to hear what the development community and investment community is thinking about in terms of Hawaii real estate and asset moving forward. So thank you very much for viewing. This has been hospitality Hawaii and stay tuned for our next show on the think tech Hawaii live streaming platform. Aloha.