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Tourism & Hospitality

11.6% Drop in Canadian Visitors Threatens Hawaii Tourism Revenue

·7 min read·⚡ Act Now

Executive Summary

A significant decline in Canadian tourists, driven by a boycott movement, is directly impacting Hawaii's tourism sector, necessitating immediate adjustments to marketing and revenue strategies. Without quick action, businesses face sustained revenue loss throughout the peak booking season.

  • Tourism Operators: Expect booking declines and potential need for aggressive discounting or new market outreach.
  • Small Business Operators: Reduced visitor foot traffic could impact sales for retail, dining, and service providers.
  • Investors: Monitor portfolio performance in tourism-dependent sectors; consider shifting investment to more resilient segments.
  • Action: Tourism operators and adjacent small businesses must re-evaluate marketing spend and explore alternative visitor markets within the next 30 days.

Action Required

High Priority

Continued decline in a significant visitor market could materially impact bookings and revenue within the next 30 days.

Tourism operators should immediately assess their dependence on Canadian travelers and reallocate marketing resources to alternative feeder markets or ramp up domestic outreach within a 30-day window to mitigate booking gaps and revenue shortfalls. Small businesses need to focus on attracting local and domestic patrons and explore cross-promotional opportunities with unaffected businesses.

Who's Affected
Tourism OperatorsSmall Business OperatorsInvestors
Ripple Effects
  • →Reduced visitor spending → Lower demand for hospitality services and retail goods → Potential for reduced operating hours or staff hours for affected small businesses.
  • →Lower occupancy rates for hotels → Decreased demand for housekeeping, maintenance, and food service staff → Potential wage stagnation or reduction in the hospitality sector.
  • →Increased marketing costs to attract alternative visitors → Higher operational expenses for tourism businesses → Pressure on profit margins or necessary price increases for other visitor segments.
  • →Potential shift of marketing focus to other international markets (e.g., Asia, Australia) → Increased competition for these markets and potential for higher promotional expenditures.
Stunning aerial shot of Waikiki Beach in Honolulu, showcasing clear blue waters and high-rise buildings.
Photo by Jess Loiterton

Title: 11.6% Drop in Canadian Visitors Threatens Hawaii Tourism Revenue

Summary (Executive Brief)

A significant decline in Canadian tourists, driven by a boycott movement, is directly impacting Hawaii's tourism sector, necessitating immediate adjustments to marketing and revenue strategies. Without quick action, businesses face sustained revenue loss throughout the peak booking season.

  • Tourism Operators: Expect booking declines and potential need for aggressive discounting or new market outreach.
  • Small Business Operators: Reduced visitor foot traffic could impact sales for retail, dining, and service providers.
  • Investors: Monitor portfolio performance in tourism-dependent sectors; consider shifting investment to more resilient segments.
  • Action: Tourism operators and adjacent small businesses must re-evaluate marketing spend and explore alternative visitor markets within the next 30 days.

The Change

Canadian visitor numbers to Hawaii have seen an alarming 11.6% decrease, according to recent reports. This downturn is attributed to the 'Elbows up' movement, a grassroots campaign in Canada encouraging boycotts of destinations perceived as not welcoming to Canadian travelers. While overall Canadian travel to non-U.S. destinations has increased by 8.9%, the specific decline in visits to Hawaii signals a targeted impact on the state's tourism economy. This trend began gaining traction in late 2025 and is projected to continue if not addressed proactively, directly affecting bookings and revenue projections for the upcoming peak seasons.

Who's Affected

Tourism Operators

Hotels, resorts, tour companies, and vacation rental managers reliant on the Canadian market are facing immediate revenue pressures. An 11.6% reduction in a key demographic can translate to significant booking gaps, particularly if this decline persists. Operators may need to adjust occupancy forecasts, consider aggressive discounting to fill rooms, or ramp up marketing efforts in other feeder markets. The timing is critical, as late winter and spring are typically strong booking periods for Canadian travelers planning summer and fall trips. This dip could jeopardize revenue targets for the entire year.

Small Business Operators

Businesses that cater directly to tourists, such as restaurants, retail shops, souvenir outlets, and activity providers, will feel the ripple effect. A noticeable decrease in Canadian visitor spending can lead to reduced sales, impacting cash flow and potentially leading to scaled-back operations or staffing adjustments. The knock-on effect for these smaller enterprises means they are directly vulnerable to fluctuations in visitor volume from key international markets.

Investors

Investors with exposure to Hawaii's tourism sector should reassess their holdings. Funds or portfolios heavily weighted towards hotels, airlines servicing Canada-Hawaii routes, or hospitality-related real estate may see underperformance. The 'Elbows up' movement introduces a new risk factor to the investment thesis for Hawaii, highlighting potential market vulnerabilities. This could prompt a re-evaluation of asset allocation and a search for more insulated investment opportunities within the Hawaiian economy or a diversification into less tourism-dependent sectors.

Second-Order Effects

The decline in Canadian tourism has several cascading effects within Hawaii's tightly integrated economy:

  • Reduced visitor spending → Lower demand for hospitality services and retail goods → Potential for reduced operating hours or staff hours for affected small businesses.
  • Lower occupancy rates for hotels → Decreased demand for housekeeping, maintenance, and food service staff → Potential wage stagnation or reduction in the hospitality sector.
  • Increased marketing costs to attract alternative visitors → Higher operational expenses for tourism businesses → Pressure on profit margins or necessary price increases for other visitor segments.
  • Potential shift of marketing focus to other international markets (e.g., Asia, Australia) → Increased competition for these markets and potential for higher promotional expenditures.

What to Do

Tourism Operators

Immediate Action Required:

  1. Quantify Exposure: Immediately assess the percentage of your bookings historically attributed to Canadian travelers. Identify rooms, tours, or services booked by this demographic.
  2. Re-allocate Marketing Spend: Shift a portion of your marketing budget from Canada to higher-performing or alternative international markets (e.g., Australia, Japan, South Korea) or focus on increasing domestic (US mainland) visitor numbers. Leverage digital marketing platforms with geo-targeting capabilities.
  3. Incentivize Neighboring Markets: Consider developing special packages or promotions specifically targeting visitors from Canada's Western provinces (which would typically be your closest markets) with revised messaging, or focus on attracting visitors from other North American regions if Canadian sentiment remains strongly negative.
  4. Review Pricing Strategy: Be prepared to offer competitive pricing or value-added incentives to fill occupancy gaps. Monitor competitor pricing closely.
  5. Engage Local Partners: Work with airlines and local tourism authorities to understand broader market trends and coordinate response efforts. Hawaii Tourism Authority

Small Business Operators

Immediate Action Required:

  1. Analyze Sales Data: Review recent sales data to identify any direct drop-off from Canadian tourist spending patterns.
  2. Boost Local & Domestic Appeal: Increase efforts to attract local residents and domestic visitors. Highlight patronizing local businesses in your marketing. Consider loyalty programs for residents.
  3. Collaborate on Packages: Team up with nearby businesses or hotels to create cross-promotional offers targeting non-Canadian visitors or residents.
  4. Optimize Inventory: Adjust inventory levels based on projected foot traffic. Consider diversifying product offerings to appeal to a broader range of customers.
  5. Maintain Communication: Stay in touch with your suppliers and employees. Proactive communication can help manage expectations and weather potential sales dips.

Investors

Watch and Assess:

  1. Monitor Fund Performance: Closely track the performance of tourism-dependent investments. Pay attention to revenue reports and occupancy rates from key Hawaiian properties and businesses.
  2. Analyze Management Strategies: Evaluate how tourism operators are adapting their marketing and pricing strategies in response to the Canadian visitor decline.
  3. Identify Resilient Sectors: Consider reallocating capital towards sectors less vulnerable to international tourism fluctuations within Hawaii, such as local services, technology, or diversified real estate.
  4. Review Earnings Calls: Pay close attention to commentary from publicly traded companies on earnings calls regarding international travel trends and their impact on Hawaiian operations.
  5. Scenario Planning: Develop contingency plans for further declines in international tourism, assessing potential impacts on asset values and identifying potential distressed asset opportunities.

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