The Change
Hawaii experienced a marginal decrease in total visitor arrivals in 2025, with approximately 9,642,991 visitors arriving compared to 9,701,499 in 2024, a decline of 0.6%. However, this slight reduction in volume was juxtaposed with a significant increase in per-visitor spending, which rose by 5.7% when adjusted for inflation. This indicates a potential shift in the tourism market towards attracting and serving visitors who spend more per day, even if the overall number of visitors is slightly lower.
This trend, observed in data released by Hawaii Department of Business, Economic Development & Tourism for calendar year 2025, suggests that while the total volume of inbound tourism might be stabilizing or slightly contracting, the economic contribution per traveler is growing. This presents both an opportunity and a challenge for Hawaii's tourism-dependent economy.
Who's Affected
Tourism Operators (Hotels, Tour Companies, Vacation Rentals, Hospitality Businesses):
- Opportunity for Higher Yields: Businesses that cater to higher-spending demographics stand to benefit significantly. This includes luxury accommodations, fine dining establishments, premium tour operators (e.g., private excursions, bespoke experiences), and high-end retail.
- Marketing Shift Required: Current marketing efforts may need to be recalibrated. Instead of focusing solely on mass-market appeal, operators should consider targeting segments known for higher discretionary spending. This might involve leveraging digital channels to reach affluent travelers and emphasizing exclusive or unique experiences.
- Service Enhancement: To justify higher price points and meet the expectations of discerning travelers, there will be increased pressure to elevate service quality, personalize guest experiences, and maintain impeccable standards across all touchpoints.
- Capacity Management: While overall numbers are down slightly, concentrating on higher-spending visitors could strain resources for premium services. Careful capacity planning will be crucial to avoid diluting the high-value experience.
Investors (VCs, Angel Investors, Portfolio Managers, Real Estate Investors):
- Portfolio Reassessment: Investors should evaluate their exposure to tourism-related assets and businesses. Those with investments in businesses directly serving the high-value segment may see improved returns. Conversely, businesses reliant on volume and lower-spending segments might face margin compression or require strategic pivots.
- Emerging Opportunities: The shift could signal opportunities in niche markets such as luxury eco-tourism, wellness retreats, high-end cultural experiences, and exclusive adventure travel. Real estate investors might look at opportunities in prime locations that can support luxury offerings.
- Risk Factors: Businesses failing to adapt to this trend could experience declining revenue per available room (RevPAR) or lower per-customer revenue, impacting profitability and potentially leading to divestment opportunities for those seeking to exit underperforming assets.
Small Business Operators (Restaurants, Retail Shops, Service Businesses):
- Increased Consumer Spending: Restaurants and retail shops in tourist-heavy areas may see an increase in average transaction value. This presents an opportunity to boost revenue without necessarily needing a higher volume of customers.
- Potential for Upskilling/Premium Offerings: Service businesses might consider introducing premium service tiers or higher-value products. For example, specialty cocktails or tasting menus in restaurants, or curated retail experiences.
- Staffing Implications: While overall visitor numbers are slightly down, catering to higher-spending tourists might require more skilled or specialized staff. This could lead to increased wage pressures in specific roles within the hospitality and service sectors.
Second-Order Effects
This trend of higher per-visitor spending, even with slightly lower visitor numbers, can create a ripple effect throughout Hawaii's island economy. A concentrated focus on high-value tourism, for instance, could lead to increased demand for upscale goods and services. This, in turn, might strain local supply chains that are not equipped for premium products, potentially driving up local prices for these items. Furthermore, if premium services require more specialized labor, it could exacerbate existing labor shortages in certain skilled positions within the tourism and hospitality sector, putting upward pressure on wages for those specific roles, while potentially leaving lower-skilled positions with less demand.
A shift towards higher-spending visitors could also influence urban and regional planning decisions. Local governments might see opportunities to develop and promote luxury tourism infrastructure, potentially prioritizing projects that cater to this demographic, which could indirectly affect land use and development patterns across the islands.
What to Do
Tourism Operators:
- Action: Begin analyzing your current customer base demographics and spending patterns. If your business primarily serves the mass market, explore introducing premium packages or services. Consider revising marketing collateral to highlight luxury aspects and target affluent traveler segments through specialized travel agencies and digital platforms. Review pricing structures to ensure they reflect the value proposition for higher-spending visitors.
Investors:
- Action: Conduct due diligence on your existing tourism-related investments. Identify companies with strong potential to capture the high-value tourist market. Monitor industry reports and earnings calls for indicators of shifts in luxury travel demand and operational capacity within premium segments. Consider reallocating capital towards businesses with a proven ability to attract and serve affluent clientele.
Small Business Operators:
- Action: Assess your product and service offerings for potential upgrades or premium versions that could appeal to higher-spending visitors. Engage with your staff to identify opportunities for service enhancement and consider targeted training. Review your pricing strategy to ensure it aligns with increased guest spending potential, but avoid alienating your existing customer base if you serve multiple segments.
Action Details
Monitor visitor spending data and demographic profiles released by the Hawaii Tourism Authority and the DBEDT on a quarterly basis. If spending per visitor continues to rise at a rate exceeding inflation and visitor demographics shift towards higher income brackets, consider implementing one or more of the following actions within the next 6-12 months:
- Tourism Operators: Pilot a new premium package or service offering.
- Investors: Initiate conversations with portfolio companies about their strategies for capturing high-value tourists.
- Small Business Operators: Introduce an enhanced product or service tier, or undertake staff training focused on premium customer service.
