Hawaiian Clothes

Honolulu Star-Bulletin Business — ADVERTISEMENT — Sunday, October 17, 2004 DENNIS ODA / DODA@STARBULLETIN.COM Yoshi Takahashi amuses his friends Kimi Toi and Michi Ogino with a wetsuit that's a little too small at the Xcel store in the Ward Village Shops. Hey! Big spenders New research shows just where tourists drop their money during stays in Hawaii By Allison Schaefers aschaefers@starbulletin.com ILLUSTRATIONS BY BRYANT FUKUTOMI / BFUKUTOMI@STARBULLETIN.COM China / South Korea travelers » More than 50 percent of these Asian visitors are first-timers and about a quarter of them come as part of a package tour. » Most come to visit friends or family (more than 28 percent), on business, or as part of a stopover, as stringent Visa requirements and a lack of flights has made Hawaii a difficult vacation destination. » In terms of activities, they are statistically similar to Americans, but plan to spend more money. » Most plan to attend a luau and 30 percent intend to play golf, the most of any other group surveyed. United States travelers » American travelers plan to stay longer and spend the least amount of money on retail and souvenirs. » They are most likely to engage in sports like running, scuba or going to the gym, but have the smallest percentage of people who planned to swim or sunbathe. » Americans are more likely to attend a luau, go to a Hawaiian history or cultural event and buy Hawaiian clothing and souvenirs than Japan or other Asian travelers. » They enjoy shopping at convenience stores, malls or hotel stores. They are also the most likely to go to a museum or art gallery or eat in high-end restaurants. Japan travelers » More than 60 percent of Japan travelers come to Hawaii as part of a package group. » These visitors plan to stay the least amount of time and spend the most money. » They are most likely to come to Hawaii to celebrate a wedding or honeymoon than any other group. » They are most interested in going to the beach and shopping while in Hawaii, but few plan to do any activities or eat in high-end restaurants. » They enjoy shopping across the board from outlet and discount stores to designer boutiques. While tourists from Japan and the mainland still pump plenty of money into Hawaii's retail stores, a more global mix of visitors is at the heart of Hawaii's improved tourism outlook, and their preferences are worlds apart. A new cross-cultural study from the University of Hawaii is available to help retailers take stock of what tourists buy, so local stores can match merchandise with spending habits. University of Hawaii marketing professor Mark Rosenbaum and travel industry management professor Dan Spears randomly surveyed more than 1,000 Waikiki tourists to determine cultural differences regarding their reasons for coming to Hawaii, their desire to shop and what purchases they planned to make during their stay. "Not all tourists are alike," Rosenbaum said. "Your target market should greatly impact how you merchandise and what products you stock." Hawaii's retail history gives businesses strong reasons to diversify their customer base, said retail analyst Stephany Sofos. "In the 1980s, the Japanese people came fast and furious and those who didn't cater to them were left out. Now it's changing, and as visitor groups change, retailers are having to figure out what their market is from one day to the next," Sofos said. The University of Hawaii study can help tourist-dependent businesses identify how to best keep their customers happy and how to increase spending from other visitor groups, Spears said. Their research showed that Japanese tourists plan to spend $1,400 on gifts and souvenirs during their stay in Hawaii, which is substantially more than all other visitor groups. According to the study, Chinese and Koreans spend about $750 on retail items and Americans spend around $600. They also found differences when it came to purchasing local foods, clothing and engaging in outdoor activities as well as differences in why these tourists groups were coming to Hawaii. For example, Americans and Japanese came to Hawaii primarily to vacation, while the Chinese and South Korean visitors were in Hawaii primarily to visit family members. Chinese visitors can only travel for leisure to a few designations, which does not include Hawaii. "Most Japanese will spend their vacation shopping at both high-end and discount retailers," Rosenbaum said, adding that data also confirmed the love-affair Japanese have with designer items. Nearly 60 percent of the Japanese visitors surveyed planned to visit Hawaii's designer boutiques; in contrast, only 35 percent of Americans planned to do so. However, the number of Japan travelers who plan to purchase products made in Hawaii, such as coffee, food and clothing, is lower than other groups. "The Japanese are the answer to our luxury business - not our economy," Rosenbaum said, adding that purchases of locally made products create more jobs and ultimately bring more benefit to the state. Visitors, who spend about $3 billion annually on retail goods in Hawaii, make up about 15 percent of the state's $19 billion retail market, said Carol Pregill, president of the Retail Merchants of Hawaii. The islands drew 6.4 million visitors last year, about two-thirds of them from the mainland. "Shopping is the third largest expenditure, next to food and lodging, for visitors," Pregill said, adding that about 20 percent of visitor expenditures can be attributed to shopping. "That's huge when you consider that shopping is a discretionary expense," Pregill said, and is an important part of a visitor's experience. But to make Hawaii shopping attractive to visitors it has to be distinctive, said Frank Haas, marketing director for the Hawaii Tourism Authority. "You can shop in Hong Kong and Las Vegas; what we need to know is what's distinctive about shopping in Hawaii," Haas said. As Oahu's visitor market stays strong, many retailers are going to take advantage of more visitor-based opportunities, said Jeffrey Hall, senior director of research at CB Richard Ellis. "There's huge amount of interest in redoing resort retail, especially in Waikiki," Hall said. According to market reports, Waikiki has a high number of retail vacancies, but in three to four years the sector will be more bullish as Waikiki renovation projects come to fruition, Hall forecasts. "The Royal Hawaiian Shopping Center is rapidly changing. The Beach Walk and the International Market Place projects are just getting under way," Hall said. "Expect that in a few years Waikiki will be an entirely different place." Any shift in visitor demographics changes the way businesses advertise their products. "It's important to know who is coming and what you need for inventory," Pregill said. "Inventory is a huge expense and no one wants to be stuck with goods that no one want to buy." That's where the Rosenbaum and Spears study comes in, said Anne Murata, marketing director of the Festival Cos., which manages the Royal Hawaiian Shopping Center. Murata said she purchased the study because it's the first retail survey in Hawaii that breaks data into small categories such as visitors' reasons for traveling to Hawaii, ability to spend and where they spend their money. Retailers are especially interested on the data about Chinese and South Korean visitors, she said. While Chinese and Korean visitors have more in common with Americans in terms of overall spending, their spending habits are very similar to the Japanese visitor market when it was new, Murata said. In the 1990s, when the Japanese tourism boom to Hawaii was growing, the state's largest industry went to great lengths to cater to their needs. Japanese signs ruled Waikiki marketing; but then the bubble burst and retailers had to regroup to stay in business. "We've been trained to think only in terms of U.S. westbound and Japan travelers," she said. "But our retail market is becoming increasingly global and we're starting to see more travelers from China, Korea, Australia, New Zealand, Europe and the U.S. East." Japanese visitor arrivals to Hawaii, which peaked at 2.2 million in 1997, fell to 1.3 million last year in response to a weakened Japanese economy and geopolitical troubles. Retailers say the market has rebounded, but it's time for those eyeing Hawaii's improved market to use the isles' changing tourist patterns to help determine what's in store. Although the China travel market to Hawaii is small, representing less than 1 percent of Hawaii's total visitors in 2002, state officials have identified it as a market with enormous potential. New research shows that Chinese tourists are now the biggest spenders in the Asia-Pacific region by average credit card transaction size, according to a study released by Visa. The report, published last week in the Financial Times, said Chinese cardholders on average spent $253 per transaction while traveling. The World Tourism Organization has also estimated that China will produce 100 million outbound tourists by 2020 and members of Hawaii's public and private sector want their share. "Just like we geared retail to the Japan market in its heyday, someday I expect we'll see retail signs in Chinese and Korean, too," Murata said. According to the Rosenbaum and Spears survey, the Chinese, enjoy participating in new activities, but look for familiarity in restaurants - characteristics similar to Japanese visitors before Hawaii became a common destination, "They only want to eat in Chinese restaurants," Rosenbaum said. But, more important for retailers is that the Chinese also appear to have a taste for luxury goods. "The Chinese, like the Japanese, also want to purchase luxury goods as gifts to take home," Spears said. While retailers need accurate data to capture their audience, there is one sure plan that works across cultures, Murata said. "One thing you can always sell them is the aloha spirit - that's an approach that works with visitors from China to Lithuania," Murata said. BACK TO TOP | The Hawaii experience A new University of Hawaii study of tourist spending habits raised some interesting questions. For instance, do Japan travelers, who planned to spend $1,400 on gifts and souvenirs during their stay in Hawaii, really contribute the most money to Hawaii's economy? While Americans, who planned to spend about $600 on retail, and Chinese/ Koreans, who planned to spend about $750, lagged behind in overall spending, the data showed that these groups spent significantly more on made-in-Hawaii products. The percentage of visitors planning to buy each product: Items USA / Canada Japan China / South Korea Hawaiian coffee 53.1 38.4 70.8 Macadamia nuts 66.8 52.2 75.5 Pineapples 37.4 7.3 30.2 Hawaiian candies 35.7 12.3 35.8 Hawaiian clothing 47.3 21.7 43.4 Hawaiian souvenirs 60.9 41.1 58.5 Source: University of Hawaii marketing professor Mark Rosenbaum and travel industry management professor Dan Spears Where it all goes Percentage of visitors doing the following activities: Activities U.S. Japan China/Korea Honeymoon/wedding 6.8 18.2 4.7 Visit family/friends 13.4 3.8 28.3 Part of Packaged tour 15.8 61.3 25.5 Buying designer clothes 29.2 34.9 37.7 Golf 16.0 5.6 30.2 Tour bus 30.9 25.2 37.7 Beach 77.4 78.3 84.0 Fine dining 58.2 8.5 49.1 Culture/History 64.2 27.3 43.4 Luau 59.7 16.1 62.3 Designer boutiques 35.1 59.2 41.5 Mall 65.4 74.5 75.5 Characteristics of visitors' stays: Visit U.S. Japan China/Korea Planned Expenditures $644 $1,416 $745 Length of Stay in Hawaii 12 days 7 days 11 days Source: University of Hawaii marketing professor Mark Rosenbaum and travel industry management professor Dan Spears — ADVERTISEMENTS — — ADVERTISEMENTS — | | | PRINTER-FRIENDLY VERSION E-mail to Business Editor BACK TO TOP Text Site Directory: [News] [Business] [Features] [Sports] [Editorial] [Do It Electric!] [Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor] [Feedback] © 2004 Honolulu Star-Bulletin -- http://starbulletin.com -Advertisement-

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Hawaiian Bed Spread

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