Hawaii tries to stop 'the skid' in sales with deals, packages

— -- As the economy has cooled, so has Americans' desire for Hawaii's warm beaches.

"These are very tough times for leisure tourism, particularly to resort destinations," says John Monahan, CEO of Hawaii Visitors and Convention Bureau. "We're going to be in for a rough ride."

To lure visitors in a scary economy, the bureau teamed with sellers such as Liberty Travel, Pleasant Holidays and Funjet Vacations to pitch packages to mainland residents, who represent eight out of every 10 Hawaiian tourists. Many hotels also are marketing their own deals.

Travelers may still have to navigate blackout and expiration dates or go at off times like early December. On the flip side, they can find perks such as free breakfasts, spa treatments or rental cars. Examples:

• Classic Vacations is selling a six-night stay at the Fairmont Orchid on the Big Island for $1,089 a person, 20% less than last year. The price includes a $500 airfare credit and a $200 resort credit.

• Hawaii Connections is selling a six-night, land-only package valid through Dec. 21 for $882 a person. It includes lodging at ResortQuest Kauai Beach at Makaiwa in an oceanview room, every third night free and a $50 food and beverage credit.

• With about 35 Hawaiian properties, Outrigger Hotels and Resorts has started offering free breakfasts, free third or fourth nights and some free activities to lure cautious consumers, says Outrigger CEO David Carey.

"When the stock market debacle began, we saw a significant drop in reservation activity," he says. "People were just plain nervous about what's going on in the world."

Chris Russo, owner of Travel Partners in Broomfield, Colo., says most of his clients are still going but have cut their budgets, spending $1,000 a person vs. $1,500 last winter.

Hawaii launched 2008 with strong numbers for arrivals and tourist spending. But "the skid" started in the spring when two large airlines — Aloha and ATA — folded within days of each other, causing fares to spike, says consultant Joseph Toy of Hospitality Advisors. Then came September.

Last month, arrivals fell 20% vs. a 9% year-over-year drop for the first nine months of 2008. Hawaii's hotels filled just 63% of rooms last month vs. 74% the year before, causing $58 million in lost hotel revenue on top of springtime losses, Toy says.

What makes this downturn more threatening for hoteliers than the last one, after 9/11, is that the economy isn't expected to rebound quickly, Toy says.

With the new efforts, Hawaii hopes to stem the already noticeable statewide economic fallout.

Last week, souvenir chain Hilo Hattie filed for bankruptcy protection. This week, Hawaii Superferry, which sails between the Big Island and Oahu, postponed the launch of its second ship because of the economy.

Surfing teacher Edison De Paula, owner of Surf Hawaii 4 U on Oahu's North Shore, says he's teaching about 30% fewer students — a steeper decline than after 9/11.

"(Business) went down then, too, but it's nothing compared to what it is right now," De Paula says. "It's really hurting."