Hawaii expecting a downturn of guests from Japan

[Donut23]

This is part of an article in USA Today about expectations of a downturn of tourists from Japan.

I wonder if it will also mean a downturn to DVC buyers. I know Disney was banking of the Japan market for sales.



But the state has already logged several thousand tour and hotel cancellations from the Japanese market. Despite a decline in recent years, the Japanese make up nearly 18% of Hawaii's 7.1 million annual tourists and represent the state's single largest source of visitors outside the USA.

Although the Japanese spend an average of just under six days per visit in Hawaii compared to 9.5 days for U.S. West Coast tourists and 10.5 days for East Coast visitors, their daily expenditures are much higher: an average of $274 per person, a day versus $146 for visitors from the West Coast and $177 a day from East Coast visitors, says David Uchiyama of the Hawaii Tourism Authority.

"This is just the first shock wave," says Uchiyama, who notes that a "cultural sense of obligation and responsibility" to fellow countrymen traditionally keeps Japanese from traveling during times of crisis.

Golden Week, a strong holiday time in Japan because it encompasses four national holidays during late April and early May, typically boosts Japanese arrivals in Hawaii by as much as 25%.

"The economic consequences will be severe for us," Abercrombie says. "It's going to be terrible. It's something we have to come to grips with."


Adding to the state's jitters: Fear of radioactive fallout from nuclear plant meltdowns in Japan. The Environmental Protection Agency is adding more radiation monitors in Hawaii, other Pacific islands and the Western U.S., but the U.S. Nuclear Regulatory Commission said this week that Hawaii is not expected to experience harmful levels of radioactivity



......and can I just say my heart goes out all the people of Japan right now. What heartbreaking news is coming from there. They are all in my daily prayers.

 

[Chuck S]

I think it will not only impact Aulani sales, but the future of DVC off-site expansion as a whole. If Aulani, which is a prime test for DVC offsite viability, fails to make reasonable sales goals, it is likely to set back all off site DVC expansion, just as Vero Beach seemed to put an almost permanent hold on offsite locations.

 

[DonDon]

This brings out more questions than answers. I'm new to DVC having just passed ROFR on a resale just days ago, so forgive me if some assumptions are not spot on.

-I believe Japan is one of the few countries that has a DVC sales office onsite that offers direct sales. Does anybody have actual numbers/percentages of Japanese owners in Aulani or other DVC resorts?

-How will this affect Aulani's opening, operation and future sales/resales?

-Looks like it will take Japan years, if not decades to rebuilt. I'm sure DVC doesn't mean much in the greater scheme of things right now. What's going to happen to those owners that can no longer make the next payment(if contract was financed), or come next year when MF are due?

-How will these events affect DVC beyond Aulani?

My thoughts and prayers are with all those affect by the tragedy

 

[mjc2003]

The affect on Hawaii tourism will be tremendous. My wife is sort of a tourism guru, as she works with many foreign governments on tourism campaigns for an international REIT. She digests these numbers on a near-daily basis.

She said that this will also have an affect on WDW. Japanese tourism to Orlando is up dramatically. The shopping centers they have in Orlando work directly with the Japanese gov't, and they have specific numbers that are quite staggering as far as the number of Japanese visitors, and the exponential growth in recent years.
Anybody who has been to WDW in recent years has surely noticed an increase in Japanese visitors.
Many Japanese are scrambling to "escape" to other Asian countries at the moment. Leisure travel is not going to be in the cards for a long time.

On a personal note, my nephew is currently stuck over in Japan, shut-in in a small one room apartment above the school where he teaches. He is north of Tokyo, too close (for our liking) to a nuclear facility, and doesn't have many options. Transportation is hard to come by. He recently graduated from U of MI and took a job teaching English in Japan b/c he has always loved the culture. He has been feeding us first hand accounts, and suffice to say, as we can see from the news reports, things over there will take decades to repair.

Let's keep our fingers crossed and prayers constant for these people.

 

[wdrl]

-How will this affect Aulani's opening, operation and future sales/resales?

Aulani is scheduled to be opened in three phases with Phase 1 opening on August 29, 2011. I suspect that date is firm and that DVD is committed to bringing Phase 1 online on that date. Phase 2 is tentatively scheduled to open in December 2011, and Phase 3 is scheduled to open in February 2013. If sales are slower than anticipated or adversely affected by the tragedy in Japan, I suspect DVD may delay at least part of the openings of Phases 2 and 3. Although construction on the villas making up Phases 2 and 3 is nearing completion, DVD can save operational costs by not using those villas.

It would not surprise me if DVD opens at least part of Phase 2 on or near its tentative opening date of late 2011. Based on information in Aulani's Master Declaration of Condominium, Phase 1 has 23 dedicated two-bedroom villas and 50 lock-off two bedroom villas, but it has no Grand Villas. It is not until Phase 2 comes online that Aulani will have 11 Grand Villas (one Standard View and 10 Ocean View GVs) available for the DVC membership. DVD may want to offer Grand Villas to the members, especially if it has sold any Guaranteed Week memberships for the Grand Villas.

 

[littlestar]

And add in Hawaii government taking aim at taxing timeshares more and more and higher airfares/oil prices, it looks a bit depressing for DVC in Hawaii.

 

[dbs1228]

MJC2003 I hope all goes well for your nephew and he comes home soon. My prayers are with all those effected. I am sure DL/California tourism will be heavily impacted as well. When we were at DL a few years ago I could not believe how many Japenese people were there, I almost felt like I was in Japan!

 

[ChiSoxKeith]

The results of this disaster will be felt for a very long time.

mjc2003 my thoughts and prayers are with you and your family. I hope that everything works out ok for your son.

 

[Donut23]

The affect on Hawaii tourism will be tremendous. My wife is sort of a tourism guru, as she works with many foreign governments on tourism campaigns for an international REIT. She digests these numbers on a near-daily basis.

She said that this will also have an affect on WDW. Japanese tourism to Orlando is up dramatically. The shopping centers they have in Orlando work directly with the Japanese gov't, and they have specific numbers that are quite staggering as far as the number of Japanese visitors, and the exponential growth in recent years.
Anybody who has been to WDW in recent years has surely noticed an increase in Japanese visitors.
Many Japanese are scrambling to "escape" to other Asian countries at the moment. Leisure travel is not going to be in the cards for a long time.

On a personal note, my nephew is currently stuck over in Japan, shut-in in a small one room apartment above the school where he teaches. He is north of Tokyo, too close (for our liking) to a nuclear facility, and doesn't have many options. Transportation is hard to come by. He recently graduated from U of MI and took a job teaching English in Japan b/c he has always loved the culture. He has been feeding us first hand accounts, and suffice to say, as we can see from the news reports, things over there will take decades to repair.

Let's keep our fingers crossed and prayers constant for these people.

Good point - didn't even think about that. DL will probably also see a reduction in guests from Japan....but their attendance recently has been VERY strong overall the last year or so.

I suspect those disney addicts in Japan (they have to have them too!) may just travel to Toyko Japan when they must feed their fix....at least for a while. It would save $$$ and support their own economy.

 

[LouisianaDisneyFan]

First and foremost, prayers go out to the Japanese people.

From a business standpoint, however, the tragedy in Japan will have significant repercussions for Disney, above and beyond Aulani sales. Disney will also be taking a hit due to reduced visitors to Disney Tokyo. Tourism is at an understandable standstill and probably will remain so for a very long time... similar to the situation in New Orleans after Katrina. Recovery efforts will make travel to Disney Tokyo difficult (relief planes in and out tie up runways and create security challenges at the airports) and tourists may have fears about the safety of the environment. As Disney profits are affected, it affects all of us in many ways... from park upkeep to ticket prices and beyond... across all of the Disney properties.

 

[Donut23]

First and foremost, prayers go out to the Japanese people.

From a business standpoint, however, the tragedy in Japan will have significant repercussions for Disney, above and beyond Aulani sales. Disney will also be taking a hit due to reduced visitors to Disney Tokyo. Tourism is at an understandable standstill and probably will remain so for a very long time... similar to the situation in New Orleans after Katrina. Recovery efforts will make travel to Disney Tokyo difficult (relief planes in and out tie up runways and create security challenges at the airports) and tourists may have fears about the safety of the environment. As Disney profits are affected, it affects all of us in many ways... from park upkeep to ticket prices and beyond... across all of the Disney properties.

You are spot on about Toyko Disneyland. DH is a 33 year castmember and today at work that was all they talked about. When it was going to reopen and who the heck would come since all the talk is about getting OUT of Japan.

If DVC sales in Hawaii crash, will that affect other, yet to be announced, DVC projects. .....like Washington, DC or new construction at WDW?

 

[dis-happy]

First and foremost, prayers go out to the Japanese people.

From a business standpoint, however, the tragedy in Japan will have significant repercussions for Disney, above and beyond Aulani sales. Disney will also be taking a hit due to reduced visitors to Disney Tokyo. Tourism is at an understandable standstill and probably will remain so for a very long time... similar to the situation in New Orleans after Katrina. Recovery efforts will make travel to Disney Tokyo difficult (relief planes in and out tie up runways and create security challenges at the airports) and tourists may have fears about the safety of the environment. As Disney profits are affected, it affects all of us in many ways... from park upkeep to ticket prices and beyond... across all of the Disney properties.

Just thinking out loud here, but this post made me wonder if Disney doesn't carry some sort of insurance to cover losses after a catastophic event like the one seen in Japan. While it wouldn't help with HI (and loss of sales there) a policy like that would cover losses at Tokyo Disney. Anyone in the re-insurance business who would know??? I assume something similar would exist for all the parks.

 

[Chuck S]

yI thought Tokyo Disney/Disney Seas was not owned by Disney, but is a licensed park. Of course, there will be some financial impact to Disney, but not nearly as catastrophic as it will be to the actual owners/operators.

As others have said, though, Disney will feel the affects on US tourism and in Aulani sales.

Many other US industries will also be hurt, including US based foreign assembly plants, like Toyota and Honda. And if radiation levels spin out of control, expect all seafood prices to rise, and be somewhat scarce, like after Chernobyl

 

[Donut23]

I thought Tokyo Disney/Disney Seas was not owned by Disney, but is a licensed park. Of course, there will be some financial impact to Disney, but not nearly as catastrophic as it will be to the actual owners/operators.

As others have said, though, Disney will feel the affects on US tourism and in Aulani sales.

Many other US industries will also be hurt, including US based foreign assembly plants, like Toyota and Honda. And if radiation levels spin out of control, expect all seafood prices to rise, and be somewhat scare, like after Chernobyl

Right again. As I was reading your note, CNN announced a GM plant will close because they cannot get the components they use from Japan to build their cars.

The new Ipad will be delayed. It's assembled in China but again, components from Japan.

What else?

We will begin to see all the "nooks and crannies" where Japanese products are used.

My DH often surprises me with his sharp insight. As they were waiting for the tsunami - he was at work at ABC - (I was in tears for all the people who were terrified - running for their lives.....God's little creatures who didn't stand a chance....you know....the emotional stuff)......one of DH's first comments was the impact this would have on US unemployment. I think I said something like.....WHAT? What about all the elderly, the children....their pets, THE BUNNIES!!!!

He hit the nail on the head with the shutdown of Japanese industry and products imported to the US for our industry here. I suspect Toyata plants here in the US will shut down......Honda.......what else?

He was right - uptick in unemployment from tragedy half a world away.