Hawaii\u2019s visitor industry is absorbing a new round of fuel-driven shocks as oil prices climb following President Donald Trump\u2019s latest bombing campaign in Iran \u2014 a shift that is pushing airfares higher just as summer travel demand had begun to stabilize.<\/p>\n
The U.S. strikes, aimed at keeping the Strait of Hormuz open, rattled Iran\u2019s southern coast and sent oil prices more than $1 a barrel higher in post-settlement trading, adding fresh volatility to a market already strained by months of geopolitical tension.<\/p>\n
Rising fuel costs have become another stress point for Hawaii travel. The University of Hawai\u2018i Economic Research Organization warned in its May forecast that jet-fuel volatility would \u201ccontinue to pressure long haul travel\u201d through year\u2019s end.<\/p>\n
Fuel costs have roughly doubled since the Strait of Hormuz first closed, UHERO said, hitting about $4.90 a gallon in early April and driving fuel\u2019s share of airline operating expenses to nearly 45%, up from the typical 25% to 30%. UHERO estimates that spike adds $120\u2013$145 to a round-trip economy fare from the U.S. West Coast and $200 or more from the East Coast. Major carriers including United Airlines and Delta Air Lines already have announced schedule cuts, and UHERO warned that the combination of higher fares and reduced capacity poses a direct threat to Hawaii arrivals.<\/p>\n
Visitor arrivals remain up 2.9% year to date through May, but Hawai\u2018i Tourism Authority interim President and CEO Caroline Anderson said the agency is watching fuel prices closely to gauge the impact of airfare volatility across major markets. She said U.S. travelers \u2014 3.3 million through May \u2014 continue to anchor the state\u2019s tourism base. Still, average length of stay has fallen across all markets, a sign that inflation, higher fares and currency pressures are tightening visitor behavior.<\/p>\n
Japan exposed<\/p>\n
The Japan market remains the most exposed. Fuel surcharges first spiked in May, followed by another increase on July 1 that brought the charge to about $250 per round trip, landing just as the market was beginning to post modest year-over-year gains. The yen has weakened to around \u00a5162 \u2014 its lowest level in 40 years \u2014 amplifying the cost burden.<\/p>\n
Eric Takahata of Hawai\u2018i Tourism Japan, one of the Hawai\u2018i Tourism Authority\u2019s global marketing contractors, said summer travel should hold because tickets were purchased before the July 1 surcharge hike. But he warned that soaring prices could weaken fall and winter arrivals.<\/p>\n
\u201cWe were projecting single-\u00addigit growth for 2026 \u2026 Realistically, if we could be even with 2025, that would be fair,\u201d he said, noting that flat performance would leave the market only about 50% recovered to pre- COVID-19 levels. \u201cEvery time we try to turn the corner, we run into a buzz saw.\u201d<\/p>\n
JTB Hawaii President and CEO Ted Kubo said rising surcharges already have slowed future bookings, even as surveys show Hawaii remains Japan\u2019s top desired destination.<\/p>\n
Kubo said families and price-sensitive customers have been most affected by the rising oil prices. He said JTB is responding with marketing promotions \u201chighlighting the enjoyment and value of vacationing in the Hawaiian Islands.\u201d<\/p>\n
\u201cWe are hopeful these promotions will help counter the hesitancy of travelers from booking trips due to rising oil prices,\u201d Kubo said.<\/p>\n
Danny Ojiri, Outrigger Hospitality Group\u2019s vice president of market development, said the situation involving Iran has had an immediate impact because the Persian Gulf remains Japan\u2019s primary source of imported oil.<\/p>\n
Ojiri said that Japan Airlines (JAL) Vice President and Hawaii Regional Manager Yasuharu Omura told him that most summer bookings were made before the May surcharge increase, and current load factors are tracking near last year\u2019s levels. Ojiri added that Omura said that September bookings are running ahead of 2025, supported by Japan\u2019s five-day Silver Week holiday.<\/p>\n
Ojiri said that All Nippon Airways (ANA) America President and CEO Takashi Umetsu told him that the carrier\u2019s twice-daily Haneda and Narita flights are performing well, with July and August load factors around 85%, comparable to last summer.<\/p>\n
But Ojiri and other industry leaders said the real test will come in the fourth quarter and early 2027, when higher surcharges, a weaker yen and geopolitical instability could converge.<\/p>\n
Landscape
\nshifting<\/p>\n
Ojiri said the impact is even more pronounced across Outrigger\u2019s Asia Pacific portfolio, where many source markets also rely heavily on Gulf oil. Airfare increases have been widespread, and depending on origin, travelers heading to Maldives, Fiji, Mauritius or Phuket, Thailand, have postponed vacations, shortened stays, or booked further in advance. European travelers have been particularly affected, with limited access through Gulf hub airports prompting some to choose destinations closer to home.<\/p>\n
Takahata said Japanese travelers have a great deal of choice and the competitive landscape is shifting. He said that Hawaii is increasingly competing with California for Japan\u2019s outbound travel business. Travel agencies are running busloads of visitors to Los Angeles Dodgers games, driven by Shohei Ohtani\u2019s star power and other marquee Japanese players. JAL is adding flights to Los Angeles, and ANA\u2019s partnership with the Dodgers has boosted California\u2019s visibility.<\/p>\n
Kubo said JTB is seeing the same surge in demand for California, driven by the Dodgers\u2019 popularity in Japan. \u201cThe JTB Corporation signed strategic partnership agreements with Major League Baseball in January 2024 and with the Los Angeles Dodgers in March 2025,\u201d he said, adding that the team\u2019s success has put JTB \u201cin an advantageous position\u201d to build promotions and packages tied to game tickets. \u201cA lot of our customers want to see the Dodgers play in person.\u201d<\/p>\n
The naming of Dodger Stadium\u2019s playing surface as UNIQLO Field and ANA\u2019s partnership with the Dodgers are a clear sign of how strongly Japanese interest in California has surged.<\/p>\n
KV &Associates principal Keith Vieira said the yen\u2019s weakness \u2014 roughly 30% to 40% below pre-COVID levels \u2014 remains one of the biggest obstacles for Hawaii. \u201cWhen it works against you, it definitely makes you look at alternative destinations,\u201d he said.<\/p>\n
Cost constraints<\/p>\n
With mass market travel constrained by cost, Takahata said Hawai\u2018i Tourism Japan is pivoting toward affluent visitors who are less sensitive to surcharges and currency swings. Its new \u201cHawai\u2018i from Age 65\u201d campaign targets Japan\u2019s vast senior market, which holds more than $4 trillion in savings.<\/p>\n
The pressure to reach more affluent and more price-resistant travelers extends beyond Japan. UHERO said Canada\u2019s visitor market continues to slide, with arrivals down nearly 7% in the first quarter amid trade tensions and worsening sentiment toward U.S. travel. Combined weakness in Japan and Canada represents a structural vulnerability for Hawaii, especially as domestic travelers face softer spending power and higher airfares.<\/p>\n
Jerry Gibson, president of the Hawai\u2018i Hotel Alliance, said the industry is bracing for potential pullbacks if the conflict drags on or worsens, noting that jet\u2011fuel prices jumped sharply in April and May and \u201cpricing went up accordingly.\u201d<\/p>\n
He said the outlook hinges on \u201cwhat will happen over the next six months and where Iran goes,\u201d adding that oil coming out of the Gulf will affect \u201creally every single market that we have \u2014 including our domestic market.\u201d<\/p>\n
Anderson said HTA is also monitoring Oceania and Korea, where airfare volatility, airline shifts and geopolitical uncertainty could weaken demand. She said HTA is stretching limited resources through co-op campaigns and value-focused messaging, but the agency\u2019s current $63 million budget \u2014 split between marketing and destination management \u2014 limits its ability to respond quickly to shocks such as fuel spikes, storms or wildfires.<\/p>\n
Vieira said the HTA\u2019s budget is far too limited given the scale of Hawaii\u2019s visitor economy, noting that the state collects about $1.3 billion a year in transient accommodations (TAT) taxes. He said marketing\u2011driven visitor growth consistently delivers strong returns on investment, and that the agency\u2019s current budget leaves Hawaii hamstrung at a time when fuel volatility and global competition demand more aggressive promotion.<\/p>\n
Heading into the next legislative session, Anderson said HTA will seek dedicated TAT funding to restore a budget \u201ccloser to where we were pre-COVID,\u201d around $90 million, allowing more nimble crisis response and long-term planning.<\/p>\n
\u201cNot knowing where your funding is coming from \u2026 has made it so difficult for us,\u201d she said.<\/p>\n
\u2014\u2014\u2014<\/p>\n
Reuters contributed to this report.<\/p>\n","protected":false},"excerpt":{"rendered":"Hawaii\u2019s visitor industry is absorbing a new round of fuel-driven shocks as oil prices climb following President Donald…\n","protected":false},"author":2,"featured_media":201203,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[3],"tags":[34042,34],"class_list":["post-201202","post","type-post","status-publish","format-standard","has-post-thumbnail","category-iran","tag-editors-picks","tag-iran"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116900915197323924","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/201202","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=201202"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/201202\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/201203"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=201202"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=201202"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=201202"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}