How A Slower Holiday Season And Increased Lodging Discounts Reflect The Transition To High-Value Hawaii Tourism

Published on December 1, 2025

The economic landscape supporting Hawaii tourism has been undergoing a significant transformation, with pronounced signs of weakness having been observed as the 2025 holiday season approached. A concerning tourism downturn has been signalled by widespread lodging vacancies and an increased reliance on substantial holiday discounts being offered across the major islands. This developing situation in November 2025 has led to careful scrutiny by economists and industry stakeholders alike, as the health of the visitor industry is intrinsically linked to the fiscal stability of the state. It is understood that the decline in overall visitor volume, while partially offset by strong per-visitor spending, has necessitated aggressive measures to stimulate bookings during a period traditionally associated with robust demand.

Economic Indicators and the High-Value Shift

A complex narrative is being woven by recent visitor statistics, indicating that while the quantity of arrivals has slowed, the quality of spending remains high. The state’s long-term strategy, prioritizing a shift toward a high-value visitor model—one involving fewer tourists who are willing to spend more—is proving to be a dual-edged sword. It has been documented that the total revenue generated by tourism has seen stability, and in some areas, even a surge, despite the fewer arrivals. For instance, strong year-over-year growth in total spending was noted in late 2025, which provided a temporary cushioning effect against the slump in visitor arrivals. However, this increase in revenue has not translated into full occupancy across the islands, indicating that the higher costs associated with traveling to and staying in Hawaii have begun to deter the budget-conscious traveler.

The increase in expenses, including but not limited to the rising Transient Accommodation Tax and higher costs for air travel and local goods, has acted as a natural filter, effectively selecting for a wealthier cohort of travelers. This selectivity is reflected in the prevalence of vacancies in certain market segments, particularly those catering to mid-range and budget tourism. The availability of deep holiday discounts is therefore interpreted not as a sign of competitive pricing, but rather as an urgent reaction to fill rooms that might otherwise remain empty throughout the critical Thanksgiving and Christmas travel periods. The discounting strategy is being implemented aggressively by lodging operators who must meet operational costs despite lower-than-anticipated demand for the November 2025 and December calendar.

Island-Specific Impacts and Variances

The effects of this tourism downturn have not been experienced uniformly across the archipelago, with distinct patterns emerging among the major islands. Oahu, which traditionally handles the highest volume of tourist traffic, demonstrated a more resilient performance compared to other regions. Modest growth in arrivals was recorded, which was paired with a significant increase in visitor spending. This suggests that the urban appeal and extensive infrastructure of Oahu have maintained its status as a foundational destination for both volume and high-value visitors.

In contrast, Maui, an island still navigating the complexities of post-disaster recovery, was observed to have a slight decrease in overall visitor arrivals. However, a significant increase in visitor spending was simultaneously recorded on Maui. This data point is considered highly revealing, indicating that the visitors still choosing to travel to Maui are committing to substantial expenditures, often staying in premium accommodations or engaging in higher-cost activities. The continued uncertainty surrounding vacation rental policies, exemplified by measures such as the discussion surrounding Bill 9 regarding the phasing out of transient vacation rentals in apartment districts, has only compounded the challenges for the lodging sector on Maui, contributing to the noted drop in occupancy and increase in available discounts.

Hawaii Island and Kauai have also experienced fluctuations that align with the broader state trends. The shift towards higher costs has particularly impacted inter-island travel and the distribution of visitors across the state. Furthermore, a detailed analysis of flight availability in 2025 indicated a reduction in airlift to the islands compared to previous years, a factor which inherently contributes to the slowing of visitor numbers and increased travel costs, thereby exacerbating the tourism downturn.

Underlying Economic and Structural Pressures

The current vulnerability of the Hawaii tourism market is understood to be influenced by several persistent macroeconomic and local regulatory pressures. Reports from the University of Hawaiʻi Economic Research Organization (UHERO) have indicated an expectation of a mild state recession, with the tourism sector being a key area of contraction. The high cost of living in Hawaii, which translates into higher operational expenses for hotels and businesses, must ultimately be passed on to the visitor, leading to the high prices now deterring mid-market travel.

Furthermore, structural changes in the lodging sector, including the continuous debate over the regulation and availability of transient vacation rentals, have reduced the supply of budget-friendly accommodation options. When these factors are combined with increasing global competition for tourism dollars and reduced airlift capacity, the resulting economic climate favors the emergence of widespread vacancies. Therefore, the deep holiday discounts observed in November 2025 are necessitated by this confluence of forces, acting as a short-term intervention to manage inventory. The reliance on discounted packages is considered a clear signal that typical seasonal demand is insufficient to absorb the available supply of rooms.