Hawai'i's tourism industry started the new year by setting another monthly record in arrivals, despite a notable drop in Japanese tourists.

Visitor arrivals in January totaled 595,753, a 3.9 percent increase over the same month last year, according to state data released yesterday. Visitor expenditures grew by 9.8 percent to $1 billion.

A monthly record for Mainland visitors and growth in Canadian travelers helped offset a 7.3 percent decline in Japanese tourists.

For businesses that cater largely to Japanese visitors, the decrease is troubling.

"Terribly concerned, deeply concerned, fundamentally concerned, scared," said Sharon Weiner, DFS Hawaii group vice president. "Our business is completely dependent on that market, and without people, it's hard to have anyone to sell to. We understand that all the boutiques are suffering right now because of the lack of business from Japan."

DFS projects Japanese arrivals in February will be down 14 percent, Weiner said. The number of passengers on flights to Hawai'i from Japan (which includes some Hawai'i residents) in February fell 12.7 percent from the same time a year ago.

The only clear explanation for the decline in Japanese visitors seems to be the weakening of the yen. The yen hovered around 115 to the dollar in January, compared to under 105 last year. A weaker yen makes travel to the U.S. and goods priced in dollars more expensive for Japanese consumers.

At least for now, it doesn't appear that Hawai'i is losing out to other destinations, although competition from Asia and Europe are expected to be higher this year. Japanese international travel overall fell 7.6 percent in January, although it's unclear why, Weiner said.

The Japanese market to Hawai'i also has challenges carried over from last year: a tighter hotel room inventory, a cutback in scheduled flights from Japan, and more expensive Hawai'i vacations.

State economists have projected Japanese arrivals will grow 2.9 percent this year to about 1.56 million visitors.

"We're not sure what's going on in the marketplace," said state Tourism Liaison Marsha Wienert. "The decrease in the flights from Japan could be some kind of an indicator. But I think that when you see just nationwide in Japan outbound travel is down overall, I don't think it's anything alarming right now. But definitely we hope that the continued decrease doesn't happen.

"It's definitely a concern, and there's no question that we're going to be watching it as we move forward."

Not all Japanese-oriented businesses are hurting.

Kumiko Hasegawa, owner of Hawaii Nature Adventures on the Big Island, said business in January improved over last year. The 4-year-old business' customers are virtually all Japanese.

"It's a little slower in February," she said. "But March is very, very busy. ... But my business is new, and every year I'm getting more and more visitors."

The overall picture of Hawai'i's No. 1 industry in January reflects continued solid growth in visitor arrivals and expenditures, thanks largely to Mainland tourists, according the state Department of Business, Economic Development and Tourism.

The average length of stay among all visitors was relatively flat, but increased arrivals lifted visitor days by 4.5 percent. Spending per person daily grew 5.1 percent to $168.60. The average per-person spending on a trip also increased 5.7 percent to $1,729.

All islands saw more visitors except for O'ahu, which recorded a 2 percent decline. Visitors in the meetings, conventions and incentive market grew 12.6 percent, while the wedding market fell 10.5 percent.

Of the 595,753 visitors in January, 23,884 were here to board Hawai'i-based cruise ships, an increase of 59.4 percent. Another 13,907 visitors arrived on out-of-state cruise ships, up 83.7 percent.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.