Hawai'i tourism felt the pain of another month of plunging visitor arrivals in September, with a 19.5 percent decline compared with the same month last year.

The drop in arrivals is one of the clearest indications that the worldwide economic crisis continues to rattle Hawai'i.

The state took in $141.2 million, or 15.5 percent, less last month from tourists than it did a year ago.

The September drop in arrivals follows a 17.3 percent decline in August.

"I am expecting pretty much more of the same for a while — current levels or lower through the first half of next year," said Bob Taylor, president and CEO of Maui Divers jewelry stores.

Three weeks ago, Maui Divers laid off 11 of its 600 employees. Hawai'i's unemployment rate reached a seven-year high of 4.5 percent in September.

State tourism liaison Marsha Wienert said she expects better results in the last three months of this year.

"Overall, we're anticipating that September will be the worst month we will see this year," Wienert said.

Wienert said the nearly completed October is better, boosted by good group business, especially on O'ahu and the Big Island.

However, Wienert said, the industry is concerned about the first quarter of next year. "It's really not materializing like it should," she said. "January, February, March are our bread and butter for a lot of people."

The state welcomed 461,051 visitors last month, according to preliminary statistics released yesterday by the Department of Business, Economic Development and Tourism.

In response to the decline, hotels have been discounting rooms, meals and other extras while the industry has pitched value vacations in Hawai'i.

Marriott has said it has laid off an unspecified number of people on each island.

RETAILER FIGHTS SLUMP

Maui Divers' Taylor said his company has been successful in boosting sales by adding new jewelry collections that have proven popular. "Our chocolate Tahitian pearls are doing very well," Taylor said.

And he said the company is pleased with jewelry inspired through artists who include Wyland, Maui artist Mikel and photographer Kim Taylor Reece.

Taylor said his stores have seen a single-digit upswing in sales to Japanese visitors, a market that had been in decline. He credits the yen's strength against the dollar.

And he's looking to a boost from the South Korean visa waiver program, which should increase the ease of travel for this group, which had dropped off after post-9/11 security tightened worldwide.

"They were a big market for us back in the '90s," Taylor said. "We will jump back in."

Among the top four visitor markets, air arrivals from Canada declined 6 percent compared with September 2007 after six consecutive months of growth. Visitors from the U.S. West fell 21.5 percent, the second-highest decline behind August 2008. Arrivals from the U.S. East were down 26.2 percent, the largest decrease since September 2001. Japanese arrivals fell 19.8 percent.

Wienert said many businesses are cutting staff and hours of operation to help cope.

"O'ahu is doing much better than the Neighbor Islands," she said.

"The decrease in cruise ships this month greatly impacted arrivals to the Neighbor Islands, in particular Kaua'i and Hawai'i Island," she said. "In total, there were 25,777 fewer visitors who either came by cruise ship or came by air to board cruise ships in Hawai'i compared to September 2007."

A HOLIDAY ANOMALY

An early Labor Day contributed to the weak month because it fell on Sept. 1 so visitors arriving for the holiday weekend were counted in August, Wienert said.

For the first three quarters of 2008, total arrivals by air and cruise declined 9.3 percent from the same periods last year to 5,234,685 visitors.

• Time-share properties continued to grow in popularity with U.S. visitors to the Islands. A higher percentage of U.S. West visitors in September stayed in time-share properties (17.5 percent) compared to those in the same month last year (15.5 percent). Nearly 13 percent of U.S. East visitors stayed in time-shares in September, up from 10.6 percent last September.

• There were more repeat visitors from the U.S. West in September (78.4 percent), compared with the same month last year (76.5 percent). The average length of stay by all U.S. West visitors increased slightly to 9.28 days from 9.09 days in September 2007.

• The percentage of repeat visitors from the U.S. East in September 2008 (50.5 percent), was also higher compared with last September (47.1 percent). U.S. East visitors this month stayed 10.13 days, up from 9.98 days in September 2007.

• The 6 percent decline in Canadian visitor arrivals in September was the first decrease since January 2008 (minus 2.6 percent). For the first three quarters of this year, Canadian arrivals rose 7.7 percent to 247,920 visitors. The Canadian market has been growing steadily since 2006, with only three months of decreased arrivals out of the past 33 months.

• Daily spending by Japanese visitors increased from $276 per person to $285 per person in September. However, lower visitor arrivals contributed to a 15.9 percent drop in total expenditures from this market to $152.2 million.

• There were also more repeat visitors from Japan in September compared with the same month last year (60.3 percent versus 56 percent). Japanese visitors stayed 5.74 days in September 2008 compared with 5.66 days in the same month last year.

• For the first three quarters of 2008, 133,636 Japanese visitors came to honeymoon in the Islands, up 3 percent from year-to-date 2007.