Consumers Get Spoils of Hawaii Price Wars

Almost exactly a year ago, the largest travel company on Earth, mighty Airtours of Britain, placed a subsidiary called Sunquest Holidays (telephone [800] 357-2400) on the West Coast and proceeded to wreak havoc in the Hawaii travel market.

Round-trip air between Los Angeles and Honolulu for as little as $179!

Five nights in a Waikiki Beach hotel, as well as round-trip air to Honolulu, for as little as $299 from Los Angeles or San Francisco!

In the early months of the British invasion, those unprecedented bargain-basement offers swept like a tornado through the calm offices of travel agents and caused newspaper readers to look at advertisements and wonder if a typographical error had occurred. The news led to a price war.

Although rates have since bounced upward a bit, they remain at near-historic lows. Having already sent a quarter of a million Americans to Hawaii, surging Sunquest currently has eight departures a week from its Los Angeles gateway, all operating at capacity, at a round-trip air fare to Honolulu as low as $229 per person. Other flights leave from San Francisco and, starting in late June, San Diego.

Add five hotel nights in Waikiki or Maui and its total air-and-land package (with a $50 promotional discount) comes to as little as $379 to Waikiki and $504 to Maui (rising by another $80 to $85 to both destinations from mid-June to August).

Other West Coast players have fought back with their own ever-lower prices.

“The first thing a new company is going to do is buy as much business as it can. But we want them to understand that we’re not going to give up market share,” declares Ken Phillips of Pleasant Hawaiian Holidays (tel. [800] 242-9244), the largest American tour operator to the islands and Sunquest’s main competitor.

Pleasant’s five-night Waikiki packages from Los Angeles--$400 currently, $490 in summer--sell for $21 per person more than Sunquest’s, but include a hotel (the 18-story, 315-room Ambassador, a 15-minute walk from the sea) that it claims is higher in quality than Sunquest’s leadoff selection (the 44-story, 612-room Outrigger Hobron, same distance from the beach).

The strategy seems to be working, as Phillips claims business is up about 38% from this time last year, despite Sunquest.

Within the next year, Midwest and East Coast tour operators to Hawaii may be embroiled in even more bitter, California-style fare wars, as Sunquest is planning to move into those areas from its present Southern California base.

Although the rates I’ve cited are for modest hotels near Honolulu’s Waikiki Beach, the savings extend to upscale hotels and to other islands in the Hawaii chain.

Business from Japanese vacationers, who once accounted for a third of all visitors to Hawaii, has fallen drastically because the yen now buys 40% fewer dollars than it did three years ago. Business from South Korea, whose currency has plummeted even more, is virtually nil. As a result, occupancy rates at hotels throughout the islands are down considerably.

Even the first-class and deluxe hotels apparently are willing to deal. A five-night stay during the peak summer season, in a high-quality beachfront hotel on the Big Island of Hawaii, including round-trip air fare, is priced by Pleasant Hawaiian Holidays at only $753 from Los Angeles.

Because packages like these involve no regimentation, they are often the best (and certainly the easiest) way to travel to Hawaii. They’re a timesaving and cost-effective way of getting around a confusing profusion of deals from hotels, condos, airlines, bus companies and car-rental firms.

But whether you opt for a one-stop purchase or a mix-and-match approach, you currently can obtain bargains to Hawaii at the lowest rates in years. The Hawaiian War Chant has replaced the peaceful “Aloha Oe” in the U.S. travel industry.

This new column from Frommer, a longtime budget-travel expert, will appear weekly in the Travel section.