After two years of record-setting growth, Hawai'i's tourist arrivals are showing signs of fatigue.

July failed to match last year's count, and executives say fall bookings are coming in shy of 2005's record pace.

Still, hotels are near capacity, and businesses continue to expand. The mantra among tourism officials: "Anything close to 2005 is still great."

"Spending is strong, and we're doing very, very well," said Bob Taylor, president and CEO of Maui Divers. July was a record month for sales at his chain of jewelry stores, and Taylor said he will be adding two stores next year in Hawai'i.

But the latest arrival numbers are not what the tourism industry would have wished for. July visitor arrivals fell 1.9 percent from a year ago. Japanese arrivals were down 9.1 percent, and East Coast arrivals were off 2.9 percent. Visitor spending in July was relatively flat, growing just 0.3 percent to $1.2 billion.

Japanese arrivals have fallen every month this year, in part because of higher costs to fly here, fewer available hotel rooms and more interest in travel to other Asian destinations.

Total arrivals to Hawai'i this year are up 0.3 percent, but it's looking less likely that the state will top the 7.46 million record set last year.

"We have to remember we're coming off just an extraordinary year last year," said David Carey, CEO of Outrigger Enterprises Group, which operates more than 25 hotels or condominiums in Hawai'i. "So to be looking for that kind of growth year over year is just unreasonable because the inventory is running pretty close to effective capacity."

The industry also appears to be facing slightly lower numbers in the fall compared with the same time last year, in part because of relatively light convention bookings and slower growth in the economy, Carey said.

BIGGER SPENDERS

This year may end up being the "second-best year we have in history," Carey said, adding that visitor spending may exceed last year.

"Better-spending customers at the same number of arrivals means more dollars into the economy, and that's OK," he said. "That means we're actually succeeding in our strategy."

The state Department of Business, Economic Development and Tourism still projects growth in visitor arrivals, but last week revised its forecast down from from 2.8 percent to 2 percent.

Duke Ah Moo, Pleasant Holidays staff vice president of Hawai'i operations, also wasn't worried.

"Last year was such a banner year for tourism," he said. "For us to say we're flat or down is not necessarily a bad thing. ... The numbers are very good. The percentage may not be all that great, but the numbers themselves are pretty good."

Ah Moo said he expects fall business to be about the same as last year. He said the airlines have put out lower fares to stimulate more travel here, and Pleasant Holidays also has stepped up marketing efforts for the fall.

Ah Moo noted that the year-round school schedule might affect travel here.

Maui Sunriders Bike Co. also was busy last month and added a new position in the summer, bringing its staff to five people, said owner Paolo Barichi.

CRUISE LINE HELP

Slower growth in visitor arrivals doesn't seem to have much of an impact on the company, Barichi said.

"We are a very small company," he said. "We don't need a huge amount of clients. ... For us it's easy to stay constant."

State tourism liaison Marsha Wienert said NCL America's third cruise ship, the Pride of Hawaii, contributed to the visitor arrivals. The ship began sailing the Islands this summer.

Of the total number of visitors last month, 36,085 either flew here to board Hawai'i-based cruise ships or arrived on foreign ships, up 58.8 percent from July last year.

The slower growth in the industry comes amid negotiations between UNITE HERE Local 5 and seven Waikiki hotels. The union and the Hilton Hawaiian Village Beach Resort & Spa met last week and reported they were far apart on economic issues, but will meet again in early September.

UNITE HERE was created by the merger of two unions, the Union of Needletrades, Industrial and Textile Employees, and the Hotel Employees and Restaurant Employees.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.