Visitation to Hawaii took a steep dive in August - down 17.3% from the same period last year. We suspected that the Hawaiian tourism industry had tough times ahead (see “IN TIMES LIKE THESE ALOHA MEANS GOODBYE , 9/20), and the August figures, while ugly, are no surprise to us. The factors we outlined in our 9/20 post continue to hold. The weakening global economy, stronger dollar, and less airline capacity have outweighed the significant discounting. The deals are not attracting more visitors. Furthermore, the visitors that are going to Hawaii are spending less – 18% less in August – than in previous years. This clearly indicates that we are seeing a genuine downturn in the tourism industry rather than any sort of transient blip. Hawaii has been among the most robust markets but is now in serious difficulty. This is yet another glaring signal that HOT and other lodging companies must heed when outlining their guidance. In order to be credible, EBITDA and EPS estimates need to be reduced by 10-15% and 20-25%, respectively, partly due to Hawaii.