As a major tourist destination for Japanese travelers, Hawaii will likely see a notable drop-off in visitation this summer following last month’s earthquake and tsunami in Japan, according to Standard & Poor’s Ratings Services.

While it’s too early to gauge the full impact of the earthquake on Japanese travel to Hawaii, S&P believes the lodging industry will begin to feel the effect relatively soon, concludes a new report.

Because Hawaii attracts more than 1.2 million visitors from Japan each year, S&P is monitoring the operating performance of the Hawaiian lodging properties securing the mortgage loans that serve as collateral in commercial mortgage-backed securities (CMBS) transactions it rates. These properties represent more than $2.4 billion in rated issuance.

“We identified 12 loans in 13 CMBS transactions that are secured by 18 lodging properties in Hawaii,” explains S&P credit analyst Della Cheung. “More than one-third of the Hawaiian hotel collateral in CMBS transactions we rate is in Oahu, the most frequented island by Japanese tourists, so we believe lodging collateral in Oahu will be the most at risk as Japanese tourism drops.”

Hawaiian tourism typically peaks during July and August, so declines in the region’s overall operating performance may soon start to appear, says S&P. Declining Japanese tourism may also affect other primary markets in Hawaii, such as destination-oriented retail properties.

“These types of retail space attract visitors and locals, so a drop in tourism from Japan could affect their operating performance as well as lodging,” says Cheung.

“This could affect the performance of CMBS deals that include this type of collateral, such as the $1.3 billion Ala Moana Portfolio loan, which is secured predominantly by 1.6 million sq. ft. of retail space in Oahu and collateralizes four CMBS transactions we rate.”