In a post back in August, I commented on what appear to be two conflicting views of the state of the state’s visitor industry (“Tourism: Hitting record highs or steadily declining?“).
On the one side were the enthusiastic comments from the Hawaii Tourism Authority, on the other were far more sober comments from economist Paul Brewbaker.
While working on a story about a lawsuit over Haseko’s decision to drop plans for a marina in Ewa and replace them with a recreational lagoon, I found a report by Brewbaker assessing the economic impact of Haseko’s move.
The 2011 report spells out his assessment of 25-years of stagnation in tourism.
Hawaii may congratulate itself on the 7.6 percent annualized growth in total visitor days that it experienced from 1990-2010, but the entire increase was caused by displacement of international tourists by lower-spending, longer- staying domestic tourists. Visitor arrivals have not changed materially in the last twenty years, rising only slightly from just below to just above 7 million annually. Most importantly, adjusted for inflation total visitor expenditure-the only really important measure of export performance-declined from more than $15 billion (in 2010 dollars) during the late-1980s to barely $11 billion in 2008 and 2010, also in constant dollars, ignoring recession receipts from 2009.
Visitor numbers have jumped somewhat since 2011, when the report was written.
There’s obviously more digging to be done into this question.
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I’d like to know what the HTA’s end game is; and it would be nice to know what the candidates for governor thing too. Are we just going to play the if 7 million is good, 10 million will be great, and 15 million will really rock!?! b/c that seems about how we’ve been going about it for a long time without much discussion about what that really means for everyone else.
Interesting statistics.
Good Q’s, Groucho, and here are more…
Is it better for Hawaii’s economy to rely on tourism dollars from millions of temporary visitors or some other permanent industry?
If Hawaii doesn’t want tourism, what industry should replace it?
The manufacturing of widgets in large quantities for export requires permanent labor (as does tourism), and it tends to be low-wage. Tech manufacturing comes with some added environmental concerns plus Hawaii is not such a great location for those type of materials.
Farming as it is mostly done today still requires low-wage labor plus additional baggage from pesticide and GMO concerns.
So what are the better options that are out there?
What is so mysterious: More tourists spending less; more road congestion for less excise taxes to fix the roads and pay for rail; more jammed beaches for less maintenance dollars…
Groucho,
What difference do the thoughts of the candidates for governor make? They all have “plans” to make this the land of milk an honey by “growing the economy, reducing homelessness, increasing housing supply for residents, stop the brain drain and bring our keiki back home, take care of the kupuna” and all this with a real sense of aloha and ohana.
One of them proclaims he is the only one with executive experience, another claims he is the only one doing this already via his legislative savvy, the third explained that he was for 8 years a heart-beat away from becoming governor, and the fourth will look the other way and let local and overseas businesses deliver the goods overnight!
And as I posted back in August, unless one has a plan to to brainwash Asian tourists into spending their money on overpriced goods in Waikiki and Ala Moana like in the good old days, it’s going to be difficult to match those halcyon days of yore when the retail segment was propped up by naive consumerism. Alas, those days are gone.
In the future, it will take creativity in order to attract Asian tourists who will really open up their wallets. An example of this was the Arashi concerts held in Ko Olina this past summer. Virtually all of the fans of the group who came from Japan attended *both* shows, not just one. Had Arashi scheduled 5 shows, those Japanese fans would bought tickets to all 5 dates. The musical playlist could be kept the same, it wouldn’t matter. These diehard fans seemingly just want to share the same space with their objects of affection at every opportunity. There’s definitely room for growth as far as Hawaii being a venue for J-pop junkets. Johnny Kitagawa (the manager for Arashi) has a stable of other boy bands who could duplicate a similar success.
Interestingly, KITV did a story about one fly in the Arashi ointment: complaints about rehearsal/concert noise from non-Arashi fans. (i.e., what Brewbaker referred to as the “lower-spending, longer staying tourists.”)
http://m.kitv.com/news/koolina-guests-are-not-feeling-arashi-mania/28164938
Who cares about slight bumps or drops in the tourist numbers!!
The unanswered question is the impact of 7 million tourists a year on our water resources, electricity, roads, and trash.
Tourists are taxed for their impact. I believe Hawaii has been raising the TAT. The tourists still come here, so maybe we should just keep raising it.
BTW, I’m not an economist, but I do think the global recession and slow recovery had something to do with the lower spending numbers. It’ll be worthwhile to see what the outcome is when the world has had a couple years of improved economic growth.
Ian,
This is an interesting and important topic. I used to think that the China market could replace the Japan market with upscale visitors.
However, Xi Jinping seems committed to a much more nationalistic course than his immediate predecessors.
I am not only worried about Hawaii’s tourism industry but also about dangerous conflict in the Pacific.