Category Archives: Economics

What’s the real trend in Hawaii tourism?

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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.

Djou appears to trip on minimum wage numbers

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Hawaii Public Radio’s “Town Square” yesterday featured an hour-long live interview with GOP congressional candidate, Charles Djou.

In the course of the interview, Djou estimated that all but 10-15% of minimum wage workers are teenagers, program host Beth-Ann Kozlovich commented later in a Facebook post.

But she referred to a March 2014 report by the U.S. Bureau of Labor Statistics that “tells a different story.”

The report, “Characteristics of Minimum Wage Workers, 2013,” estimates there are now 10,000 workers in Hawaii earning the minimum wage, and another 5,000 earning below the minimum wage.

The 15,000 workers at or below the minimum wage represented 4.6% of all workers in the islands paid hourly rates. Those at minimum wage made up 3.1% of the total, while 1.5% were paid less than the minimum wage, according to the report.

And the number of workers paid at or below the minimum wage has increased almost four-fold during the Great Recession, rising from 4,000 to 15,000 since 2007, according to a separate BLS report on minimum wage workers in Hawaii (“Minimum wage workers in Hawaii – 2013“).

These reports don’t appear to include data on the number of teens among Hawaii’s minimum wage workers. However, nationally, just 24% of those earning the minimum wage or less were teenagers. Young people age 20-24 made up another 26%, and those 25 and older were 50% of the total.

Nationally, women were 62% of all workers paid the minimum wage or less. In Hawaii, women were about 50% of the total minimum wage workers.

The impact of ultra-luxury but empty condominiums

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A comment left on a recent post about housing made an interesting point that I think is worth sharing more broadly (here’s the original post, “Looking back: The housing crisis in 1991“).

Here’s an excerpt from the long comment by the reader who uses the name, “compare and decide.”

One aspect of luxury condominiums that has not been mentioned is that most of the year, those apartments are empty. If you drive down the H-1 in the evening and look at small apartments for middle-class people, they are 90% occupied. The lights are on and people are eating dinner or watching TV. Once you get into town and look at luxury condos, often 90% of the lights are off in the evening. (Anecdotally, I once pointed to a luxury apartment building from the parking lot of Ala Moana Center; only a few lights were on in the building. One person I was with said, “I have a friend who owns a condo there. He lives in Nashville.” Also, I once visited Imperial Plaza on the corner of Cooke and Kapiolani one evening. The building was virtually empty. The people I met there had lived there for a year and said they never saw anyone in the hallways, elevator or lobby when they went to work in the morning and came home in the evening.)

So we can talk about green spaces and bike lanes and walkability. But few will actually live in Kakaako. But that might also mean that rail usage will also not be optimal in Kakaako – the one place where it could have worked best.

It is true that buildings through Makiki, for example, appear to be far more occupied than many of those already in Kakaako.

I’ll have to check whether there are significant differences in the percent of units that are owner occupied.

But that aside, I wonder if the prediction that “few will actually live in Kakaako” will prove to be correct?

Tourism: Hitting record highs or steadily declining?

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I have to admit being totally confused by the apparent conflict between two recent reports about the state of Hawaii’s visitor industry.

This morning’s Star-Advertiser reports that tourism officials are looking to “extend record-setting visitor numbers” achieved over the past few years (“Tourism officials aim higher“).

Reporter Allison Schaefers tells us:

Hawaii Tourism Authority board members have set a goal of luring 8.41 million travelers to the islands next year. The target reflects an increase of 1.9 percent over the record 8.25 million arrivals expected to be achieved this year. Likewise, officials set a 2015 goal of achieving $15.11 billion in visitor spending, which is 2.8 percent above the record $14.69 billion in spending anticipated this year. The new 2015 targets indicate officials expect the record-setting growth that they have experienced since 2012 to continue.

It sounds like we’ve been doing pretty well in the tourism sector.

But last week, Pacific Business News featured a Q&A with economist Paul Brewbaker which conveyed a very different viewpoint (“Paul Brewbaker on what ails Hawaii’s economy — and how to fix it“).

Here’s one of Brewbaker’s pithy observations (among several worth mentioning):

Tourism export receipts have been shrinking outright for 25 years, not to mention shrinking as a share of Hawaii’s gross domestic product, making people worse off, and all the state can say is “we’re going to keep doing the same old things, fill in the shoulder seasons and get more conventions.” Tourism has been declining ever since we built the Hawaii Convention Center. Correlation is not causation, but when do we get our refund on that loser?

So what are we supposed to make of this situation?

Have we seen several years of record-setting performance in tourism? Or 25 years of declining numbers?

How are these two views reconciled?