Tourism

Self-correcting tourism in Hawaii is hitting the economy

“Feast or Famine” returns to the discussion with the question of whether Hawaii will welcome too many or too few visitors. As all the talk turns from Covid to a possible recession, here’s what a trip to Hawaii due to the upcoming economic downturn could look like.

It’s a strange world these days. We are obese either in one or in the other. There seems to be very little time between them. Phew, does anyone else need a break from the tension here or just us?

Visitors and residents are dissatisfied with tourism in Hawaii: little or too much.

The arrival of domestic visitors to Hawaii is still at an all-time high as summer is in full swing today. But will this trend continue, or will we see another huge change, after which the whole conversation could change.

The last, albeit brief, recession in Hawaii was in 2020-2021, when the unemployment rate reached 8% and visitors were out of the question. In fact, during Covid, arrivals dropped to just 5% of what they are today.

In hindsight, the 2007-2009 recession caused Hawaii to lose at least $3 billion, mostly due to a huge drop in visitors. It was a time when all the islands were at our disposal, as was the case with Covid. We will not soon forget that we were on the usually crowded beaches and did not see anyone. The impact has been so severe in our state that effectively relies on just one industry – tourism.

Signs that the number of visits and fares may be self-correcting?

Yesterday we said that car rental prices are falling. Not a joke. And this is really just the beginning. Hundreds of comments about ridiculous car rental prices in Hawaii may soon end. Hotel prices are also slowly starting to decline and we expect reducing the cost of living in Hawaii by at least 25% over the next sixty days.

If we learned anything during the 2007-2009 recession, visitors stopped coming, hotel occupancy dropped, and room prices dropped. Considering how much hotel prices have skyrocketed in Hawaii, this would be a welcome relief.

There are other signs that this kind of change may be on the horizon.

Tourism in Hawaii remains vulnerable to huge fluctuations.

Due to the lack of economic diversification, Hawaii may experience rapid economic change. This is because a significant decline in tourism and visitor spending in Hawaii is possible and perhaps even inevitable. Looking back at 2007-2009, you remember that it was also when Aloha Airlines and ATA Airways went out of business, NCL permanently ended two of its three weekly cruises to Hawaii, and some hotels in Hawaii ran out of money to pay off their mortgages.

What would a dramatic change in overtourism in Hawaii look like?

Hawaii is still tied to tourism in exactly the same way it was before the 2007-2009 recession. Only in 2012 did the number of visitors return to pre-crisis levels. Visitor spending also plummeted, and largely failed to recover from this.

The state calculated that if the upcoming recession were the same…

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