Hawaii Has 10 Million Visitors A Year But Nothing To Show For It

For visitors who have watched Waikiki Beach narrow, harden, and fade year after year, the state has finally put visitor money on the table to try to reverse it. The first allocation is $7 million, earmarked for restoration work at the Halekulani sector, marking the first time green fee dollars have been formally directed at rebuilding Hawaii’s most iconic and most engineered shoreline.

Hawaii welcomes nearly 10 million visitors a year. They pay some of the highest hotel rates and taxes in the country, rent cars at prices that once seemed completely unimaginable, and eat meals that cost twice what they did not that long ago. Billions of dollars flow through the islands annually, mostly tied directly to tourism.

Yet the things Hawaii visitors and residents alike see on the ground tell a different and troubling story. Roads remain deeply potholed and patched. Beach park restrooms are third-world. Public facilities across the state show wear that never quite gets addressed. Service feels thinner than it ever did before, even at our high-end properties. The money keeps coming, but the results never seem to catch up, and in many places appear to be moving backward.

What ten million visitors should produce.

Ten million visitors a year should leave clear marks of success. Infrastructure should look improved or at least maintained, rather than barely holding together. Visitor economy jobs should provide enough stability that workers are not constantly stretched thin, cycling out, or leaving entirely. Hawaii operating at the scale of tourism it does should generate momentum that lifts the places and people who support it.

Instead, what Hawaii visitors encounter feels like a mismatch. High prices signal abundance, but the physical and human systems behind the experience suggest scarcity. The disconnect is obvious enough that both visitors and residents comment on it endlessly without looking at any data or economic theory.

The data behind a familiar feeling.

That sense of imbalance isn’t imagined, of course. A major new report from the University of Hawaii Economic Research Organization, the state’s data arm, has finally put numbers behind what many people have been sensing in Hawaii for years. In real terms, after inflation adjustment, tourism spending in Hawaii peaked decades ago and never meaningfully recovered. Visitor counts kept rising long after that point, but the real economic output tied to those visits did not. More people came. The economy has stayed essentially stuck in place.

The report, titled “Beyond the Price of Paradise: Is Hawaii Being Left Behind?”, reframes decades of assumptions about how our visitor economy works. Hawaii did not fail to attract tourists. It succeeded at that better than almost anywhere else on earth. What it did not do was translate higher visitor volume into any sustained economic growth.

Why Hawaii looks more like the “Rust Belt.”

Once Hawaii’s income, productivity, and GDP are adjusted for the state’s unusually high cost of living, the comparisons become painful. Hawaii does not resemble California, Washington, or other high-cost coastal states that managed to pair high prices with rising incomes. It does not look like a form of premium economy. Instead, UHERO’s analysis sadly places Hawaii alongside parts of Appalachia, the rural South, and the Rust Belt.

Lead author Steven Bond-Smith said Hawaii residents “feel the same sorts of economic stress” as people in former coal-mining regions, rural Southern communities, and Central Valley towns in California. His co-author Carl Bonham warned that if nothing changes, the gap between Hawaii and the rest of the country will get “dramatically worse” over the next 30 years. That is unexpected language not usually associated with a destination welcoming ten million visitors annually.

Working more for less.

What is behind those comparisons is straightforward. Workers in Hawaii earn roughly 20% to 30% less than workers in comparable jobs on the mainland. To make up the difference, many take second or third jobs or work longer hours. Since the early 1990s, Hawaii’s per capita economic growth has, in fact, averaged less than half the national rate.

When purchasing power is adjusted for Hawaii’s local prices, Honolulu ends up grouped with places like Morgantown, West Virginia. Maui’s adjusted economic output is barely more than that of Binghamton, New York. As Bonham put it, “It’s not that our costs are going up faster, it’s that our income isn’t going up as fast.”

How tourism crowded everything else out.

UHERO points to a dynamic economists call Dutch disease. When a single industry dominates an economy, it absorbs labor, capital, and political attention so completely that little else can develop alongside it. That defines Hawaii in a nutshell. Here, tourism has filled that role for decades. Efforts to diversify either stalled, faced heavy resistance, or never reached a viable scale. The state ended up with only one significant economic engine and no meaningful backup.

That engine stayed busy. Flights filled, hotels expanded, and more were built; visitor counts continued to climb. But its real output stopped growing in the early 1990s. The activity continued. The returns, however, did not.

When the tap turns off.

This vulnerability becomes apparent whenever tourism begins to falter. During the Great Recession, Hawaii’s economy fell harder and recovered more slowly than in most other places in the U.S. When travel stopped during COVID, the collapse was even more severe than before. Each crisis exposed the same weakness, and then some. Each recovery returned to the same plateau. Visitor numbers have eventually rebounded, but the underlying structure simply did not change.

The cycle reinforced itself. When times were good, the system appeared to work well enough to avoid major reform. When times were bad, the lack of alternatives became painfully clear.

What “nothing to show for it” actually looks like.

On the ground, “nothing to show for it” is not some abstract idea. Across the state, beach park restrooms at heavily visited sites stay closed or partially functional for long stretches, even as parking lots fill daily. Roads carrying constant rental car and tour van traffic degrade faster than they are repaired, with temporary fixes becoming semi-permanent. Services tied to visitor use operate short-staffed, with limited hours that feel out of sync with the volume that passes through.

Hotels never stop posting new record rates while struggling to staff housekeeping and food service, and the service gaps are visible to guests, even if the reasons behind them are unclear. Workers who make the visitor experience function commute farther, juggle multiple jobs, or accept housing arrangements that would have been unthinkable before. None of this looks like the output of an economy that benefits from 10 million visitors a year. It looks like a system running at full capacity and still quickly falling behind.

What the data now shows.

UHERO’s researchers note what visitors could have easily told them: that Hawaii has always been expensive. That alone does not explain what is happening now. The difference is that wages, productivity, and overall economic growth stopped keeping pace with the cost of living. For decades, the state relied on rising visitor numbers to compensate for a lack of real growth. That worked for a while. Then it stopped. The gap is clear, and it is growing.

The report points to the need for follow-up work on long-term economic development and diversification. Whether that leads to meaningful change remains to be seen. The data already shows that Hawaii did not suddenly become unaffordable. Ten million visitors arrive each year, and the state of the economy meant to support them has barely moved in more than three decades.

What do you see when you visit now that feels out of sync with the volume of people and money flowing through the islands? What can you offer for what should come next?