Feast or Famine returns to the discussion table with the question of whether Hawaii will be facing too many or too few visitors. As all the talk turns from Covid to possible recession, here’s how Hawaii travel may look due to an upcoming economic slowdown.
It’s a weird world these days. We’re either obessed with one thing, or with another thing. There seems to be very little time in between. Whew, does anyone else need a break from the intensity here or is it just us?
Visitors and residents sound-off on Hawaii tourism: not enough or too much.
Domestic visitor arrivals in Hawaii are still at record numbers as summer starts in earnest today. But will that trend continue, or are we about to see another huge change, at which point the entire conversation may turn on a dime.
The last albeit brief recession in Hawaii was 2020-2021, when the unemployment rate went to 8% and there were no visitors to speak of. In fact arrivals dropped to just 5% of what they are today during Covid.
Looking back further, the 2007–2009 recession caused a loss of at least $3 billion here in Hawaii, mostly due to the huge reduction in visitors. That was a time when we had the islands all to ourselves, much like with Covid. We won’t soon forget being on normally crowded beaches and seeing no one. The impact was so severe in our state, which relies predominantly on just one industry, tourism.
Signs that visit numbers and travel costs may be about to self-correct?
We said yesterday that car rental prices are dropping. No joke. And that’s really just the start. The hundreds of comments about the ridiculous prices of car rentals in Hawaii may soon come to an end. Hotel rates are slowly starting to decline as well, and we anticipate no less than a 25% reduction in Hawaii accommodation rates over the next sixty days.
If we learned anything from the recession of 2007–2009, visitors stopped coming, hotel occupancy sank and room rates dropped. Given how much Hawaii hotel prices have jumped, that’d be a welcome relief.
There are more signs that this kind of change may be on the horizon.
Hawaii tourism remains vulnerable to huge swings.
With our lack of economic diversification, Hawaii can experience rapid economic change. That’s because a significant decline in Hawaii tourism and visitor spending is possible, and perhaps even imminent. Looking back at 2007–2009, you’ll recall that was also when Aloha Airlines and ATA Airways went out of business, NCL ended two of its three weekly Hawaii cruises permanently, and some Hawaii hotels ran out of money to pay their mortgages.
What would an about-face regarding Hawaii overtourism look like?
Hawaii remains reliant on tourism exactly as was the case before the 2007–2009 recession. It took until 2012 for visitor numbers to return to pre-recession levels. Visitor spending dropped precipitously, too, from which is has largely never recovered.
The state has estimated that if an upcoming recession were of the same severity as the 2007–2009 one, visitor arrivals would be close to 1.5 million per year less, with up to 11 million fewer total visitor days and close to $4 billion in less annual visitor money.
We welcome your comments.
Hi Irene, “Was their Ancestors Land” perhaps, since State Hood it certainly isn’t solely “Their Land” unless they purchased a piece. It’s a hard reality that Needs to be faced by those who make these and other claims. Hawaiian Heritage Needs to be Preserved and Controversial Claims and Such will not make it any easier to do so. Being Provocative and Unreasonable can destroy credibility.
Ernie, please stop. Every world court has ruled that the overthrow and occupation of Hawaii by the US is and was illegal. Kanaka had no con crept of owning land until the US stole it. You also support Kanaka far less than you give yourself credit for on your vacations. There are many get-rich-quick posers who claim to be local but are in fact temporary residents with no vested interest in the health and well being of Hawaii. Sorry this is inconvenient for you, but truth is truth. hawaiiankingdom.org/blog/united-nations-acknowledges-the-occupation-of-the-hawaiian-kingdom/
Hi John W, have lived in area’s where rental properties are highly concentrated beyond what Hawaii is experiencing. Parking Permits allowing Only a certain number of vehicles per household and being Registered by license plate number helps a lot, police enforcement is a must. Noise Ordinance Violations, other Citations, Etc. Many remedies! Plenty of rentals just not in preferred areas, cost dictated by area, be less picky, options exist!
Hi John W! I have read your post and am interested by what you’ve said. Turo Cars lining Your Streets? Very Doubtful that would occur,exaggerating a Doubtful scenario doesn’t help anything nor make it true. Wherever Solutions can be found for Hawaii to be less dependent on Tourism shouldn’t matter, after 1,000 years it’s not been solved by the Inhabitants Yet. Don’t burn the bridges to possible ideas or Hawaii may never change.
I guess you missed the discussion on here Ernie that addressed this. Many neighborhoods in Hawaii have very limited parking for the people that live there. Some people have started a home based Turo operation and parked multiple cars in their neighborhood causing issues with their neighbors.
Common ground here Ernie. While I certainly wouldn’t want to see someone not from Hawaii trying to tell Hawaii how they should handle their own tourism, I would agree that outside experts could be helpful in finding alternatives to tourism. Environmental Technology, Medicine that bridges East and West, Agribusiness etc …Hawaii would obviously benefit from alternatives, it’s just that the people who live here and understand Hawaii are the ones that should be responsible for the direction tourism takes. It’s kind of like the difference between Hawaiian Air and the mainland airlines. Hawaiian does a better job serving Hawaii then anyone else because they know the Islands, but they get their airplanes from elsewhere.
Hi Benii, there’s some kind of small exclusion area that is not effected, it seems to be extremely close to the Resort Areas. Other than that it effects Every Rental Property unless it’s non profit. Unless you lower the Rent from $850 per night to $2500 per month to allow 90 day normal renters you’re unable to rent it.Not happening with a $6 Million Property! This is the handy work of the Resorts and Hotels protecting themselves from competition of any kind. This Should Apply to Them as well! Quid Pro Quo!?!?
Hi Irene! To give you a small glimpse of the Local Support We give I submit this. About 1/4 of our trip goes to the Airline, less than $500. We stay in Kahala at our Relatives home, nothing but food cost there, and have rented a vehicle from Turo for the entire vacation of 18 days. That cost is less than $600. and benefits the local economy. We travel Oahu extensively, typically eat at food trucks and locally owned restaurants, that costs us around $500. benefiting locals. We shop for gifts to bring home, mostly Local Shops, another $350. We do our best to spend locally and Respect Everything, Everyone and Don’t Litter as some do. We ask nicely but never demand. Politics never enters conversations or attitudes.
Hi Pat, currently you’re absolutely correct. Governor Ige has been waiting for Oahu to enact the new laws and has stated that once they are He Will be using Their Model for the Entire State shortly thereafter. He wants Uniformity across all of the Island/Counties. He didn’t want to stick His Neck Out so He decided to do it this way. It will be coming, sorry to say.
Ige is not going to be able to standardize what he has done on Oahu to apply to all the islands, for a variety of reasons, not the least of which that at least on Maui, thousands of short-term rentals have been codified to allow particular uses, and trying to remove those rights would be considered “taking” by Hawaii Law and result in large, very expensive lawsuits.
Plus don’t forget there is an election coming up. Who knows who will win, and what that person’s vision will be.
STRs are always accused of contributing to Hawaii’s housing crisis, and creating annoyances and burdens for neighborhoods, vacation rental owners are “a scapegoat for the politicians” in Honolulu and all the islands, Hotels are in the politicians’ pockets!
If there’s a problem with affordable housing, they blame the vacation rentals. If there’s a problem with noise in the neighborhood, they blame the vacation rentals. Scapegoat for votes, and for the good of the hotels.
Actually Beni, if you have ever lived in a neighborhood that has multiple vacation rentals you would understand just how problematic it can be. In areas where there were a lot of vacation rentals the people who lived there were in fact having a much harder time finding a rental to live in. Having lived in an area before it became host to multiple vacation rentals and then watched the transformation I can attest there is a lot more going on then scapegoating and being in the pocket of big business.
None of what’s happening has been “normal”. Unprecedented crazy times. We had a huge surge in pent up demand from the mainland when Hawaii reopened. Obviously that would ultimately slow down. I’m guessing Japan will fully open by August. Seems to me there will be a similar surge in International tourists. Eventually tourism will settle on a healthy balance of mainland/international tourists.
Let’s hope so!