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 2007ā2009 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 2007ā2009, visitors stopped coming, hotel occupancy sank andĀ 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 2007ā2009, 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 2007ā2009 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 2007ā2009 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.
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Rod W says
Patrick, that was for 4 days in February – Oahu.
Take care!
Ernie S. says
Hi Susan K, your dream/dreams may one day become a reality for you, don’t give up because of the Immature Adolescent behavior of a Minority. Most people will be Happy to have you visit, our money keeps their economy and lifeblood going. Currently the Costs are Outrageous and soon to be changes will probably stop many but wait a while, things will be changing for the better in a year or two. Until then, the Caribbean and West Indies are Spectacular, just don’t stay on the Atlantic Side.
Irene says
Please do a little research. The vast majority of your vacation dollars goes to airline, hotel, and car rental chains not located in Hawaii. You are not hurting us like you think you are by vacationing elsewhere. This is exactly the attitude that aggravates localsā¦we are not beholding to you.
PatG says
The pandemic proved this wrong. Suffering people out of work everywhere. It would be nice if the economy was more diversified, but donāt pretend that tourism isnāt critical to the livelihoods of the Hawaiian people. If they desire and need to work, that is.
Ernie S. says
Hi Pat G, only problem with short term rentals will be the New and Improved Private Rental Restrictions coming very soon. No more short term rentals allowed, you have to rent it for 3 full months! It’s a crazy new Law that effects all of the Islands. Thank the New Tourism Agency for this and let’s Not forget the other culprits that had their hands in this, the Resorts and Hotel Industry.
PatG says
Ernie, that new law only affects Oahu.
BENI says
I’m not so sure that the 3 month minimum rentals affects all short term rentals, maybe just the homes in neighbors that restrict short term due to their HOA’s.
Susan K. says
My whole life, I have dreamt of visiting the islands to view the beauty of the land and her people. My soul is crushed knowing that I am not wanted there. Perhaps it is time to give up the dream and visit another land that is welcoming to an outsider and willing the share the natural beauty of their homeland. And, yes, by true definition of the term, I am a haole, because my DNA is a huge melting pot. Proud of who I am and not hung up on who my ancestors were or were not.
Patrick says
I really don’t think you need to worry ab out it. In the countless times I’ve been there (mainly Kauai) I’ve never had a problem with any of the locals. I do tend to stay away from the big tourist areas but be nice, fit in, and you should be fine.
Ernie S. says
The possibility of a Recession should be Encouraging for all of the Hawaiians that would prefer the end of Tourism. I do Believe that the loss of Billions in Income to Businesses, and the Governments, will bring Unfortunate Consequences. Reality hits very quickly when the money stops abruptly, how many will see businesses shuttered for good? I Pray š and Hope that Hawaii is Prepared in case Reality and Recession Hits!
JohnW says
Ernie, Iāve lived here for 36 years and seen plenty of recessionās, downturns, 9/11 etc etc. Hawaii will always be Hawaii. There are always ups and downs and the current wave of politically inspired haters throwing stones from the mainland defines them, not Hawaii. Our Country’s democracy has come under attack and we are about to find out if we actually are a decent Country or not. Whatever happens people that arenāt so politically motivated from all over the world will flock here.
Deb says
As a former resident and now, visitor, Iāve come to the sad conclusion that visiting isnāt in my budget at the current prices. I can understand prices going up at the rate of inflation, but hotels have more than doubled. Iād even pay for the car, but flights are outrageous. The jet fuel prices I can understand and justify, but the hotel room is the same room I paid half for in 2019. Hawaii needs to find a happy medium, cost-wise. Until they do, Iām looking elsewhere.
PatG says
Have you tried short-term rentals? Most on Maui are half the price of hotels, some even less than that. Plus you get a kitchen, living room, washer/dryer, etc.
PatG says
Why the downvotes? There is nothing wrong with short-term rentals, as long as they were built as short-term rentals, have always been short term rentals, are not taking housing stock away from locals (most locals wouldnāt be able to afford them), and they are in resort areas and not affecting residential neighborhoods. There are actually quite a few of these, at least on Maui. Just make sure they have been legally registered and permitted.
Gloria G says
We just got back from 10 days on Maui and one week on Kauai. We stayed at the Hanalei Colony Resort that had ridiculous rates. When we checked in they said that their nightly rate was now $950/night and the restaurant on property was closed down. We didn’t notice any difference in the prices of food from last year at the same time since it has always been sky high! You just can’t help but feel you are being taken advantage of and the joy of being there is taken away because the only thing that is affordable is the airfare!
Rod W says
In February I needed help counting inventory. I ran ads offering $50/hour for 4 full days. I needed almost 20 people – I got 1 local. So, I flew 16 from the mainland.
I hope there’s more interest next year, especially from those who don’t appreciate all the visitors.
patrick says
$50 an hour? I’d work for that. Give me a call and I’ll come over. Which island? š
Rob says
I don’t know about other islands, but as for Kauai, it seems to me that one problem is the large inventory of houses and condos for rent on AirB&B, VRBO, etc. There are issues with regulating rentals in areas where they are permitted, but I wouldn’t be surprised if most of those owners do not collect and pay taxes on the rents. If Hawaii enforced its existing tax laws through a more rigorous regulatory regime, volume might decrease significantly.
BENI says
Airbnb & VRBO Require you to put in your TAT and GET numbers in the ads, and they are displayed, along with your property real estate ID numbers, the State of HI monitors those sites, so you’re incorrect. What the state doesn’t monitor is collecting the long-term sales tax on long term rentals, which isn’t collected those rents also probably go without reporting locally and on Federal income tax returns on the long-term rentals, so again the STR’s mainly support the island and state
Irene says
We have lived through recessions, lockdown, & too much tourism and yearn for the return of sanity as numbers dwindle. Locals donāt benefit from tourism, big corporations do. After the last year and a half of revenge tourists ruining everything, a recession will be a welcome change. Our reefs that were teeming with fish during lockdown are now fishless and covered in sunscreen sludge even though reef safe sunscreen is required by law. Our store shelves are empty, traffic is a nightmare, and almost every local I know has been abused by a tourist with an attitude because āthey spent a lot of money to be here.ā I hope that every non-local who bought a home to rent out short term is forced to sell at an affordable price to a local family.
Rob says
True, true, true!
Chris H says
While I concur with others that balance in the numbers is essential, I disagree with the comment that “locals don’t benefit from tourism”. Tell that to the housekeepers, on-island managers, contractors, handymen, chefs, restaurant workers, tour guides, employees of airlines, rental car companies, etc., to say nothing of the state and county employees that receive, count and distribute the millions of dollars in TAT and GET monies generated by our vacation rentals.
Ernie S. says
Hi Irene, glad to hear from someone that enjoys solitude. Did you, and the others that complain, realize that You Do benefit from Tourism? All of the Money keeps people Employed with Benefits? It Pays for Improvements across the State, keeps Roofs over people’s heads and Food to eat? Everyone Enjoys those Benefits and More! The Fish are there, Sunscreen isn’t the problem. Think before you want Tourism to go away, Hawaii and Hawaiians can’t afford it! Have a Nice Day.
JohnW says
Canāt let your comment about sunscreen go unchecked Ernieā¦.sunscreens with certain petrochemicals are definitely a problem for our coral reefs. Also itās not a Hawaii only thing. Those sunscreens are also banned in the Virgin Isles and Florida Keys. Rightfully so.
Patrick says
But how does one regulate that? I’m pretty sure bags aren’t checked upon entering HI for the bad stuff.
Irene says
You are woefully misinformed.
BENI says
Irene, would you sell your $20,000 car for $5,000 because someone else “needed/wanted” it? Would you go take an electric bike from someone because you want/need it instead of buying yourself a peddle bike?
Richard C says
As I stated in a previous post credit card debt is climbing at an alarming rate. American credit card buying power will max out in 6 to 9 months.
By the way check your mail Iāve noticed a considerable increase of zero interest credit card offers and without requesting 2 Iāve my credit card limits were just raised.
Back in April I booked travel to Oahu for October if I book same resort stays today the price has more than doubled.
Have not found a drop of rental car prices on Costco yet.
Paula G says
I think balance needs to be achieved in our state, politicians donāt seem to understand the word ābalanceā the pendulum seems to always swing too far one way or the other. I hope that at some point they will see a way to self sustainability and welcome visitors in a measure and happy way that is good for all.
rob L. says
At the risk of opening another can of worms, I wonder how many people are aware of the entrance and parking fees being assessed to non-resident Hawaii visitors at Koke’e State Park and Waimea Canyon. We’ve enjoyed visiting these areas every year for the past 12 years, but no more. The cost is insignificant, but the attitude of the tourism bureau is detrimental. No more visits.
VB says
I totally agree with you. If they want to charge fees, they should add educational signs & information. We donāt have that discrimination on the mainland attractions
JohnW says
Last time I went to Mt Hood Oregon I had to pay for a parking pass, same with Yellowstoneā¦the list goes on but you get the point. Hawaii needs to manage itās resources now or they will disappear. Again, a lot of people not from here trying to tell us how to run the State to best cater to them. Hawaii needs to protect itās future and the tourism that is best for Hawaii will follow. Hint, itās not mass marketing and making it as cheap as possible for as many people as we can possibly shoehorn into here.
Jared X says
The core come-away here is the dangerous lack economic diversity in Hawaii today… and that’s largely due to legislative mismanagement and lack of leadership, planning, or vision–from the top down. Certainly Hawaii’s core asset is its natural beauty–and the preservation and enhancement of that should absolutely be at the center of any master plan for Hawaiian economic development and sustainability. But close behind that should be self-sustainability and weaning the state and county economies OFF of such a dangerous reliance on tourism–both for jobs and for tax dollars. That money is like a drug… and the government needs to get clean and sober.
Rod W says
Jared X,
What would realistically replace a significant chunk of tourism?
The mainland is over 2,000 miles, Japan 4,000, China 5,000.
I think the issue is how to sell tourism while maintaining the distinctiveness of Hawaii. I think in the long term there is no way for Hawaii to move away from significant tourism. So, learn how to better capitalize on it, while being a welcoming destination. It’s up to Hawaii to figure it all out – with outside help from real tourism experts.
JohnW says
Outside help from ārealā tourism experts Rod? So Hawaii can become like where? Las Vegas? Orlando? So many comments on here by āoutsidersā telling us they think Hawaii should cater to themā¦..We donāt want our neighborhoods turned into tourist havens and our street parking lined with Turoās. Hawaii needs to take care of Hawaii and find a sustainable future balance. Clearly that sure wonāt be done by people from the mainland.
Rod W says
John,
I’m no “outsider.”
First trip 1965, most recent trip 2021. Next trip, this September.
And, like you and most other residents of Hawaii, I’m an American and entitled to my opinion.
Experts can HELP plan Hawaii’s future just as they Help plan in other states. Hawaii is not exempt from common sense, although some seem to think it’s not a part of the USA.
BENI says
What if Vegas (you know the 9th island) decided to limit Hawaiian residents or charge them extra? You’d hear cries like nothing you’ve ever heard in your life!! LOL..
Mike D says
The summer vacations have probably already been booked. But youāre correct that because if jet fuel prices and inflation, I see it hitting Hawaii hard in September and October. But what a double edged sword. Ige was telling people to stay away, now too many people, then hey please come we need you. What a roller coaster. Either way, I want to read about solutions. Plan for it.
Patrick says
I don’t get it. “Everyone” is so happy when the tourists stay away (for whatever reason) but then complain about the hit to the economy an unemployment. Who Are these happy and sad individuals?
Jared X says
You are essentially talking about two different groups of people–not the same group. The “locals”–particularly the unemployed / state-supported locals–that don’t own tourist-dependent businesses and generally don’t work at all–or work at government jobs–are the ones that are anti-tourism / pro-COVID restrictions. Their incomes and lifestyles are tourism-proof and they’re happy to have their island(s) all to themselves–and rightly so. And it’s “the State”–i.e. the government (state and county)–as well as multi-national chains (hotels, rental cars, fast food, etc)–and other tourist-dependent business owners that want a full recovery of “normal” tourism as quickly and painlessly as possible. You can never make both groups happy.
PatG says
@Jared X – The state and county governments do *not* want tourism to return. They are actively working on bills and resolutions that have the sole purpose of reducing tourism. Please listen to the last 2 Maui Planning and Sustained Land Use committee meetings. The videos are available under the County of Maui website, under Agendas.
BENI says
PATG you’re wrong, government is putting up a “front” to get votes, do you really think the hotels are not in their pockets? The Hiltons are building a huge complex on Maui (right now) and were able to put a restaurant On the Beach, its being built right now, now one else can build anything on the beach! how’d that happen? The Billions the state spent on the rail is ridiculous, also voted down by the people, yet it was built anyway.. who was padding those government buddies pockets? The rail wasn’t built by residents.. The good old days of a “go fund me” was getting a job not a website.
PatG says
– The council have put a moratorium on building transient vacation rentals, including hotels. There is a cap now, and no more can be built. Any hotels that you see being built were already in the pipeline and approved before the caps were set. This will result in a loss of tax revenue for the state and Maui County.
– The council is now trying to allow condominium complexes to decrease their taxes by declaring that they forbid short-term rentals, even though they are on the Minatoya list. The Minatoya list is a list of condo complexes in Apartment district that have historically been allowed to do short-term rentals. This will result in a loss of tax revenue for the state and Maui County.
PatG says
– I have been to many, many council meetings, and it is crystal clear and unanimous that the desire is to reduce tourism. The council has pretty much given up on the idea of hoping that resort units get transformed into affordable housing, since that is a ludicrous idea. The resort units would be unaffordable by definition. All it would accomplish is having empty units for most of the year, and a large loss of tax revenue, since short-term rentals pay 4 times the rent of non-owner-occupied residences.
None of this suggests that hotels have the council in its pocket, or that council concerns are for voting purposes only and arenāt genuine. The council is feeling the pain of overtourism along with everyone else.
BenI says
Hawaiian Homeland properties charge their occupants $1 a year, that $1 a year will not support anything, last I checked our police don’t work for $1 even an hour.. so someone’s tax dollars are supporting everything here.
Irene says
Itās their land, always was. The purpose of Hawaii Homelands is to reconnect Kanaka to their ancestral lands, not to make money.
Beni says
It takes money… to fund all the things you enjoy, parks, roads, police dept. stores, gas stations etc… maybe defund the police is something you prefer, they’re not going to work for free
Yachtscott L says
I hope some of these prices drop. Pre pandemic our go to hotel was pricy enough with rooms from $350-500 night depending on occupancy etc. Today, have not seen a room under $1000++ in the past year and a half. Last summer we rented on that resorts property a house and now this year the same property has gone up $400/ night! Really a turn off to one of my favorite places that I have been coming to since the early 1970ās so I think a correction is due. I understand prices help limit tourists and that is a good thing in the islands, overcrowding is not good for locals and tourists alike even if everyone is respectful of the culture and beauty. If a correction occurs, for me that will mean am extra trip or a longer stay. Aloha
Colleen says
In a recession – especially if one is on a fixed income – one cannot afford to be gouged every where you turn. Hotel, airfare, restaurants, car rental, excursions, etc. When choices must be made between the gas pump at home, food and other necessities at home (even utilities are UP) then one must rethink vacations – even in Paradise. We have the miles, so we can get there. But do we really Want to spend more and more and More on everything else? Difficult choices. Hawaii, like all other vacation destinations, will have to rethink their priorities as well. Our “Hawaiian Vacation” may be just our memories. That is sad. But everyone must make reasonably intelligent decisions an Prioritize. And we do believe ‘hard times are a comin’……. :0/
Colleen says
Oh how we remember the ’70s, ’80s, 2008, and Now, here we go again! Hang on!
Beat of Hawaii says
Hi Colleen.
We’re with you. Thanks for your 333 comments to date!
Aloha. .
Jim E says
Those of us mainlanders that love Hawaii and itās people are thsnkful for all HI residents that the HI economy seek to be normalizing somewhat.
As to the Governorās handling or mishandling of the tourist economy – given the benefit of the doubt that decisions were made in good faith – the age-old advice still applies āā- to be careful what you wish for. Jim E
PatG says
Everybody told Haoles to Go Home. We are about to get our wish. Good job! Time to celebrate!
Chris S says
For selfish reasons I would say hallelujah š
Would enjoy my daily beach walks a little less crowded but donāt wish for a repeat full blown recession. Balance just balance
Beat of Hawaii says
Hi Chris.
That was our point, exactly. Where’s balance to be found anywhere?
Aloha.
Terry D says
Yes, balance please! We have been visiting Hawaii every year or two (as budget permits) since 2005 because we fell in love with the people, culture of Aloha & beauty of the Islands. We are honored to be welcomed there, and try our best to practice mÄlama/kuleana. We support local businesses almost exclusively (we have had to make a late night run to Longs Drugs occasionally, so it’s not 100%). My husband is a diver and participates in reef cleanup every time we are on Maui. We are not wealthy but just working stiffs that save up to come over to the place we consider heaven on earth. We understand history/why tourists will never be completely welcome, but we hope to be able to visit going forward. We abhor rude tourists too.
Steve D says
We are in the midst of a nine day visit at Poipu. Gas is less here than in California. We prepare breakfast and dinner in our rented condo. Lunch is enjoyed as an outing where the prices are about the same as we saw a few years ago when we were here. I booked our car through National at about the same price as a few years ago. We have been treated very well by the locals. All in all do your homework, plan way ahead, look for deals. Treat the locals well and with respect. Obey the speed limits. Keep your spoiled children under control. Tip generously. Weāll be back to kaanipali next February to watch the whales. I love it here.