This week’s report from the state regarding Hawaii tourism, and the directly related state’s economy, is significantly better than expected. Strong tourism continues to fly in the face of a possible recession in early 2023.
Our prediction is that airfare will continue to be competitive in those markets that see “The Southwest Effect” but far less so elsewhere. This could, however, also mean that hotels and vacation rentals may remain higher priced due to unexpectedly sustained demand.
First, Hawaii travel has recovered.
The state’s Department of Business, Economic Development and Tourism DBEDT report (shown below) said that a joining of already strong and continuing domestic travel, bolstered by the gradual return of international arrivals, will ensure that Hawaii avoids the impact of any upcoming recession.
Some islands, specifically Kauai, and Maui, which don’t benefit as much from travel from Japan, however, may have additional challenges. The only islands with nonstop service to Japan are Big Island and Oahu.
Mike McCartney, director of DBEDT, said there is reason to be optimistic about the future of Hawai’i’s economy. “Since the last DBEDT economic forecast in August of this year, the state’s economy has remained firm, with improvements in major indicators.”
95% recovery even before international arrivals.
As we prepare to close out 2022, Big Island, Kauai, and Maui tourism have exceeded all expectations, rebounding to nearly 100% of 2019 arrivals. Only Oahu has been slow to return to normalcy, largely due to the lack of visitors from Japan and other countries.
Visitor spending increased 8.5% from January through October compared with 2019.
December and January are likely to be at or near record.
The state predicts that based on the number of air seats available, this month and next week be at the same level as December 2019 and January 2020. In that calculation, over the next two months, 17.5% more seats will be available from the mainland compared with before. Japan seats will, however, have recovered just less than 50%.
2022 Hawaii tourism exceeded all expectations.
The state said that at the end of this month, the year’s visitor arrivals will be 9.3M. That compares with 10.3M in 2019.
Department of Business, Economic Development & Tourism _ State Economic Forecast Unchanged Despite Significant Downward Revision for the U.S. EconomyWe’re certainly glad to hear that Hawaii’s economy will remain strong, but are uncertain whether the impact on travel will be what visitors were hoping for.
Your thoughts?
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Comomark says
We love Hawaii. We dive and swim every day. There is however a limit to our budget.
We could be seen as ‘part of the problem’. We pay a very high rent for a month and are a part of the high price of housing.
We could be seen as part of the solution. We pay the freight.
Whatever happens, don’t ‘nickle dime’ us with local fees. It is demeaning.
William W says
We continue to travel to both Kauai and Big Island as we have timeshare interest there. But we have substantially reduced our spending on activities due to the high costs.
Richard C says
It will be interesting to see how recession proof Hawaiian travel will be when the real recession hits in July or August of next year.
Big tech layoffs, California facing a 25 billion dollar plus deficit, high interest rates causing the housing market to collapse and tightening money supply will bring on a real recession.
States that balanced their budgets on covid relief dollars are right now having cash flow issues and finding fewer places to borrow money to pay their vendors.
The S is about ready to hit the fan.
Christine D says
I own a condo in Kihei which is managed by a large rental agency. I have been told, and I have read in industry publications that due to the difficulties in hiring workers for hospitality jobs that the industry is holding occupancy in the 65% to 80% range, by keeping daily rental rates high. The higher rates provide good income to the hotels and condo rental agencies, yet keep occupancy at lower levels, so they have enough staff to service the rooms and properties.
Marc C says
I am lucky to live on the west coast and therefore able to visit the Islands 3-4 times a year. I was there in October and was stunned at the extreme increases in food and day to day expenses. I’m headed back in January, when it’s normally quieter, and I’m being hit with outrageous increases in hotel rates now (especially for January!). This, unfortunately, will be my Last trip for some time. I am now paying more than Double what I was paying for a week in paradise.
I suspect as other mainlanders see and evaluate the unreasonable hotel rates, the State officials might be caught off guard with a slowdown!
E L says
Recession proof? Tough to predict with any accuracy.
We’ll see.
What’s being done about unaffordable living for all the staff needed by the visitors?
R. S. says
The DBEDT report is a feel good government spin piece.
At first glance it seems great that tourism levels of the first 10 months of 2022 represent an 88.6% recovery from the same period in 2019. Unfortunately that’s also the bad news. Its not a year over year numbers comparison. In essence it means the tourism levels are still 11.4% behind 2019 numbers. Which is still 3 yrs behind when comparing 2019 to 2022. Tourism growth needs to grow exponentially far greater than the current growth rate to just to catch up.
A better or more meaningful matrix would be to compare what the projected growth levels were for 2022 back in 2019. Then one can compare the projected growth numbers to actual growth numbers.
Hal M says
I suspect that, especially as Hawaii makes it more expensive to visit, that it will continue to be reasonably recession proof. The folks who will be able to afford the trip won’t be hit anywhere near as hard by a recession as the lower economic groups.
Nancy S says
No one was complaining in 2019 and early 2020 when tourism was very strong so why the big concern now?
Roy says
Yes it’s still busy on Maui but, nothing like Thanksgiving week. I think if Southwest had the pilots, you would see a great many flights from SWA to Hawaii.
Charles V says
What have you heard regarding Visitor’s fee in Kauai? We will be there in late February. Just curious
Richard M says
We enjoy your Best of Hawaii newsletter very much. Has the visitor parking fees for Maui been resolved?
Beat of Hawaii says
Hi Richard.
Thanks so much for saying that. No they have not. We’ll update with more information soon.
Aloha.