In the tropical paradise that is Hawaii, renowned for stunning landscapes and vibrant tourism, a less visible but now more frequently discussed challenge is making big waves. Hawaii’s exceedingly high cost of living has placed a burden that’s especially serious among those who work within the travel sector, where wages generally do not keep pace with the escalating expenses of living in Hawaii.
Hawaii retains the dubious honor of having the highest cost of living in the U.S. According to data from the Missouri Economic Research and Information Center, the average cost of living in Hawaii last year was a staggering 80.3% above the national average. That is being driven primarily by housing expenses, which are 213% higher, too.
Hawaii also has one of the highest median household incomes in the U.S. at over $92k.
That, however, also includes high earners and does not reflect the reality of those employed in lower-wage travel industry jobs. With such high costs, many Hawaii residents find themselves struggling to afford basic necessities. According to Forbes, Hawaii has the lowest disposable income in the nation, averaging just $5,929 per year.
The travel industry remains vital to Hawaii’s economy.
The strain of the situation is felt acutely. Many of those employed in the sector, from hotel and restaurant staff to others, earn wages insufficient to cover the cost of living. This discrepancy is leading to a high turnover rate, staffing shortages forcing irregular service and hours, residents leaving the state, people working three jobs, multi-generational living, and an overall reduced quality of life. This trickles down to also impact visitors’ experiences and is damaging Hawaii’s reputation as a top travel destination.
Moreover, inflation continues to be an issue in Hawaii. The obvious and continuous increases in prices here add more pressure to an already bad economic environment.
The implications for Hawaii travel are big.
With a high and fast-increasing cost of living, attracting and retaining quality staff in Hawaii travel has become an enormous challenge. Various sectors including restaurants, as an example, must often increase wages or offer additional and sometimes unusual benefits to keep their employees.
We know of more than one travel business that has taken to providing housing for their employees in order to retain them. That, however, also leads to higher costs that are passed on to visitors. Hawaii’s competitiveness with other destinations is being eroded when compared with other destinations offering quality travel experiences at a lower cost.
How can Hawaii address these issues?
It isn’t clear how Hawaii can develop policies to help alleviate any of the financial burdens faced by those in the lower income brackets, especially those employed within the travel sector. The most important suggestion that always surfaces but remains unsolved is providing more affordable housing solutions.
As Hawaii continues to attract tourists worldwide, overlooking the needs of those who make the tourism industry run will surely backfire. Balancing the cost of living with wage growth in Hawaii travel is crucial for both the well-being of residents and for the ongoing success of our primary economic engine, the Hawaii travel industry.
What do you think Hawaii should do to help deal with runaway costs impacting the travel sector?
Attacking tourism will cause significant economic harm which will directly impact locals. Wait and see.
Have been to Maui for 20 years . it has reached the point of looking elsewhere for new vacations. Prices are through the roof. Thought I would never say that however it is out of touch with average travelers.
Part 2
Next would be for the State of Hawaii to grant these houses to residents in Hawaii at a sliding scale rate. Those who can pay more would do so and those who can pay less would pay less.
Who will pay for the maintenance?
Who will pay for the insurance?
Will those who have been given these houses at a reduced rate be able to afford the high costs of home ownership?
So, is it again the State of Hawaii who would pay for the maintenance and insurance of these houses?
It is a suggestion to take away the strs from those who legally own them and somehow this would solve the problem of the housing shortage, but it does not seem to be a viable solution.
I do not know the solution, and I do care about the kind people of Hawaii.
Part 1
Dear People who Love Hawaii and want to help and do not know exactly what to do to solve the lack of housing issue,
Many have made the suggestion to eliminate short term rentals as the solution. “If those houses were available for the people of Hawaii, there would no longer be a housing shortage.”
Let’s follow the logic on this suggestion:
People who own strs, if forced to sell, would need to have their str purchased from them. The State of Hawaii would have to purchase the str at market rate. Also, it is reasonable for the people being forced to sell their str, that the related expenses would be reimbursed and loss of future rental income for ‘x’ amount of years.
So, do you think the State of Hawaii is going to do that?