Hawaii tourism outlook is flat amid challenges, economists say

Feb. 12—The forecast for Hawaii tourism in 2024 is "same old ": a year of flat visitor arrivals, which aren't even expected to recover to Hawaii's benchmark 2019 level until after 2025.

The forecast for Hawaii tourism in 2024 is "same old ": a year of flat visitor arrivals, which aren't even expected to recover to Hawaii's benchmark 2019 level until after 2025.

That was the opinion of Eugene Tian, state economist for the state Department of Business, Economic Development and Tourism, and other experts who spoke Thursday at the 2024 Annual Outlook &Economic Forecast Forum for the Hawaii Chapters of the Pacific Asia Travel Association and the Travel and Tourism Research Association.

"The economy for the U.S. is going to slow down in 2024. (The economic growth projection for the U.S.) was about 2.4 % in 2023, and it's going down to 1.6 % in 2024 and 1.7 % in 2025, " Tian said.

He added that the economy will be slower this year than it was in 2024 for most of Hawaii's tourism source markets.

"The news is not too good, but it's pretty much flat for 2024 in terms of tourism, " Tian said.

Those in Hawaii's overtourism camp, who have pushed back since visitor arrivals rose above 10 million in 2019, aren't likely to feel much angst. However, Hawaii's visitor industry is likely to view the stagnancy less positively, especially since plenty of headwinds are on the horizon.

Dale Carstensen, FLEX project director, leisure sales, Hawaii and French Polynesia, a member of the Marriott International Sales Organization, said headwinds include the state of global economics, competing destinations, airline support for Hawaii, and Hawaii government's stand on tourism.

Tian said Hawaii's 2024 tourism outlook closely parallels the national forecast provided by Aran Ryan, director of industry studies at Tourism Economics.

"While travel nationwide showed signs of resilience and recovery in 2023, the industry enters 2024 with the challenge of a slowing economy, weakening finances and international headwinds, " Ryan said.

Tian said in DBEDT's most recent economic forecast, released in December, that visitor arrivals to Hawaii in 2024 and 2025 were expected to reach 9.8 million and 10.1 million, respectively, which is still below the 2019 benchmark of 10.4 million arrivals. Tian said Hawaii's real gross domestic product—the value of all goods and services—during the third quarter of 2023 was at only 97.7 % of 2019's third-quarter level.

"We have not recovered, but the U.S. economy has pretty much recovered in 2021, so we have been falling behind, " he said, adding that Hawai's nontourism sectors have fully recovered to 100 %, but Hawaii's tourism sector is at only about 90 % recovery.

Chris Kam, Omintrak Group president, said the labor shortage in Hawaii likely cut into productivity growth, especially for tourism.

Indeed, Tian said overall unfilled jobs in Hawaii averaged 7, 400 a month in 2019 but were 11, 400 during first 11 months of 2023.

Paul Brewbaker, principal of TZ Economics, also expressed a concern that reducing visitor arrivals is the No. 1 goal in the Oahu Destination Management Action Plan, a community-driven visioning process for tourism and stewardship goals. He said Hawaii's visitor plant inventory stopped growing after the 1980s, and recently, crackdowns on short-term rentals could obliterate jobs and incomes and stifle travel and tourism innovation such as the new trend of remote workers combining business and travel.

"Hawaii traded away growth for volatility after the 1980s, without insurance, " Brewbaker said. "Be careful what you wish for in suppressing lodging receipts. 'Those taro loi volunteers sure spend tons of money, ' said nobody, ever."