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Report: Hawaii's tourism industry in state of crisis

April 2, 2009 |  3:46 pm

Diamondhead

The stock market has posted gains for a third consecutive day, but there are scant positive signs elsewhere for the beleaguered economy.

There remains significant trouble in paradise, where diminished airline and cruise ship service combined with a global financial collapse have Hawaii reeling more than other areas not so dependent on tourism.

An article in the Honolulu Star-Bulletin quoted economist Leroy Laney as saying Hawaii's visitor services industry is in "crisis mode." Laney's commissioned report paints a bleak picture not expected to begin improving until perhaps 2011.

"While there may be some recovery in the Hawaii visitor industry in 2010, the increase in arrivals will likely remain almost flat, in the very low single digits at best, for 2010," Laney said. "We can hope for better performance in 2011, but the increase in arrivals may still remain in the low single digits."

Tourism accounts for a quarter of Hawaii's gross domestic product and one-third of its jobs. Visitation was down last year 10.8%, which meant $113 million less in the state's general fund.

"It is imperative that all possible actions be taken to remedy the situation," Laney said. "If that does not happen, or until it does, the Hawaii economy will remain anemic. Employment in all sectors will be down, as will tax revenues, business profits, and overall economic well-being."

What those actions might be remains unclear. All segments are suffering. Job creation is difficult.

Mike McCartney, the new president of the Hawaii Tourism Authority, has a monumental task before him — kind of like paddling across the Molokai Channel in a hurricane. Hopefully, he and fellow islanders will be able to ride this storm out without enduring too much pain and suffering.

—Pete Thomas

Photo: Diamond Head looms over beachgoers on Oahu. Tourism is down throughout Hawaii.

Credit: Lawrence K. Ho / Los Angeles Times

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