Grim forecast for Hawaii economy - Hawaii News Now - KGMB and KHNL

Grim forecast for Hawaii economy

Carl Bonham Carl Bonham
tony Denton tony Denton
Ikaika Salangsang Ikaika Salangsang

By Leland Kim - bio | email

WAIKIKI (KHNL) - The economic slowdown continues to pound on Hawaii tourism. Fewer people are visiting, down 17 percent from a year ago, and they're spending much less while they're here, according to a report released by the Hawaii Department of Business, Economic Development and Tourism (DBEDT) Friday. Is there an end in sight and what does this mean for Hawaii's overall economy?

It doesn't look good at least for the short term for Waikiki or the rest of the state. To put this in perspective, visitors spent 18 percent less than a year ago. That translates to 207 million dollars that's not going into our local economy. So, the near future doesn't look too bright.

Waikiki has slowly turned into a ghost town.

"We noticed Waikiki's a lot less crowded this trip," said Tony Denton, a visitor from Des Moines, Iowa. "Other times, it's been really crowded and nice and packed, but here, there's a lot of room to move."

He is visiting with his sons. Denton says the housing market back home is almost as fragile as the sand castles he's making with his son.

"A lot of houses on our street are for sale," he said. "There's seven in maybe 300 yards for sale in the $300,000 to $1 million range."

Blame the U.S. economy.

"The financial markets have frozen up," said Carl Bonham, an economics professor with the University of Hawaii at Manoa. "People are not getting loans. Banks can't borrow money. Interest rates for loans between banks have skyrocketed."

Bonham says there isn't much good news on the horizon.

"It's getting worse and the direct implication for Hawaii, the most direct is through the visitor industry," he said.

It impacts folks like Ikaika Salangsang, a Waikiki surf instructor.

"Right now, the beach is dead," said Salangsang, who was grew up in Waikiki. "Sometimes I stay here all day. I don't even get in the water."

Normally these surfboards would be in the water ridden by folks wanting to learn how to surf, but the slowdown means fewer lessons and fewer dollars into the local economy.

"That's why I'm trying to find another job, a steady job," said Salangsang. "Tourism isn't working anymore. It's going downhill."

Tourism is down in three key sectors, according to DBEDT. Visitors from the western U.S. states are down 24 percent from a year ago. Eastern states dropped 17 percent, and Japan is also lower, down 14 percent.

This means Waikiki hotels and other businesses will be forced to make some tough decisions.

"So that implies that many of these businesses that have been suffering with higher costs from energy and a reduction in sales, will be shutting down and they will be laying off workers," said Bonham.

Bad news for folks visiting and those who live here.

"I hope it goes back to normal," said Salangsang. "Tourists start coming back again, could teach them surfing. Everybody could get back to their daily lives."

In spite of all this gloom and doom, there is some good news. Tourism from Canada is up nine percent. That's because the Canadian dollar is still pretty strong against the American dollar.

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