Experts: Pandemic wiped out 8 years of economic growth in Hawaii
HONOLULU, Hawaii (HawaiiNewsNow) - It’s no secret that the relaunch of Hawaii’s visitor industry is integral to the state’s financial recovery and eventual growth, but it’s even more critical when considering the state’s economy has already taken an unprecedented hit.
According to Carl Bonham, the executive director of the University of Hawaii Economic Research Organization, Hawaii experienced a 42% drop in growth domestic product, which measures the size of the economy and economic growth.
Not only is that decline among the worst in the nation, Bonham says there’s also no historical comparison.
“We’re all the way back at a level of GDP from 2012, so we’ve essentially wiped out about eight years of economic growth," said Bonham, who also sits on Hawaii’s House Select Committee on COVID-19.
"And you can’t, from the 1960s on, you don’t have any drops that size.”
As the state moves toward the start of its pre-testing program, UHERO’s forecasts show that it’ll take years for tourism numbers to recover even under the best of circumstances ― meaning, hypothetically, no shutdowns or surges in cases.
“Out in 2024, 2025, we are at about the same level of visitors as we had in early 2017, and that comes about for a variety of reasons,” Bonham said.
“Some people will choose not to travel for a long period of time even with a vaccine, even with treatment for the disease, but also because of the economic damage that’s been done globally.”
As Hawaii starts to welcome back tourists, Bonham doesn’t anticipate a large initial influx, partly due to the state’s delayed response on establishing testing protocol.
The head of the Hawaii Tourism Authority also anticipates an adjustment period, especially for the hotel industry.
“Certain businesses will remain closed during this time,” said HTA president and CEO John De Fries.
“Some of them have advanced their renovations to move it up from 2022 to 2021 and fill this opportunity here. These are choices that each of these hotels and business enterprises are free to make.
"However, we are assured that there will be enough of an inventory to deal with the amount of traffic that’s anticipated between Oct. 15 and the holiday season at year end,” De Fries added.
In addition to a slow recovery for visitor travel, Bonham anticipates it could take until 2023 or 24 for unemployment numbers to drop below 5% again.
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