Hawai‘i Tourism in Search of the Promised Land

James Mak, Briefs, Economy, Tourism


By Paul Brewbaker, Frank Haas and James Mak

Public pressure has been mounting on the Hawai‘i Tourism Authority (HTA) to shift its focus from mainly marketing to destination management to mitigate tourism’s negative impacts on the community. HTA’s 2020-2025 Strategic Plan states that “This is the first strategic plan developed while HTA is re-balancing our attention from mainly marketing to greater emphasis on destination management.” In the past, HTA responded to community concerns about tourism’s negative impacts only on “an informal basis.”

5 thoughts on “Hawai‘i Tourism in Search of the Promised Land”

  1. Very insightful piece. I suppose there has always been some degree of negative local sentiment about visitors. But I wonder if this growing antipathy for tourism is in some degree actually disaffection with the performance of government? My very informal impression is that parks and highways and such generally are no better maintained than decades ago, despite large increases in tax revenues. I thought the tourist accommodation tax (and other government revenues) should have supported some of the investment and improved maintenance necessary to accommodate residents and tourists…?

    1. One of the striking observations I wish I could illustrate here is that twenty years of surveys of resident attitudes towards tourism (not at regular frequencies but instructive nevertheless) seem only superficially to be inversely correlated with measures of Hawaii tourism volume like visitor arrivals and visitor days (arrivals time stay length). Resident attitudes towards Hawaii tourism during the late-2010s declined by larger amounts, and steadily, whether or not tourism was up or down. Pre-pandemic resident attitudes declined. Post-pandemic, with zero tourism, resident attitudes declined even more! Following the return of tourism, with non-pharmaceutical interventions and then vaccines, resident attitudes still declined. Maybe the surveys are reflecting Hawaii management and governance failures in tourism and everything else. Formally, maybe the causality doesn’t run from tourism towards resident attitudes, but from something that is “tourism-orthogonal” towards attitudes. It could be MAGA or tribalism: “go home haole.” More broadly, it could be that things people in Hawaii expected from government weren’t produced: rules of the game maximizing the public’s interest; public goods; correcting externalities. The last time I taught introductory economics (the Cretaceous Era) these three were the entire list. (Income distribution was optional; less now that it’s so kapakahi.) To be fair, these also are among roots of MAGA; failures of government to fulfill public expectations. Perhaps tourism in the metaverse can’t happen soon enough. But either way, reducing tourism cuts off Hawaii’s nose to spite its face. Better destination management and tourism governance remain feasible. Hawaii is not alone as a destination seeking improvement, but there remains much to be learned from elsewhere other than Less Is More. Another thought: Hawaii real GDP derailed in 2017 from its shared 2010s economic growth trajectory with U.S. real GDP, pre- and post-pandemic. After five years, by mid-2022, Hawaii real GDP was 15-20 percent below its potential. Coincidence? Completely ignored electoral issue? Voldemort, whose name we do not utter? All of the above?

  2. James Roumasset

    There was always a de facto principle of destination management in Hawaii. If you shove the tourists into Waikiki and Hanauma Bay, the argument went, what we used to call the “haole effect” (congestion and negative cultural annoyances) gets incrementally smaller as more tourists are added. David Starrett formalized this view in his “Fundamental Nonconvexities in the Theory of Externalities.” The problem is that said nonconvexities are limited. Eventually the negative spillover effect increases at the margin. There is only so much you can do to increase capacity (including dynamiting Hanauma). When the nonconvexity disappears, you can develop new destinations (e.g. Lahaina and Kaanapali etc.). But to the extent that you pick the best destinations first (just as resources are extracted according to extraction costs), even this source of productivity growth runs out. This is the theory of Fundamental Limits to Fundamental Nonconvexities.
    So the idea of an optimal number of tourists becomes quite plausible. But inasmuch as said theory has only been followed in a haphazard manner, there are likely still to be unexploited opportunities to grow tourism in a welfare enhancing manner.

    1. Thanks Jim. We had an earlier co-author who debated whether convexities existed. I was inclined to think that recreational congestion, not to mention its more widely-perceived roadway variant, was a convexity that invited mitigation. The reason I had suggested much earlier in the so-called overtourism debate (unfortunate if not unintentional branding which presupposes that the solution to the problem is less of it) that we contemplate deployment of smartphone apps, scanning, AI, even drone technology. This is literally what I meant by destination management. For example, in lieu of more DLNR enforcement ociffers, simply live-stream kapu watershed violators on YouTube and in perpetuity in The Cloud. Almost everybody has a smartphone, certainly recreationists in their Lululemon leggings with their Camelbak hydration systems exploiting public resources for Instagram do. Every new vehicle has GPS and can be scanned at 80 mph. The joke was, as I posed to a couple local tourism conferences, “Google Maps has a bar chart telling me how many users are on the trail every hour of every day, only DLNR doesn’t have an app.” Actually, DLNR only needs a portal for private booking apps, not its own app. Dynamic pricing–what Uber calls surge pricing–not only could modulate utilization to tamp down the convex costs of resource congestion or degradation, it would signal to prospective private providers of recreational activity opportunity to enter a market created by NOT charging a zero price, as Hawaii does now. (Does Disneyland?) No dynamiting of Hanauma Bay required. Think “Kuoloa Ranch.” To your ultimate point: manage down the spillovers innovatively and Hawaii can increase tourism export revenue (and income and jobs for the politicians) while raising social welfare instead of reducing it. Note that not all users are tourists, but all users eventually generate convexity. This isn’t actually about tourism destination management, per se, not exclusively. Hence the coordination and collaboration problem of governance. HTA-cum-DBEDT, DLNR, DOT, etc., the acronyms all have kuleana: do they know their boundaries and how to collaborate across them? Unclear. Consider Aloha Stadium, or whatever it is this week.

  3. Interesting. I believe the creation of HTA has been a positive one. We long needed a central agency to help pull everyone together in Destination Mgmt and marketing. It gave those long trying to manage the industry a way to access the complicated government systems of who manages what. We have looked and spoken with other destinations about how they do things.
    USA Right to Travel creates challenges in management that other intl destinations do not always have to deal with. I think Hawaii’s solve will be as unique as we are a destination and will come/is already coming from our own community and existing committed partnerships between government and private agencies. I hope that if the study is done, we remember to also look in the mirror for answers. ʻAʻohe pau ka ʻike i ka hālau hoʻokahi-not all knowledge comes from one school.

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