1. UHERO RELEASED THE FOURTH QUARTER UPDATE TO ITS HAWAII FORECAST THIS MORNING. THE TITLE IS “HAWAII IN PAUSE MODE.” WHAT DO YOU MEAN BY THAT?
This is something we’ve been talking about for several months. After strong gains in tourism and to a lesser extent in employment in 2010, the state economy has moved mostly sideways since then. Arrivals and spending have been flat or slightly down for most of the months since January. Job gains have also stalled, with the unemployment rate moving back up to 6.4% in September.
2. HOW MUCH OF THIS IS DUE TO THE PROBLEMS WITH THE US AND GLOBAL ECONOMIES?
Certainly this has played a major role. As the US has struggled, mainland arrivals growth has stalled. Lack of job growth and debt concerns at home and abroad have undermined traveler confidence. Of course the Japanese earthquake was also a major disruption. High oil prices also raised travel costs.
3. ARE THERE BRIGHT SPOTS IN THE LOCAL ECONOMY?
Yes, some areas like professional and business services are growing jobs, and construction losses appear to have ended, at least on Oahu. Japanese arrivals are fully recovered from the earthquake now, and September actually showed surprising strength in most markets. Plus APEC will provide some lift this month.
WHAT ARE PROSPECTS FOR 2012?
Well, despite the weakness we have seen this year, we do expect limited improvement in 2012, both in the visitor industry and across the economy. But this will not be strong enough to rapidly bring down unemployment. And we are still worried about the potential for the European debt crisis and US Congressional inaction to tip the economy back into recession.
– Byron Gangnes
