An economist predicts more visitors, but says the construction sector will remain stagnant
POSTED: 01:30 a.m. HST, Sep 23, 2010
Kauai's economic recovery is poised to gain momentum this year, helped by additional direct flights from the mainland bringing in more tourist dollars, one of the state's leading economists said yesterday.
Alaska Airline's direct service from Oakland and San Jose, Calif., means that Lihue Airport now has more nonstop flights than ever before, said Leroy Laney, a professor of economics and finance at Hawaii Pacific University.
And more help will come in December when Canada's WestJet returns with seasonal service to Lihue from Vancouver, Laney said yesterday at the 36th Annual Kauai County Business Outlook forum sponsored by First Hawaiian Bank.
Kauai's visitor arrivals rose 6.4 percent in July, while spending increased by 22.2 percent. For the first seven months of the year, 567,848 visitors traveled to the Garden Isle, up 2 percent from the same period a year earlier. They spent $641 million, up 7.4 percent from the same months in 2009.
Those numbers are a marked improvement from 2009 when arrivals fell 9.6 percent and spending dropped by 9.8 percent.
"Kauai's tourism economy in 2010 is definitely showing signs of life," Laney said in prepared remarks.
"After a disastrous performance last year, those gains are not hard to achieve. But we are coming up from that bottom," he said.
Laney attributed some of the visitor industry rebound to beefed-up marketing. The $1 million contributed by the Kauai County government for tourism promotion "has helped over the past year and will continue to assist," Laney said. Kauai also had some good exposure from three Hollywood films that recently wrapped up on the island: Fox-Searchlight's "Descendants," starring George Clooney; "Just Go With It," starring Jennifer Aniston and Adam Sandler; and Disney's "Pirates of the Caribbean: On Stranger Tides," starring Johnny Depp.
Kauai's economy is not getting much help from the construction industry, "which is mostly in the doldrums," Laney said.
On the residential side, there are just a few single-family homes being built, and no multifamily projects. What little construction activity is mostly government work, much of which is being funded by $14 million in federal stimulus funds.
Like on other islands, real estate sales have surged on Kauai after a moderate decline in 2009, Laney said. The decline in median prices so far this year has been much smaller than last year, he added.
There are several positive developments in the agricultural sector, including county-funded upgrades for local slaughterhouses, which will allow ranchers to expand production of mainly grass-fed beef for local consumption.
In addition, the seed corn industry continues to expand operations on land owned by Grove Farms and Gay & Robinson.
"This effort keeps former sugar lands in agriculture and will employ some ex-sugar workers," Laney said.