Hawaii’s economy is expected to continue its stable growth track for the next few years.
In its final forecast of the year, the state Department of Business, Economic Development & Tourism said today that it is slightly revising upward its visitor arrival projection for 2016 and noted that labor market conditions improved through the first three quarters with civilian labor force, employment and payroll jobs setting historical high levels during that period.
DBEDT said that it now sees visitor arrivals for next year rising 1.7 percent to a record 8.81 million, up from its August projection of a 1.6 percent rise to 8.8 million. The state agency kept its forecast for visitor arrivals this year the same with a 4.3 percent forecast that would end 2015 with a record 8.66 million visitors.
However, DBEDT lowered its projected increase of visitor spending this year to 3.2 percent, from 3.8 percent, and now sees expenditures in 2015 to finish at a record $15.42 billion. For next year, DBEDT forecast a 3.5 percent rise in spending — the same as in its previous forecast — but given the lower spending forecast for 2015 now projects expenditures in 2016 to end up at $15.96 billion.
The state forecast visitor arrivals and spending to rise at least through 2018.
DBEDT said its report indicates a shift in the visitor market due to the weakening yen that contributed to Japanese arrivals declining by 1 percent through September of this year and spending by Japanese visitors plunging by 10.1 percent.
That was offset by visitor arrivals from the U.S. West market increasing 7.5 percent and visitor expenditures from this market rising 6.9 percent.
"We are pleased that Virgin America started a new daily flight from San Francisco to Honolulu on Nov. 2 and will start a new daily flight from San Francisco to Kahului on Dec. 3 this year" DBEDT Director Luis Salaveria said. "This will bring more West Coast visitors to our state and offset the decline in Japanese visitors. This news and the continued growth in our local job market are positive trends in our state’s economy."
Hawaii’s inflation-adjusted gross domestic product — the broadest measure of economic output — is now projected to end this year up 2 percent, slightly above the 1.9 percent previously projected. And for next year, DBEDT sees the state’s GDP rising 2.3 percent — the same as previously forecast.