UH economists see growth despite disasters

University of Hawaii economists are taking a wait-and-see approach before projecting the potential impact on tourism that the natural disasters had on Hawaii island and Kauai.

But any slowdown may be just temporary as robust economic conditions persist for the state’s four major counties and prospects remain good for continued growth, according to the University of Hawaii Economic Research Organization in a report due out today.

UHERO sees tourism gains across the board this year, with the neighbor islands poised to show the largest gains. UHERO is forecasting Big Island arrivals this year to jump 11.7 percent, Kauai arrivals to rise 10.7 percent, Maui arrivals to increase 7.4 percent and Honolulu arrivals to gain 4.3 percent.

“Tourism gains, facilitated by expanding airline service and the availability of alternative accommodations, keep surprising to the upside, even as the large visitor volume is straining local infrastructure and communities,” UHERO said.

“Construction activity remains at healthy levels, although generally well off mid-2000s peaks on the neighbor islands. Record- low unemployment rates will limit job growth in each county but bring welcome income gains. While an end to the current expansion is not yet in sight, Hawaii’s counties remain vulnerable to adverse developments both at home and beyond our shores.”

Among those adverse developments are the record flooding that saturated Kauai in April and the ongoing lava eruptions that began May 3 and continue to ravage the Big Island.

“There have been anecdotal reports that the Kauai floods have caused some visitor slowing beyond the directly affected areas, and that bookings for Big Island travel have taken a hit in recent weeks,” UHERO said. “However, available hard data do not yet show significant adverse impacts.”

UHERO said the Big Island’s expansion shows no sign of abating, although the hot volcanic activity might paradoxically cool things off for a while in the tourism industry.

”Growth in airline capacity is signaling more visitor growth on top of already big numbers, although the recent new eruptive phase of Kilauea poses an uncertain risk to arrivals numbers,” UHERO said.

Visitor arrivals to Hawaii island in April jumped 11.4 percent, according to data released Thursday by the Hawaii Tourism Authority. However, those numbers don’t take into account the lava eruptions that began last month on that island.

Kauai numbers, however, do take into account the flooding that caused landslides and shut down some roads and businesses. Despite the record rainfall, Kauai visitor arrivals increased 9.9 percent in April.

“Tourism has driven a strong Kauai expansion, supported by a surge in direct flights and home vacation rentals,” UHERO said. “While the April floods have caused hardship for residents and some disruption to the visitor industry, the Garden Isle remains poised for more growth.”

Likewise, UHERO also has a rosy outlook for Honolulu and Maui counties.

“The Honolulu County economy continues to grow, driven by the persistent strength in tourism,” UHERO said.

And UHERO said visitor arrivals to Maui County once again will set a record this year after last year surpassing their 2007 peak by more than 10 percent.

”Maui County is playing the same hot hand as the rest of the state,” UHERO said. “Visitor numbers keep heading higher and unemployment ever lower.”

Christine Donnelly is off. Kokua Line returns June 12.