Hawaii’s already slowing economy may be “hard hit” this year as the state grapples with coronavirus travel concerns, the Economic Research Organization at the University of Hawaii said in an economic forecast released today.

“Hawaii’s economy has been on an expected slowing trend for the past several years. While visitor arrivals racked up another record year in 2019, real visitor spending fell last year as international spending languished.

“And now the coronavirus rears its ugly head. That represents a considerable — if as yet uncertain — risk to Hawaii’s economy in the year to come,” the UHERO report said.

It’s early yet, but assuming the coronavirus follows a similar path to the 2003 SARS outbreak, UHERO estimates that its overall impact to Hawaii tourism could “reduce total arrivals by about 230,000 visitors in the first half of the year, recovering fully by the third quarter.”

Hawaii visitor industry and government officials haven’t been sounding the alarm on the new coronavirus, which they say has had little impact so far on the state’s tourism-driven economy. They are quick to point out that only about 94,000 visitors from China came to Hawaii last year, comprising less than 1% of the state’s 10.4 million arrivals.

No one in the state has been tested for coronavirus as officials wait for kits from the Centers for Disease Control and Prevention.

Mufi Hannemann, president and CEO of the Hawaii Lodging and Tourism Association, said, “We still think it’s a bit early to make those kind of predictions.”

Still, the spread of the coronavirus has resulted in growing global unrest. Worldwide, more than 79,000 cases have been recorded since the virus began. While some 77,150 of the cases have been in mainland China, more than 1,500 have been confirmed in 29 other countries.

Most of the cases outside of China are in Japan, but over the weekend there was a major spike in cases from South Korea, increasing worry that a pandemic cannot be averted.

The Associated Press reports that 2,592 people have died of COVID-19 in China and more than two dozen in other countries.

While it’s true that Hawaii has limited direct exposure to the Chinese tourist market, that might not offer much protection from negative tourism impacts. After all, Hawaii could see shortfalls from a number of countries that have imposed coronavirus containment- related travel restrictions.

Spooked travelers, who choose to postpone or cancel vacations, also could have an effect on visitor arrivals to Hawaii.

“We may also see a temporary decline in the number of visitors from other emerging markets and from Japan,” the report said.

The UHERO report cited a recent Travel Weekly survey that said “about half of surveyed US travel agents have seen a decline in forward bookings due to COVID-19, although domestic destinations were perceived to be safer.”

In mid-February, Hawaii’s seasonally adjusted passenger count from Japan was down nearly 10% compared with a strong January, the UHERO report said. Passengers coming to Hawaii from other emerging markets also were off 20% compared with January counts, the report said.

UHERO also raised “specific concern” about the identification of a Japanese national and his wife who tested positive upon their return to Japan from a Hawaii vacation.

“Since the outbreak was only recognized gradually and the cancellation of booked flights is costly, the economic impact may ramp up over time, ” the UHERO report said.

Hiroyuki “Keith” Kitagawa, president and CEO of JTB Hawaii, said regarding the Japanese market, the impact for Hawaii has been less when compared with other destinations.

“We have had some cancellations, but most of these are planning to reschedule their trips for later in the year. The feedback we are receiving from our customers is that Hawaii is still seen as a fairly safe travel destination,” Kitagawa said.

Jerry Gibson, vice president of Turtle Bay Resort, said Hawaii hotels had a strong January, but all hotels are closely following the path of the coronavirus, which comes at a time when expectations for the rest of the year already weren’t as robust given global economic challenges and the U.S. election.

“In the next 90 days, I would expect that we would know what kind of effect this virus will have had on us,” Gibson said.

Hannemann acknowledged that Hawaii tourism has seen some cornonavirus-related cancellations, but said “they’ve been minor,” adding, “So far, it’s been nothing that alarms us, and it’s nowhere near where SARS was a few years ago.”

UHERO’s economic scenario for the coronavirus assumes a similar path to the 2003 SARS outbreak, which in Hawaii caused a “temporary 25% decline in the number of visitors from non-primary markets, and a dramatic 40% drop in Japanese visitors, while US arrivals were rising steadily.”

UHERO said the SARS trough in international arrivals to Hawaii came about six months after the first SARS diagnosis, and visitor levels had rebounded by the end of the year.

They expect the cornonavirus to cause arrivals from Japan to Hawaii to “bottom out in the second quarter, nearly 30% below year-earlier level,” but “fully recover by the first quarter in 2021.”

UHERO estimates the viral contagion will cause the number of visitors from nontraditional markets, including China, to “take a 15% hit in the second quarter, and begin a gradual recovery thereafter.”

It expects arrivals from the U.S. will remain close to the base-line forecast, with potential losses offset “by visitors choosing Hawaii over more exposed Asian destinations.”

“The domestic market right now is our bread and butter,” Hannemann said.