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The plunge in tourism has resulted in soaring unemployment and home foreclosures, a shortened school year and an exodus from the state. Some residents blame the visiting President Obama.
A motorcade carrying the vacationing President Obama moves along a road on the east coast of Oahu on Tuesday. Hawaii officials hope the Obamas’ visit will help turn around a deep slump in tourism. (Chris Carlson / Associated Press / December 29, 2009)
Reporting from Kailua-Kona, Hawaii – Between dealing with terrorism threats and crises abroad, President Obama is unwinding in Hawaii with his family this week. They’ve snorkeled in pristine bays and dined in fashionable restaurants. Tourism officials only wish there were thousands more visitors like them.
Tourism is the glue that holds this island state’s finances together, keeping its streets clean, its workers paid and its children educated. But for the last two years, vacationers and conventioneers alike have abandoned Hawaii in favor of less exotic destinations closer to home. The result is an unprecedented slowdown in the industry and some cavernous cracks in the state’s budget.
Hawaii was so short of cash last year that it furloughed teachers and suspended school for 17 Fridays during the academic year, giving students the fewest school days of any state in the union. Home foreclosures and bankruptcy filings are soaring. The unemployment rate has more than doubled over the last two years to 7.0%. Though that’s well below the national average of 10.0%, it’s a stunner for a place that just a few years ago boasted a jobless rate of less than 3%.
For the first time in a decade, the number of Hawaiians receiving welfare benefits has increased. Crime is up on the island of Oahu this year, even as it fell nationwide. And as if things weren’t discouraging enough, an army of rats in Honolulu’s Chinatown is afflicting the already beleaguered restaurant trade.
It’s the “worst recession in our lifetimes,” said Marcus Oshiro, chairman of the state House Finance Committee.
The number of visitors to the islands in November fell 17% from 2007, and total spending by air visitors for the first 11 months of 2009 decreased $1.3 billion from the same period in 2008.
Tourism officials are hoping that the Obamas’ visit can begin to turn that around, with images of sugary beaches and 30-foot waves being beamed back to mainlanders.
“We believe that having images of Hawaii in the media — especially now when it’s 20 degrees below in some places — can only put the desire for a Hawaii vacation in future travelers’ minds,” said Marsha Wienert, tourism liaison for the state.
But some Aloha State natives are blaming Obama, a Hawaii native, for at least part of the slump. They say he didn’t do them any favors last year when he said firms receiving government bailouts shouldn’t be taking trips “to Las Vegas or go down to the Super Bowl.” He might as well have said Hawaii.
Lavish conventions and corporate junkets have come under fire since it was revealed that troubled insurer American International Group Inc. spent $443,000 at the St. Regis Resort in Dana Point just days after accepting an $85-billion federal bailout. The backlash has cost luxury destinations such as Hawaii a bundle. More than 100 corporations and associations scrapped Hawaiian conferences or business retreats after Obama’s comments, according to Hawaii’s Department of Business, Economic Development and Tourism.
“We’re losing the group business that’s either canceled due to economic reasons or concerns about being seen as a company going to Hawaii,” said Keith Vieira, senior vice president and director of operations for Starwood Hotels & Resorts in Hawaii and French Polynesia.
Some Hawaiians are underwhelmed by the return of their native son. In the scruffy town of Wahiawa on Oahu, far from the beaches and fancy hotels, some locals waiting by a pawnshop for the bus were decidedly ambivalent about the president.
“It’s not good here — there are no jobs,” said Hu Toelupe, who said she didn’t expect to see the president and didn’t care if she missed him.
The drop in jobs has especially hurt Hawaii’s Big Island, which traditionally feels a slowdown first and recovers last as opposed to Oahu, the most populated island, said Joseph Toy, president of Hawaii tourism research firm Hospitality Advisors. In November, hotel occupancy on the Big Island was a meager 40%, he said.
Occupancy at hotels on the Big Island and Kauai fell to 54% from 72% and to 60% from 78%, respectively, over the last three years, says TZ Economics, a local research firm. The drop in hotel revenue exceeds $1 billion across the state, according to some estimates.
On a recent sunny afternoon at Uncle Billy’s Kona Bay Hotel on the Big Island, only cats scurried around the manicured grounds. The balconies and outdoor restaurant were deserted. A lone woman sat smoking by the circular pool.
Across the street at the Kona Inn Shopping Village, a jewelry store, tour operator and an arcade called the Fun Factory were all closed, padlocks on their doors.
“It’s never been this slow in 25 years,” said Patrick McFeeley, a photographer who owns the Picture Store, which sells photos of giant waves, lava flows, palm trees and other iconic Hawaiian images from a shop overlooking the sea.
There’s hardly a tourist spot on the planet that hasn’t been hurt by the global slowdown. But Hawaii has proved particularly vulnerable. Situated 2,900 miles off the West Coast, it’s dependent on air travelers and cruise ship passengers at a time when many nervous consumers are contenting themselves with “staycations.”
The tourism decline here accelerated in early 2008, as the U.S. economy faltered and employers axed tens of thousands of workers. Suddenly, a tropical vacation became an unthinkable luxury to many consumers. In April of that year, Aloha Airlines and ATA Airlines closed, cutting the number of airplane seats coming to Hawaii by 15%, said Wienert, the tourism liaison. Then two cruise lines redeployed ships to other ports of call.
“We’ve gone through two years of huge declines in our tourism industry, which has resulted in huge declines in revenue for Hawaii business and government,” Wienert said.
A number of ritzy hotels are in foreclosure or have changed hands because of financial difficulties. Shops around the upscale areas are feeling the slowdown too.
“Usually at Christmastime, you couldn’t walk through the mall, it was so crowded,” said Dion DeBois, who works at a jewelry store at the upmarket Kings’ Shops at Waikoloa Village, about 30 miles north of Kailua-Kona. “Now, nobody’s traveling,” he said, glancing outside, where a man with a guitar sang to a row of empty plastic chairs.
That’s made Hawaii, which is trying to close a $1.2-billion budget shortfall, eager to find new sources of income. Green power is at the top of the list, said Russell Pang, a spokesman for Gov. Linda Lingle. The state has pledged to obtain 70% of its energy from renewable sources by 2030. It’s trying to lure entrepreneurs to make the state a hotbed of clean technology and homegrown power.
And many here are thrilled that a consortium of universities has chosen Hawaii as the site for the world’s biggest telescope, which could spawn construction and research jobs.
But there’s nothing on the horizon to replace tourism any time soon. Even though signs are emerging that more Americans will start traveling again in 2010, some Hawaiians are giving up on paradise for good. In 2009, more residents left Hawaii than moved here for the first time in a decade, according to census data.
Sonia Grimme, co-owner of Surf and Sand, a beachwear shop on the Big Island, is thinking about moving back to her native Taiwan with her husband and 12-year-old son. She’s worried that her son isn’t getting the education he needs in Hawaii; he now stays home and plays video games on furlough Fridays.
“The system is broken here,” she said. “He can get a much better education in Taiwan.”
January 2nd, 2010 at 7:10 AM
HAWAII FEELS THE PINCH
Welcome to America and a reality check out there in Hawaii. If you thought that your little paradise state there (being clear out in the middle of the Pacific – nowhere even close to Mainland USA shores) was not vulnerable to the same failed GOP economic mess left behind by the last 2 GOP idiots bush/cheney then guess again.
Look where you are located first, and then ask yourself realistically why that is. You’re an island state for Pete’s sake – completely surrounded by the Pacific Ocean lying 1000’s of miles offshore from the closest landmass – having to depend on everything to be either shipped in, or flown in there!
THAT COST MONEY! Lots of money! Whose money – your money! Not mine, as I don’t vacation there just because of the sheer high cost to get there for one, and then once there that same high cost for everything else there that I would otherwise enjoy. Is it any wonder why everything cost so much there? I think the answer is quite obvious.
And then you ask why your economic state there is in as bad a state as it’s in as of late? Is it any wonder why? It ain’t any better here in the states either, so don’t think that you are the only ones hurting out there. It’s everywhere!
If we hadn’t had those 2 war mongering $GOP$ idiots bush/cheney in office – that unfortunately we had the past 8 years prior to Obama – things would be a hell of a lot more STABLE right now economic wise – at the very least. Not only here in the USA, but worldwide! And that’s just without all the “gouged for capitalistic profit” real estate garbage that went on for years, and then all the banking/lending fraud that went with it, and all the added Bernie Madoff type Ponzi scams, etc etc etc.
Useless GOP driven wars like that started by the whole bush driven family (cheney and all his war monger clonies included) DO NOT solve any economic problems at home at all much like the GOPS would have you believe every time they get back into power! Follow recent history by enlightening your brain reading wise, and you’ll see that you can’t even argue that point anymore!
I think that much is a given looking back now at how they first sucked us all in with yet another useless war that only FLEECHED the POOR to no end, and then gave it all to the RICH!
Just like that of an idiotic comment that was left at another blog type webpage where some Pro GOP looney dipstick mouthed off that Obama’s newly elected Administration was worse then that of Jimmy Carter’s. When I see poor Jimmy still being blamed for everything bad that the last 2 GOP idiots bush/cheney left behind screwed up it just makes me sick that there are still some STUPID SOB GOPS still out there that can’t get over the true facts and all the great things Jimmy Carter did for this country, both while he was in office and also while behind the scenes – even to this very day!
If the braindead GOPS had it their way they would blame WWII on Jimmy Carter as well. If they could!
Wars only ADD to more economic problems – as we all painfully now have seen. All they ever do is VACUUM SUCK the living daylights out of any once stable economy by taking every last penny from everyone’s pocket just to fuel 2 worthless wars the likes of what this country has going at present, and still is QUAGMIRED in to this very day.
Reason why I say this is because look at your economic situation there in Hawaii, and then look at the very same situation everywhere else, and you see it’s a no brainer!
And while you’re at it – why blame Obama for the mess the whole world is in – not only our little USA slice of that economic mess, but everyone elses as well.
I guess when you look back on Vietnam, and esp what Robert McNamara had to say about us learning (or not learning as the case may be) from our mistakes in that lost war quagmire in his book titled “IN RETROSPECT” – I guess we really haven’t learned a damn thing about wars at all. Read the book and see what I mean!
If it were up to me, and I was the President (God forbid that would ever happen – as you couldn’t pay me enough to shoot myself for that job) the first thing I would have done to save people from losing their homes to foreclosure would haven been to devaluate all USA properties bought & sold in those last 8 bush/cheney years by at least 25% of their REAL value, and not their INFLATED values. SCREW THE BANKS! Let the banks eat it – as they were the bastards that caused all that GREED pain to begin with. If any USA bank then wanted to declare bankruptcy then their assets would have been seized and taken over by the FEDS – NO BONES! At the same time I would have likewise dropped all RENTS in the USA by at least 25% so again good hard working people would not be homeless and left on the streets like they are present day! At the same time I would have inacted a Congressional Bill that fixed ALL RENTS across the board to a modest 3% yearly increase at best based on the actual CPI figures of that in the USA. Right now the RENT situation in the USA is the worst I’ve ever seen it – as related to PURE GREED by those same property owners that got the government bailouts, but yet they continue to sick it to the POOR people just trying to stay alive. Pretty pathetic if you ask me!
Food for thought people!
January 6th, 2010 at 10:03 PM
im picking who to root for based on entrance music tonight..
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With Banner or link?
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http://www.onlineuniversalwork.com
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