Big Island economy
bouncing back

Direct Kona flights
and diversified ag are helping,
a new bank report says

By Rod Thompson
Star-Bulletin

HILO -- The Big Island had the best payroll growth in the state in the last 18 months due to long-distance flights to Kona and the growth of diversified agriculture, First Hawaiian Bank economist Leroy Laney says.

"In the last year and a half, Hawaii County has come back," Laney said.

Payroll growth last year was 1.7 percent and this year it has reached an annualized rate of 2 percent, he said.

That good news for the Big Island fits into a "somber" picture for the rest of the state, Laney says in his annual report on the Big Island to be presented to the Hilo business community today.

While the national economy continues "robust" expansion, Hawaii is the only state that has not participated, Laney said.

The state is not likely to match even the weak 0.9 percent growth of last year, he said.

But direct flights to Kona beginning in June 1996 brought the Big Island tourism traffic at levels it has never seen before, he said.

Laney credited the growth to the extension of the runway at Kona's Keahole Airport to accommodate overseas flights of wide-bodied jets.

He said also that Japanese visitors go through customs much faster at Keahole than Honolulu.

"It's amazing the difference a little airport infrastructure can make," he said.

The tourism growth came at Maui's expense, Laney said. The Big Island increased its share of neighbor island tourists from Asia by 9 percentage points, to 37 percent, while Maui's share dropped dropped the same amount to 48 percent.

The result was South Kohala hotel occupancy rates of 70 percent, the highest ever, he said.

This occurred even with the opening of the 380-room Four Seasons Resort Hualalai with its average $365 per night room rate.

Much of the Big Island job growth was in hiring by hotels, Laney said.

The other bright spot was diversified agriculture.

Farm jobs, including sugar, fell on the Big Island from 6,350 in 1992 to 4,850 in 1996 but have now climbed to 5,000 despite the loss last year of Kau Sugar jobs.

Immediately north of Hilo, C. Brewer leases 25,000 acres to independent farmers, he said.

Laney noted the growing importance of coffee and taro in Kau and exotic fruits in Hamakua. Papaya and eucalyptus plantations will have an increasing importance, he said.