Maui:
Miracle or Mirage?

A look at Maui's
economic boom under
Linda Lingle

By Gary T. Kubota
Star-Bulletin

WAILUKU - Randolph Coon's tour and car rental business has grown from 10 to 40 employees on Lanai in the past 10 years. He plans to vote for Maui Mayor Linda Lingle for governor.

Carpenter Justin Stevens says he's had difficulty finding steady work on Maui. He'll vote for Gov. Ben Cayetano.

Former Honolulu Mayor Frank Fasi, running in the Republican primary against Lingle, says Maui is in bad shape, with record foreclosures, bankruptcies and high unemployment.

There is some truth in each of their observations.

Maui County's economic growth has been a miracle for many in the visitor industry such as Coon, helping to make Lingle a front-runner in several election polls against Cayetano and Fasi.

But the miracle is more of a mirage for many like Stevens in agricultural and construction trades and on the economically depressed island of Molokai.

While the county is growing, not everyone has benefited.

In Maui County, more jobs has not translated into lower unemployment.

"Overall, the 'Maui miracle' is relative to the other islands. We haven't fallen as fast," said George Lee, president of the Maui Contractors Association.

Visitor industry officials say tourism in Maui County has been strong because it has relied upon niche marketing as a long-term strategy, developing high-end resorts with separate identities, such as Wailea, Kaanapali, Kapalua, and the latest addition, Lanai.

"Maui has succeeded because we've taken charge of our own destiny," said Marsha Wienert, executive director of the Maui Visitors Bureau. "We haven't relied upon someone else to do our marketing and fill our rooms."

Each resort has its own marketing arm promoting the sale of not only vacations, but also real estate.

The resorts contribute money to support the Maui Visitors Bureau which promotes tourism exclusively within the county.

On Maui, the number of hotel rooms has increased by 2,401 to 8,786 in the last eight years, with hotel occupancy rates continuing to be equal to or better than most Hawaii islands.

Maui also boasts the highest average room rate of $142 a day, compared to $108 for Oahu.

One of the most dramatic changes has taken place on Lanai, where the economy has shifted from pineapple production to tourism in the last 14 years.

Dole Food Co. has invested more than $570 million in developing Lanai as a visitor destination. It now employs some 1,100 people, compared to 464 during the waning years of pineapple production.

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The Lodge at Koele and the Manele Bay Hotel, each with a golf course, have become quiet retreats for the wealthy, including Microsoft billionaire William Gates.

While a number of residents have left Lanai, quite a few have returned after decades of living on the Mainland.

"It's nice to be back," said Moana Endres, who works as a supervisor for Trilogy Tours. "Because of the change, you have a lot of Lanai people coming back to retire or to work."

Coon, whose family started Trilogy Excursions 25 years ago, said one of the reasons why he is backing Lingle is her support for the activities industry.

"A lot of people are working on Maui to try to make things better. Mayor Lingle has been the catalyst for moving things in the direction they're going."

Stevens says he's voting for Cayetano because he pushed through a $1-billion capital improvement budget that will help the construction industry.

Maui economist Dick Mayer, a professor at Maui Community College who describes himself as a "liberal Democrat," says he doesn't believe politicians can take much credit for the Maui economy.

Mayer said more important factors influence it, such as the U.S. and Japanese economies and worldwide tourist competition.

"Maui's economy has been like an express train since the 1960s and Lingle has jumped aboard it," Mayer said.

Dole board Chairman David Murdock believes new leadership is required to make decisions that reduce unnecessary regulation.

Murdock, who declined to name who he'd prefer as governor, said developing a resort in Hawaii is too expensive and takes too long.

Murdock said the development on Lanai cost three times more and took three times longer than anticipated - more than $800 million if financing is included.

He said what takes a developer four to five years in Hawaii before breaking ground requires only 12 to 18 months in North Carolina, one of the fastest growing states in the nation.

"Hawaii is in its seventh year of decline with little prospect of recovery, unless things change dramatically," he said.

"No major corporation will move to Hawaii. They know of the untenable business environment that is created by the control of various bureaucracies."

Maui jobs
up 12 percent

Maui's economic statistics:

Leads the state in job growth, increasing by more than 12 percent to 57,150 in the eight years ending in 1997, according to state labor statistics.

Increased jobs in the service industry, including tourism, by 8,200 in Maui County to 51,400.

Has moderate unemployment rate - 7.2 percent in June, compared to Honolulu with 5.5 percent, the Big Island with 10.9, and Kauai with 10.6.

Lost 23 percent of jobs in agriculture by 23 percent to 1,950 jobs by nearly 34 percent of construction jobs to 1,950, state labor statistics show.

Increased number of homeowners in Maui County by 14 percent to 19,208 in the last four years.