Hawaii tourism vulnerable as ever to events, Brewbaker says
Residential construction in Hawaii will peak this year or it may already have peaked last year, said Bank of Hawaii chief economist Paul Brewbaker. And the picture for the visitor industry isn't as rosy as many think, either.
"This year we will build fewer houses than in 1941," he told an audience yesterday at the Hawaii Publishers Association's Print Media Day expo at Hilton Hawaiian Village.
His chart of residential construction, based on building permits, projected that Oahu may see 2,400 homes built this year, and that the statewide total could be over 9,300. However, he doubts that the reality will match the projections, because construction during the second half of the year will not meet first-half levels.
As for construction on the neighbor islands, "they're hitting the wall like crash-test dummies."
Brewbaker also sounded notes of caution for the visitor industry.
Brewbaker reviews visitor arrivals and other numbers and trends after "scrubbing" them with forecasting formulas, and he charts them over long periods of time. One chart shows the visitor count going down, not growing.
"Braddah, das pretty bad, you know," he said, adding that it's a little different from "what a great year we're having."
"There is no question that some parts of the (tourism) industry are really going off," he said. With the loss of hotel rooms to condominium-hotel and timeshare conversion, hotel room rates have gone up. "The last 12 months have been killer for hotels."
But the "hard-core nerd part" of Brewbaker's figures showed Hawaii's tourism industry more vulnerable than ever to volatility. Events such as 9/11, SARS, rain, flooding and sewage overflows in Waikiki cause dramatic downturns in visitor arrivals, "and here we are, waiting for the next whack," Brewbaker said.
John Monahan, president and chief executive officer of the Hawaii Visitors and Convention Bureau, agreed with Brewbaker on a number of issues, he said.
"We are at a crossroads in Hawaii tourism," he said. "We clearly have a situation, with the lack of hotel inventory" and infrastructure problems that need to be addressed.
Nevertheless, Monahan said, there still is growth potential.
The HVCB must "replace some of our visitors with those who will get out and do things," meaning, spend money.
The Hawaii visitor bureau's dream visitors, to whom it directs most of its marketing efforts, are wedding and honeymoon travelers, arts and culture travelers, golfers and business travelers, who are big spenders like visitors from Japan.
Those targets also include avid travelers and outdoor and recreational travelers, Monahan said.