Isles ‘falling short’
in tourism spending

An industry report says Hawaii
lags other destinations

By Russ Lynch
Star-Bulletin

The Hawaii government will spend less than 6 percent of its budget on expenses related to tourism this year, while the tourist industry is expected to generate 27 percent of the state's tax income, according to a new report.

The relatively small size of the government contribution compared to the income the industry generates suggests that Hawaii "is falling short of its competition for travel and tourism with the rest of the world," says the report prepared by a professional international study firm, the WEFA Group, for the World Travel & Tourism Council.

Travel and tourism activities are expected to generate $14 billion in economic activity in Hawaii this year, producing $1.9 billion in taxes, as the government spends $576 million to support the industry, said the report, which was released today.

Actual tourism promotion is a small part of the expenditure figure that WEFA uses. The group considers as travel and tourism-related expenses every dollar the state and county governments spend on anything related to the industry. That includes improvements to airports and other infrastructure, travel costs incurred by government employees, subsidies for museums and a range of other expenses.

On the income side, WEFA includes all income directly or indirectly related to travel and tourism.

Comparing Hawaii to other world destinations, the study said its results indicate "that government money invested in travel and tourism produces a far greater return in Hawaii than in the average country."

Looking ahead, the report is "noticeably more pessimistic about Hawaii travel and tourism than previous reports," said an introduction by Harvey Golub of American Express Co., the WTTC chairman, and Geoffrey H. Lipman, WTTC president.

By the report's measures, travel and tourism in Hawaii grew 0.8 percent last year and no growth is expected this year. The study expects Hawaii tourism growth to average a little more than 4 percent a year over the next 10 years while growth in other destinations that are similarly dependent on tourism will be between 5 and 6 percent a year.

Nevertheless, the study indicates that the industry's total economic contribution to the state's economy will more than double by 2010, to $28.7 billion.

It is the fourth time that the annual WTTC study has contained information specific to Hawaii, an extension made possible by a group of 50 local sponsors brought together by Outrigger Enterprises Chairman Richard R. Kelley .