[ OUR OPINION ]
Bad numbers cloud
Hawaii’s economic healthTRUST Seiji Naya to find a ray of sunshine in the cloudy skies that hover over Hawaii's tourism industry. In remarks about the dismal visitor arrival numbers in July, the director of the state Department of Business, Economic Development & Tourism points optimistically to the 6,000 children and adults who traveled to the islands for a soccer tournament as "positive exposure" to boost future tourism counts.
THE ISSUE Declines in tourism and related businesses still cut deep into Hawaii's economy.
His valid assessment aside, it appears the industry is still foundering, which does not bode well for Hawaii's tourism-dependent economy. Other gloomy tourism-related news further darkens the economic horizon.
Almost a year after the Sept. 11 terrorist attacks, the state has yet to regain its economic legs. DBEDT reports that the number of travelers to Hawaii last month dropped 5 percent from July 2001 and were down more than 7 percent so far this year. Particularly weak is the Japanese market, which has seen a 22 percent decrease, or about 35,000 fewer arrivals from the previous July. The drop negated the 6 percent increase in travelers from the West Coast.
The decline of Japanese arrivals has had a significant effect on DFS Hawaii, the duty-free retailer that brings in the most revenue for the state's airport system. DFS is $18 million behind in payments to the state from sales of goods and in rent payments for space at Honolulu Airport. DFS officials say "unprecedented business conditions," meaning the terrorist attacks, has reduced duty-free sales 31 percent from 2001 -- its lowest levels in 25 years -- and do not see recovery for another three to four years.
Concessions normally provide about two-thirds of the operating income for state airports and because security measures now allow only ticket-holders inside, retailers and restaurants have seen business declines. Other commercial users, meaning airlines, may have to make up the revenue differences, but airlines also are hurting.
Aloha reports that it lost $6.8 million in the second quarter for a total of $13. 9 million for the first half of the year. Hawaiian Air has lost almost $50 million so far this year. Meanwhile, the number of Japanese tourists has dropped so much that Japan Airlines has decided to cut its number of weekly flights from 75 to 68 until next March. The airline had been optimistic that travel would increase, but that hasn't happened.
All in all, the tourism outlook appears bleak -- at least for the time being. Naya's hopeful stance may prove correct in the long term; sporting events like the soccer games may draw new visitors to the islands. Movie and television productions, which have been on the upswing this year, also could give tourism a boost. How much help films provide for tourism is difficult to gauge, but exposure from "Lilo & Stitch" and current surfing hit, "Blue Crush," can't hurt.
Tourism is fickle business, the rises and falls following whimsical patterns. For the present, it appears Hawaii will have to hunker down for continued hard times.
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