Rough economy brings big bargains


POSTED: Friday, December 12, 2008

When gasoline prices were rising nonstop, Leo Ikehara began to drive his car until it was essentially running on fumes to delay that dreadful yet inevitable visit to the pump.

He would pull into a discount station, take out $40 and get about a half-tank in his Toyota sport utility vehicle.

But during a recent trip to Lex Brodie's gas station, Ikehara, a 44-year-old Board of Water Supply worker, had a pleasant surprise.

“;I came here, filled it up and actually got change back,”; he said. “;Price is almost cut in half.”;

From gasoline to airfare to hotel room rates and real estate, Hawaii residents and visitors are suddenly faced with bargains created by the economic slowdown.

Massive layoffs throughout the year caused worried consumers nationwide to cut back on spending to save up in case they, too, got the pink slip. And as demand for many goods dropped, so did prices.

In the summer, Honolulu motorists were paying as much as $4.39 on average for a gallon of regular unleaded gas.

“;At this juncture, people on Oahu are driving around finding $2 gallons of gas,”; said Bank of Hawaii chief economist Paul Brewbaker. “;It's a reminder that what goes up must come down.”;

For Kim Soares, 43, of Hawaii Kai, the recession created perfect market conditions for her to move out of her home of eight years and settle into a bigger one, on a lot twice as large and with a swimming pool.

She sold her original house, with four bedrooms and three baths, for $799,000 in May, making a profit because her husband, Jay, a contractor, had renovated it. While staying with her parents, Soares, a Realtor, noticed that a property that had been for sale for a year disappeared from the market. She tracked down the listing agent and asked whether the person was still interested in selling.

The deal on her new five-bedroom, three-bathroom house closed last month at $905,000. To afford the pricier home, Soares took advantage of low interest rates, which have been dropping to stimulate housing demand, locking hers at 5.75 percent, below her previous mortgage's 6.875 percent rate.

“;It was good timing,”; said Soares, the mother of a 14-year-old son and a daughter who turns 10 this month. “;Our goal was always to have a home that was comfortable to invite guests over. And with the kids growing up, pool parties are around the corner.”;

Although people should enjoy deals as the economy corrects itself, Brewbaker cautioned consumers not to overspend, noting the current financial crisis was largely triggered by homebuyers who were defaulting on loans. Also, just because things are getting cheaper, it does not mean people should abandon money-saving habits they may have adopted when prices were up, he said.

Sinking oil prices, meanwhile, have also allowed airline companies to drop fares as they try to fill seats. Visitors to Hawaii declined by 15 percent following the collapse of Aloha and ATA airlines earlier this year as round-trip fares from the mainland topped $800.

Just two weeks ago, Waipio resident Brian Devera spent $450 on a last-minute flight to New York City.

“;I was shocked. I was like, 'Wow, am I seeing things?'”; said Devera, 23, who left last Friday for 10 days in the Big Apple. He noted it cost him about the same to fly to the West Coast a year ago.

For Devera, a waiter at two restaurants, the steal came at a good time because he says he has been earning less money this year as fewer customers have been eating out where he works.

To make air travel to the islands more appealing - and get more tourists to local restaurants and retailers - the Hawaii Visitors and Convention Bureau has offered travel packages at below 2007 prices as part of a $4.5 million campaign. In August more than 20 isle hotel properties joined a half-off hotel room special through the Web site

Even with marketing incentives, Hawaii expects to welcome 700,000 fewer visitors this year compared with last year's 7 million, resulting in a projected loss of about $1 billion in visitor spending, said state tourism liaison Marsha Wienert. In 25 years in the industry, Wienert said, she cannot recall “;having this kind of room availability over the holiday.”;

“;That's why the value-added, best-time-ever-to-visit-Hawaii message is out there so strong right now,”; she said. “;The experience is still what you've dreamed about, but at a lot less than what you normally would pay.”;

» COMING SUNDAY IN TRAVEL: A sour economy makes this is an excellent time for kamaaina to take a neighbor island vacation rather than flying to the mainland or overseas.