The credit crunch, housing crisis and overall downturn in the global economy will continue to be felt in Hawaii this year as companies cut their work forces, housing prices continue their slump and travelers remain skittish about long-haul leisure trips.

Tourism

Hawaii's tourism industry, which saw its visitor count fall by 10.2 percent through November, will be hit with the full force of cuts from its tourism special fund in 2009, slashing programs and events designed to promote the islands.

With 2009 already being reported as the year of the “;naycation,”; where more people opt to forgo traveling, it may be an even tougher year for the state's leading industry.

Even Canadian visitors, who benefited from a weakening U.S. dollar earlier last year, will be unable to offset other shortfalls, including fewer visitors from Japan, and the loss of two Hawaii home-ported NCL America cruise ships along with fewer stops from foreign-flagged ships.

Economy

Significant recovery in real income growth isn't expected until 2010, while the number of jobs is expected to continue to decline through this year as companies trim their work forces or shut down altogether. Hawaii bankruptcy cases, which were up about 50 percent in 2008 from 2007, are also expected to continue through this year.

The bright spots: With a fragile economy expected throughout 2009, gasoline prices are not expected to reach the highs seen last year and isle inflation is forecast to ease through 2011. Retailers are expected to continue markdowns as shoppers focus on necessities.

Meanwhile, Target is slated to open its two Oahu stores in March 2009, creating up to 1,200 jobs, while its Kona store is set to open in July, with 400 positions.

Housing market

Hawaii has been lucky, but it won't be immune to a housing slump that has swept the country.

The demand for housing sales on Oahu slumped to its lowest in a decade late last year as credit markets tightened and the economy sagged, while foreclosures continued to skyrocket. The neighbor islands haven't fared much better, with a free fall of single-family home sales on the Big Island, Maui and Kauai.

However, sagging isle prices have been more stable than many mainland markets affected by the subprime lending meltdown, and real estate experts are hopeful that the slowdown will be of short-term duration in Hawaii as rates on 30-year mortgages continue to fall to record lows.

Interisland Traveling

Choppy waters have continued for the Hawaii Superferry, which has been wrought with political and legal concerns since starting service in late 2007.

The Superferry faces another challenge this year from the Hawaii Supreme Court, which is considering whether the state allowed the ship's operators to skirt environmental laws. A ruling could affect whether the Superferry can continue its operations.

Mokulele Airlines will need to boost passenger numbers this year to stay afloat in a competitive interisland airline market. The carrier already has canceled flights on a routine basis since its startup of jet service in November with mainland carrier Republic Airways. And with lagging tourism numbers and increased competition from an expanding Hawaiian Airlines fleet, it will have to fight to weather the storm.

The carrier also must resolve two court cases with partner Mesa Air Group, which operates interisland carrier go!.

Mesa, meanwhile, is hopeful of rebranding its go! aircraft with the Aloha name after settling a lawsuit in late November with Yucaipa Cos., the former controlling shareholder of Aloha that acquired Aloha's intellectual property rights as well as Aloha's predatory pricing lawsuit against Mesa. Mesa obtained the licensing rights to assume the Aloha name as part of the settlement, but a federal Bankruptcy Court judge last month postponed until February his decision on whether to approve the name transfer.