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Tourism Levels Likely To Remain Depressed Well Into 2021

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Kalakaua Avenue in Waikiki. The heart of Hawaii's tourism industry has been largely empty for months.

One of the state’s top economists predicts that the number of visitors coming to Hawaii is likely to remain well below pre-pandemic levels for at least the next year. 

More than 10 million tourists visited Hawaii in 2019. That works out to an average of roughly 830,000 per month.

But these days, the flow of visitors that drives the local economy has slowed to a trickle. July saw just 22,562 visitors coming to Hawaii, compared to 995,210 in the same month of 2019. Those low levels are likely to persist for at least the next several months, according to Carl Bonham, executive director of the University of Hawaii Economic Research Organization.

During a Wednesday meeting of the Council on Revenues, Bonham predicted that Hawaii would likely not see visitor arrivals reach levels greater than 40% to 50% of pre-pandemic volume before summer 2021.

The Council on Revenues is the state body that predicts future tax receipts. The group issued another pessimistic collection forecast, the latest in a string of downward assessments

The drop in revenue largely stems from the decline in visitor arrivals, currently hovering around 10 percent of previous levels. Bonham says that number will increase very slowly until a vaccine for COVID-19 is widely available, something he assumes will not happen until the second half of 2021.

However, tourism could return much sooner if a vaccine is ready sooner than that or if Hawaii can contain the ongoing outbreak. Bonham noted that current hotel bookings for the all-important end of year holiday season are currently at 40% to 50% of last year’s levels.

“There is demand out there. The airlines are prepared to bring the flights back and the demand exists,” Bonham said to fellow councilmembers.

However, he also noted that measure was subject to quick change. Hotel bookings previously shot up for September, when state leaders announced back in June they would be relaxing the mandatory travel quarantine. That move has since been delayed until October and will likely be pushed back even further.

Hawaii is currently seeing one of the worst economic performances in the country and Bonham says reversing that will depend on controlling the virus.

“This requires that we manage the virus. We can’t repeat the shutdown,” he urged, saying that another lockdown would be “devastating” for local businesses. 

Survey data from UHERO indicates that local small businesses are holding on, in the hope that tourism will start to return this winter.

If that does not happen, many are likely to close permanently.

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