The deadly August fires caused a sharp economic decline on Maui, but the state should be able to weather a downturn, according to the latest forecast from the University of Hawaiʻi Economic Research Organization.
"While Maui is incredibly important to the overall state visitor industry, as a share of the overall economy, it's just a little bit more than 10% of the state economy," UHERO Executive Director Carl Bonham said.
"We'll actually see a boost in overall economic activity, job growth and particularly construction activity."
Maui does have a significant share of tourists and UHERO expects the state’s overall tourism numbers to fall. But it also expects would-be visitors may change their destination from Maui to another island.
Additionally, government coffers will take a substantial hit. The state will lose out on an estimated $30 million in Transient Accommodation Tax and General Excise Tax revenue. Maui County will not collect an estimated $5 million in TAT and $10.5 million in property taxes.
The state Council on Revenues had earlier reduced its forecast for Fiscal Year 2024 to just 1.3% growth, down from its previous prediction of 4.0%.
Bonham did caution that there are many uncertainties. The state has announced an Oct. 8 reopening of West Maui — exactly two months after Lāhainā town burned — but it is unclear if visitor numbers will rebound. UHERO also doesn't expect visitors to return quickly.
Bonham said the opening signals to would-be visitors that they can travel for Thanksgiving and Christmas holidays. UHERO forecasts a slow recovery, with only half its usual amount of tourists from October through the end of the year.
Tourists supporting West Maui businesses would also help employment prospects for local residents.
“I understand that there's sensitivities and some in the community would like this to be postponed," Bonham said.
"But the fact of the matter is if the longer we postpone the return of visitors and visitor spending, the longer families are going to be without jobs, or with reduced hours, and dealing with that repercussion.”
Unemployment has soared, with about 11,000 claims for unemployment benefits have been filed, Bonham said.
Prior to the fires, the average visitor to Maui spent $270 a day. UHERO estimates Maui lost more than $13 million in visitor spending each day in the weeks following the fire.
Economists say the economy is likely to avoid its predicted recession, but further Fed rate increases could change that as global conditions have weakened, both in Europe and China.
To read the entire forecast, click here.
