University of Hawaiʻi economists are forecasting a slowdown on Kauaʻi in 2026.
The tourism industry accounts for about a third of Kauaʻi’s economy, and up to 95% of Kauaʻi’s visitors come from the U.S. continent
Steven Bond-Smith with the University of Hawaiʻi Economic Research Organization told the Kauaʻi County Council at a briefing in mid-December that factors like inflation and tariffs are dampening domestic consumers’ outlook, which may make them less likely to visit Kauaʻi on vacation.
Bond-Smith and his colleagues are anticipating a mild recession on Kauaʻi and for the rest of the state in the first half of 2026.
But Bond-Smith told Kauaʻi council members that a lot of people "may not notice that the economy is in a recession."
"The pain is not equally spread across everybody. For most people, it's steady as she goes," he said.
He added that students graduating during this period and entering the workforce and people who have recently lost jobs will bear the brunt of the downturn.
UHERO forecasts a recovery to begin in the second half of 2026, but Bond-Smith cautioned that it would be slow.
