Thursday, March 28, 2024
Hawai'i Free Press

Current Articles | Archives

Friday, February 15, 2013
UHERO: Weakening Japanese Yen Will Cap Tourism Growth
By Selected News Articles @ 2:11 PM :: 6761 Views :: Economy, Tourism

Expansion Shifts Into Higher Gear

2012 marked a transition to healthier growth. Room for rapid tourism gains is now limited, but other sectors will pick up the pace.

UHERO State Forecast Update, Public Summary February 15, 2013 (excerpts)

… Japan has experienced two consecutive quarters of real GDP decline, with the likelihood that the fourth quarter will also come in negative. Japanese Prime Minister Abe has proposed a new set of expansionary policies to fight the prolonged deflationary conditions, and the Bank of Japan has signaled a commitment to further expansion toward that end. It is too soon to tell whether policy makers will carry through on this commitment; past efforts to deal with deflation have been short lived and ineffective….  We expect the US economy to expand by 2.2% this year, while Japan manages just 0.2% growth.

Despite an exceptionally mediocre global economic environment, the Hawaii visitor industry had a phenomenal year in 2012. Total arrivals grew by more than 9%, exceeding their previous 2006 peak by more than 300,000 visitors. Expenditures rocketed upward more than 18%. This surge reflected both the higher visitor census and also higher hotel room rates, which were 7.7% higher than in the first three quarters of 2011. Statewide occupancy rates approached 77%, their highest level since 2006.

Tourism activity was strong across all major market areas. Arrivals from the US mainland and from Canada posted healthy gains of 5.5% and 4.3% respectively. The quick recovery of Japanese arrivals after the great Tohoku earthquake in 2011 turned into a more sustained expansion, climbing 17% in 2012.  The number of visitors from Japan is now within sight of levels seen in the mid-2000s. Air carriers have optimistically boosted scheduled seats from Japan, although in our view yen depreciation and higher room rates will act to limit further Japanese market gains.

Non-traditional markets—that is markets other than Japan, Canada and the US—continue to flourish with greater than 20% arrivals growth in 2012. Notable has been the steadily rising market share of Asia and Oceania. The total number of arrivals from China and Korea grew 40% (an increase of 34,000 and 44,000 visitors respectively). Arrivals from Australia increased by over 30%, an additional 64,000 visitors. And these visitors are big spenders: expenditures by visitors from non-traditional markets grew an astounding 50% last year….

Based on planned air capacity and other early indications, we expect another impressive year for Hawaii tourism in 2013, if off last year’s blistering pace. But we are now entering the final phase of what has been an exceptional period of recovery and expansion.  With occupancy rates averaging near 85% on Oahu in 2012, industry capacity constraints will begin to bite over the next few years. Room rates and other costs will rise, deterring some potential visitors, and growth in new markets will crowd out visitors from others.  After 6.5% expansion in arrivals in 2013, we expect a tapering of growth to 2.1% in 2014 and 1.5% in 2015….

Private building permits were up a robust 42%, but more than one-half of this surge was still driven by additions and alterations, which in turn owe a significant fraction of their strength to photovoltaic system installation. Residential building permits grew by more than 20%, and commercial and industrial permits declined by 5%….

Of course the other factor that will drive construction on Oahu is Honolulu Rail Transit. The project has been on hold….

Before we turn to aggregate  measures of Hawaii activity, some consideration of state finances is in order. The State Council on Revenues expects General Fund tax revenues to grow by 5.1% in fiscal year 2013, and by 6.8% in fiscal 2014. Pointing to recent positive budget balances in his state of the state address, Governor Abercrombie proposed new discretionary spending, including a modernization of the state’s technology infrastructure, creation of a preschool program, and increased funding for senior care programs. He also proposed to start funding the state’s unfunded pension and health care liabilities, requesting an allocation of $100 million in 2014 and $105.5 million in 2015 for this purpose. The Governor also floated the idea of raising additional revenue from a further increase in the transient accommodation tax from 9.25% to 11.25% sometime in the second half of the decade. These tax and spending measures, along with possible modifications of the state’s tax credits for photovoltaic installations, will be key areas of debate during the current legislative session….

Growth will ease somewhat over the next two years, as a tapering off of visitor industry gains offsets expansion in construction and continued recovery in public sector employment…..

read … The Entire Report

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT