Saturday, February 24, 2024
Hawai'i Free Press

Current Articles | Archives

Wednesday, July 12, 2023
35 Years of Stagnation: Tourism Income Flat Since 1988
By UHERO @ 4:36 PM :: 4536 Views :: Hawaii Statistics, Tourism

Hawaii’s long-term economic recovery after COVID-19

by Steven Bond-Smith, UHERO, July 6, 2023

The following is adapted from a speech I recently gave at the Western Regional Science Association meetings on the Big Island.

My research focuses on the implications of theoretical regional economic models for small and isolated places, like Hawaii. These are places where distance matters such that they are generally unable to access large local markets or other local sources of external scale economies. The term “external scale economies” refers to the productivity benefits of close proximity to large-scale economic activity. Because of the interaction between distance, scale, external economies, and the mobility of people and economic activity, small economies in isolated places have very different characteristics and require unique policies for economic development.

Short-term shocks and long-term declining productivity growth

It’s not just the pandemic. While COVID-19 is the biggest shock to tourism yet, the industry is periodically punctured by shocks: the 1991 recession, 9/11, the 2001 recession, and the Great Recession, all lead to sharp declines in tourist numbers and spending.

Figure1: Quarterly tourism data Hawaii, 1964-2022

Source: UHERO data portal
Notes: Real visitor spending adjusted for Urban Hawaii CPI.

It wasn’t always this way. For a long time, tourism in Hawaii experienced significant growth in both visitor numbers and expenditures. Technologies such as the jet engine, and a growing and increasingly wealthy middle class who wanted to vacation in Hawaii, made tourism a lucrative industry. This translated into substantially higher Real GDP per capita in Hawaii than in the rest of the United States.

But in recent decades visitor spending stopped growing while the number of tourists continued to increase. And for several decades now, the tourism industry has not contributed to growth in per capita GDP in the same way that it had in the past.

As a result, Hawaii has fallen dramatically behind the rest of the US in terms of per person income growth. The long run growth in Hawaii’s real GDP per capita has fallen from 1.9% prior to 1990 to 0.5% during the last three decades. US real GDP per capita annual growth has also fallen, but by much less, from 1.5%, to 1.1%. This means Hawaii went from a real per capita trend growth rate 0.5 percentage points higher than the US to 0.6 percentage points lower.

Figure 2: Quarterly real GDP per capita, Hawaii, 1964-2021

Source: UHERO data portal
Notes: Quarterly GDP per capita adjusted by Urban Hawaii CPI to 2021 dollars

After three decades of lagging growth Real GDP per capita in Hawaii has now fallen below the US. The COVID-19 pandemic has just exacerbated this long run trend in which Hawaii’s real GDP per capita has now fallen to 10% behind the US overall. If we were to account for regional price differences, Hawaii would be even further behind.

read … Full 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