Latest UHERO Report says the “Delta Wave Swamped Tourism”

A combination of a surge in COVID cases, new restrictions and Governor David Ige’s request for visitors to delay Hawaiʻi vacations, all helped to deflate a summer surge of visitors according to the latest economic report from the University of Hawaiʻi.

The UH Economic Research Organization or UHERO, released its latest economic forecast for the state on Sept. 24, stating that, “record virus numbers and preventive policy responses have caused an abrupt tourism pullback.”

The economic decline continues even as delta COVID virus numbers fall, the report said.

“While the delta wave may now have turned the corner, we are in for a period of weakness before growth resumes late in the year… A full return to pre-pandemic conditions remains several years down the road.”

COVID cases involving the delta variant had been trending upwards during the summer months, resulting in Gov. Ige announcing on Aug. 23, 2021 that “it is not a good time” to visit Hawaiʻi. On that day there had been more than 9,300 confirmed COVID cases reported over a two week period.

Shortly after the Governor’s press conference hotels and resorts began to receive a number of cancellations. In Maui County there were 52,000 room night cancellations reported within two weeks.

The UHERO report state that “Until recently, Hawaiʻi had skirted the worst of the COVID-19 pandemic. But the Delta wave ended Hawaiʻi’s virus exceptionalism, and the state saw record new cases beginning in the second half of July.”

The report states that other factors affecting the economy include:

• Employers are still having trouble hiring workers despite the large number of job openings. “School and childcare closures, enhanced employment benefits and on-going virus concerns have discouraged re-employment.”
• International visitors “remained all but absent” due to travel remaining “difficult.”  Travelers from Japan for example, were required to complete a COID-19 test and a 14-day quarantine when they returned home.
• “Global supply chain bottlenecks are also acting as constraint on growth,” a reference to a backlog of cargo ships waiting to dock and unload on the mainland.

The UHERO report also points out that soon federal enhancements to unemployment and the eviction moratorium are both ending soon and that the “future path for the economy remains very uncertain, with risks tilted to the downside.”

The UHERO report is available at the following link: https://uhero.hawaii.edu/wp-content/uploads/2021/09/21Q3_Forecast.pdf.