Maui County’s economic recovery trails rest of the state; construction builds momentum

Maui County’s economic recovery remains slower than other islands, particularly in tourism and employment, suggesting lingering effects from the August 2023 wildfires disaster that disrupted tourism and local businesses, according to the Department of Business, Economic Development and Tourism the 2025 Statistical and Economic Report, published in this first quarter.

In 2024, Maui visitor arrivals reached only 76.6% of 2019 levels, nearly 18 percentage points lower than the 94.5% recovery seen on O‘ahu and more than 21 percentage points lower than the 98% comeback on Hawaiʻi Island. Kaua‘i visitor arrivals were flat.

For the state overall, Hawaiʻi’s economy is projected to grow at a slower pace in 2025, with the state adjusting its gross domestic product growth forecast downward to 1.7%, 0.3 of a percentage point off of the previous 2% projection, the report says. The revision reflects a slowdown in tourism recovery, rising inflation for consumers and national and international economic uncertainties. Growth is expected to reach 2% in 2026 and stabilize at 1.8% by 2028.

“While the domestic and international economic outlook has become more uncertain, we expect Hawaiʻi’s economy to demonstrate resiliency,” DBEDT Director James Kunane Tokioka said. “We expect that the tourism industry will continue to recover in the next few years, even if at a slower pace than previously anticipated. With the income tax reform and the increase in the supply of affordable housing, we expect that living in our state will be more affordable and support our state’s workforce formation and retention.”

Maui County also faced higher unemployment claims than pre-pandemic levels. In 2024, the county’s weekly unemployment claims averaged 204, which is 42% higher than the 2019 level of 144. While the state overall saw labor market stability, Maui’s workforce continues to struggle.

Despite slower tourism recovery, construction is expected to fuel Hawaiʻi’s economy and could support Maui’s economic recovery. The value of approved building permits statewide increased 27.1% in 2024, and residential housing unit approvals went up 78.1%, the highest percentage increase in 17 years, state economists reported. Many construction projects, including hotel developments, are scheduled to break ground this year.

Statewide, more than 1,000 hotel units are under construction or scheduled to begin by 2026. Construction industry payroll jobs increased 9.2% in 2024 as compared with 2023.

Looking ahead, visitor arrivals are projected to increase by 1% in 2025 and will grow at a stable pace of around 2% each year between 2026 and 2028, state economists predict. Full recovery in arrivals will not happen until 2028 when 10.4 million visitors are projected to come to the state. Visitor spending is forecast to be $21.3 billion in 2025 and is expected to increase to $23.7 billion by 2028.

Of concern is a decline in airline seat availability, particularly from international markets. Air seats from Japan are expected to drop 5.5% in the first 10 months of 2025, while air seats from Canada will decrease 5.1%.

Honolulu’s consumer inflation rate hit 4.4% in 2024, 1.4 percentage points higher than the state’s inflation rate in 2023 and outpacing the national rate of 2.9%. Housing costs rose 7.1%, compared with 2023. While lower income tax bills and affordable housing initiatives are expected to ease some financial burdens, affordability remains a concern for residents across the state, including in Maui County.

Housing normally accounts for 50% of Honolulu consumer inflation.

Pacific Resource Partnership recently released its Winter 2024 edition of Hawai‘i Perspectives, a comprehensive survey capturing the voices of more than 900 residents across all four counties. It found that the high cost of living in Hawaiʻi continues to plague residents.

Among those polled, 88% believe the price they pay for goods in general has gotten worse while 81% believe the availability of affordable housing has also grown worse.