Dr. Paul Brewbaker Offers Insight Into Hawai‘i’s Economy

Local economist Dr. Paul Brewbaker recently spoke at the Hawai‘i Tourism Wholesalers Association (HTWA). Marketing and Communications consultant Scott Foster, who was in attendance, has provided us with several key takeaways of his presentation:

• Tourism in Hawai‘i is smaller absolutely in economic size (constant-dollar export revenue) and is smaller relatively in value-added contribution (GDP share) than in 1989, although it has generally been recovering during the early-21st century from late-20th-century compression. Therefore, since 1989, tourism in Hawai‘i has not been a net contributor to economic growth.
• Real Hawai‘i tourism receipts in 2017 ($16.78 billion) were approximately $2 billion lower than in 1989 ($18.82 billion, in 2017 dollars). Meanwhile, numbers of Hawai‘i tourist arrivals have risen by almost 3 million during the same three decades, from 6.49 million in 1989 to 9.38 million in 2017. Total tourist days (arrivals times average stay length) have risen from 60 million to 83 million. Hawai‘i tourism’s physical footprint has expanded, but its real economic yield has not. “More visitors, not more dollars” is the outcome.
• At current rates of increase in the 2010s, real Hawai‘i tourism export receipts may match, by 2019, those in 1989, but thirty years will have passed without any incremental economic benefit from tourism while the external costs of physical tourism volumes will have grown large enough to seriously erode public favor in the meantime.
• Today, tourism in Hawai‘i is smaller absolutely in economic size (constant-dollar export revenue) and is smaller relatively in value-added contribution (GDP share) than in 1989, although it has generally been recovering during the early-21st century from late-20th-century compression. Therefore since 1989 tourism in Hawai‘i has not been a net contributor to economic growth.
• For decision-makers, increasing absolute amounts of public expenditure, policy attention, and an accumulation of negative externalities (congestion, natural resource degradation, cultural dilution) have slow-cooked a toxic political stew, undermining possibilities for reform. Yet, in competing destinations, policy alternatives offer insights both on managing tourism’s negative side-effects and on enhancing its economic benefits. Global mobility has only increased: building a wall is not an option.”
• Patterns of official denial and neglect have muddied the signal transmitted in tourism performance data, subverting public understanding of tourism’s nuances. For example, on the island of Oahu—comprising approximately half of Hawai‘i tourism—constant-dollar export receipts have not grown for the last five years (2012-2017). Yet, in Hawai‘i, officially, “every year is a record.”

More of Scott Foster’s recap can be found online.