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Kaua‘i economy should stay the course

LIHU‘E — A stout tourism industry should help keep the County of Kaua‘i economy on course through the rest of the year even if the nation falls into recession.

That was the upshot for the island of Kaua‘i in The Economic Research Organization at the University of Hawai‘i’s (UHERO) quarterly forecast for the state of Hawai‘i, which was released on Friday, May 12.

“As we mention in the report, Kaua‘i continues to be a very desirable location,” said Peter Fuleky, an economist with UHERO who was part of the team that worked on the forecast.

The popularity of the Garden Island as a destination is best reflected in the tourism numbers being put up this year. Visitor numbers are coming in at more than 100,000 per month.

That has the island on pace to welcome 1,396,600 total visitors by air for the 12-month period ending Dec. 31. That would be up 3.8 percent from the same period a year earlier, the forecast states.

The bulk of the visitors are from the United States, with that number forecast at 1,221,900 for the 12-month period ending Dec. 31. That would be up 1.2 percent from the same period a year ago. The remainder of the tourism numbers are from categories labeled in the forecast as “Other Visitors” and “Japanese Visitors.”

While the rise in visitors has led to more congestion on island roads, it has been good news for the local hotel industry.

“Across the islands, Kaua‘i is the only county with an occupancy rate higher than in 2019,” states the forecast, which was comparing March 2023 to the pre-pandemic March 2019. “Room rates on the Neighbor Islands raced past their pre-pandemic levels early in the recovery.”

Spending is also up, in part because of the noted surge in room rates in the same comparable periods.

“Real visitor spending in each of the Neighbor Islands far surpasses 2019 levels, with Kaua‘i and Maui seeing the strongest gains, up 12-13 (percent),” the forecast states.

But the forecast also cautions that a number of factors could weigh on the island economy, as well as the rest of the Hawaiian Islands going forward. Those factors range from a tighter credit environment and more bank failures to the direction of monetary policy set forth by the Federal Reserve.

Despite the downside risk, the forecast states Hawai‘i is “still likely to avoid an outright recession” even if the nation falls into recession later this year.


Wyatt Haupt Jr., editor, can be reached at 808-245-0457 or
Source: The Garden Island

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