Deeper downturn seen for tourism

Economists at the University of Hawaii are now forecasting "a long and deep downturn for the Hawaii visitor industry," which, along with other bad news, will affect the Neighbor Islands even more severely than Oahu.

The latest estimate by the University of Hawaii Economic Research Organization is slightly more pessimistic than the annual report made in March, but UHERO now thinks "it will take many years for Hawaii visitor numbers to recover to their previous peak because of anemic U.S. consumer spending and the lost interisland cruise ships, which we do not expect to return any time soon."

The report released today looks at each county, while the annual report concentrated on the state as a whole. "The biggest damage is occurring on the Neighbor Islands," it says.

This is because the Neighbor Islands were relatively more dependent on tourism.

While Oahu can expect the total of jobs to decline by " 'only' 2.5 percent," UHERO expects food service and lodging jobs to drop by 6 percent in Maui County and Kauai County, and by 9 percent in Hawaii County.

UHERO thinks the falloff in visitors will stabilize later this year, but will see only modest recovery in 2010-11.

Construction, the other major job creator on the Neighbor Islands, is seeing the biggest declines in Hawaii and Maui counties.

At a hearing at the Maui Planning Commission on Tuesday, Willy Grieg, business agent of Local 3 of the Operating Engineers Union, said 75 percent of his members were on the bench, the worst situation ever.

UHERO thinks Maui will see the biggest fall in construction jobs in the state by the end of this year, 18 percent.

The only sector still expanding, if slowly, is health care and social assistance. UHERO forecasts overall job losses in Maui County this year will total 4.4 percent, the highest in the state.

Real income (adjusted for inflation) should decline 3 percent to 4 percent on the Neighbor Islands, 1.6 percent on Oahu.

Looming over the estimates is the uncertain impact of swine flu. The experience with the Severe Acute Respiratory Syndrome, or SARS, epidemic shows that a contagion scare in Asia can be sharply felt in Hawaii.

"It is too soon to make any reasonable estimate" about that, UHERO says.

* Harry Eagar can be reached at heagar@mauinews.com.