The University of Hawaii think tank UHERO predicts that a mild recession in Hawaii will take place, followed by a weak recovery starting in 2026.

The University of Hawaii Economic Research Organization, in its quarterly release Friday, noted Oahu has experienced notable declines in tourism, while Maui is continuing its gradual recovery from the 2023 wildfires.

According to the study, year-to-date changes in the visitor census ranged from a 2% decline on Oahu to a nearly 5% gain in Maui County. But the gain is still lower than visitor activity before the Lahaina wildfire.

UHERO said tourism in Hawaii has been soft this year, with international markets remaining weak. The study said the state has been running nearly 10% lower in the number of visitors from Canada compared with 2024.

“It definitely has gone down, especially because of the tariffs affecting businesses,” said Naomi Cooper, deputy director of the Maui Hotel & Lodging Association. “Overall, Maui is still recovering.”

Cooper said visitor spending has increased on Maui, but businesses may not necessarily be making money because operating costs have gone up as well. She said the overall change in the economy has affected middle-class visitors.

“It’s hard to say how it will specifically affect Maui,” she said.

UHERO said this year’s mainland market performance reflects a U.S. economy that has held up longer than expected. But the weakening labor market, poor consumer sentiment and stagnant income growth will cause a drop in U.S. visitors in 2026, UHERO predicts.

“On the flip side, the ongoing Maui recovery will produce a gradual return of visitors and spending,” the report adds.

Maui Chamber of Commerce President Pamela Tumpap said while construction businesses on Maui are doing well, most visitor-related businesses are still suffering and in need of financial help.

She said the chamber is concerned about the loss of The Sentry golf tournament in Kapalua this year and efforts to move the Maui Invitational basketball tournament to Las Vegas. She said she hopes to see Lahaina Harbor operating again because so many businesses relied on activity generated there.

“Those are critical things we still have to progress on,” Tumpap said.