Great article on Kauai Tourism by Coco Zickos

17 Jun Great article on Kauai Tourism by Coco Zickos

This article was in the Garden Island Newspaper and is very interesting so I just thought I would include it in my blog.  It is written by Coco Zickos and is part of a series of articles about tourism on Kauai.

LIHU‘E — Economic recovery is officially knocking on Kaua‘i’s front door, according to the University of Hawai‘i Economic Research Organization’s county economic forecast released Friday. But the rehabilitation process will be slow and “will take a number of years to return to relative economic health,” especially on the Neighbor Islands, states the report’s author.

Because of Kaua‘i’s strong dependence on tourism — particularly from the Western U.S. states where the housing collapse and recession hit the hardest — the industry’s slowdown demonstrated a “huge hit” on the island, said UH Economics Professor Byron Gangnes.

The departure of some cruise ships and a reliance on visitors from the “ground zero for the financial crisis” will mean there will be only a “gradual” return of visitors, the report says.

One particular “sharp drop” in arrivals happened in the spring of 2008 after “airline failures” like Aloha Airlines, Gangnes said. However, by the summer and fall of 2008, airline seats were “no longer the big problem.”

“It was the severe recession that was taking hold on the U.S. Mainland and in Japan,” he said. “Even if there had been lift (seats available), there was no demand for travel at that point.”

“It was the perfect storm for not only the U.S. and Hawai‘i’s economy, but for the entire world,” said county Office of Economic Development Director George Costa regarding the economic upheaval in the visitor industry.

But visitor arrivals “have stabilized and will gradually improve as growth strengthens in major tourism markets,” UHERO’s report says.

And Kaua‘i gained “so many” visitors in 2006 and 2007 that even though their arrivals declined the greatest compared to the other main Hawaiian islands, the “net affect” — though not scientific — determines the island to have “netted the lowest decline in visitor arrivals” over Maui and the Big Island, according to Costa.

For example, arrivals in 2007 on Kaua‘i increased by 8 percent, while Maui rose almost 2 percent and the Big Island increased around 1.5 percent, he said.

By 2008, Kaua‘i had dropped nearly 21 percent, Maui around 16 percent and the Big Island some 19 percent.

But the net effect showed Kaua‘i experiencing a loss of only around 1 percent, compared to Maui at almost 14 percent and the Big Island at 17 percent.

In addition, during 2009, the island’s visitor arrivals rose by around 10 percent, whereas Maui increased approximately 9 percent and the Big Island some 7 percent. The statistics still left Kaua‘i with the lowest overall loss, he said.

This is projected to continue through 2010 where arrivals will likely increase some 6 percent, leaving Kaua‘i with a “net affect” of nearly 15 percent, Maui around 16 percent and the Big Island some 20 percent.

And, currently, Kaua‘i “benefits” from direct flights from the Mainland with Delta, United Airlines, American Airlines, U.S. Airways and Alaska Airlines, Costa said.

Stimulus needed to ‘slow bleeding’

As far as the $1 million visitor-industry stimulus plan is concerned, “with double-digit losses in 2008, we (Kaua‘i) needed to do something to help slow down the bleeding,” he said.

If Kaua‘i had not applied for the funding, the island “could have suffered a 20-to-30-percent drop in visitor arrivals,” said Kaua‘i Visitors Bureau Executive Director Sue Kanoho.

While it cannot be determined precisely where Kaua‘i would have been without the financial boost, “we know anecdotally that it had some positive effect,” Gangnes said.

In fact, those positive numbers were reported at a recent County Council meeting and were reportedly tracked and compiled by the KVB, hotels and wholesalers, Kanoho said.

The county’s stimulus funding and Hawai‘i Tourism Authority’s “blitz” funding “gave Kaua‘i such a leg up that I know it made a difference in our numbers,” she said.

“The problem, of course, is we don’t know what the outcome would have been in the absence of the program,” Gangnes said. “Same problem we have figuring out how much the U.S. economy benefited from the federal stimulus programs.”

KVB does not have any plans to ask for another $1 million stimulus package, Kanoho said, even though “the funding provided was very important to propping us up during a critical time.”

“We are starting to see signs of recovery and are hopeful summer 2010 will provide us the support we need for arrivals to Kaua‘i,” she said. “We are not out of the woods yet, but we do see a light at the end of the tunnel and feel the spiral downward is slowing.”

KVB typically acquires an average of $145,000 each year to “promote” the island from the county, in comparison to Maui County which provides $3 million annually, Costa said.

• Coco Zickos, business and environmental writer, can be reached at 245-3681 (ext. 251) or czickos@kauaipubco.com.