Visitor Stats Decrease Most on Big Island Due to Kīlauea Eruption

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Over the past year, there has been a broad slowing of growth across the four counties in the State of Hawai‘i, according to a May 17, 2019, report by UHERO, the economic research organization at the University of Hawai‘i.

To varying degrees, each county has seen a falloff in tourism activity and a slowing of employment growth in a number of sectors.

UHERO’s near-term outlook for all counties remains muted, reflecting limits to growth in a still-tight labor market, restrained tourism prospects and a mature construction expansion.

On the Big Island, visitor arrivals and spending dropped back more than the other Hawaiian Island due to the Kīlauea eruption in mid-2018.


According to the report’s executive summary:

• The visitor industry got off to a strong start last year, facilitated by a surge in airline seats, particularly to the Neighbor Islands. Arrivals hit a plateau mid-year, and visitor spending dropped back somewhat. While slowing was seen statewide, the Kīlauea eruption caused a larger setback on the Big Island. An uptick in arrivals is expected statewide in coming months, but visitor growth will generally trend lower than in the past, given a weak external environment, high tourism costs, and capacity constraints.

• County employment levels have also flattened out, in tourism-related areas but more broadly, as well. Unemployment rates have risen from recent lows, but labor markets remain tight by historical standards. Labor force growth has been held back by a marked slowing of population growth and a transitory decline on O‘ahu. Combined with weaker demand, this will limit employment gains going forward. Population and job growth will continue to be somewhat stronger on the Neighbor Islands than on O‘ahu.


• Personal income represents perhaps the best summary measure of economic growth in the Islands. Rates of income growth were strongest in the 2014-15 period and have backed off since then as demand has eased and job growth has slowed. Real Income growth will remain modest over the next several years.

• Construction activity has pulled back a bit in most counties, although it remains at a healthy level. A pipeline of public-sector, resort and residential projects will maintain industry activity near current levels for the next several years. UHERO will have an in-depth analysis of the sector in its third quarter.

• While all counties have experienced slowing over the past year, their underlying economic health remains largely intact. The generalized slowing does, however, leave them more vulnerable to adverse shocks, whether arising locally or in the global economy. At the same time, a slower pace of growth provides breathing space in counties that have struggled to absorb the impact of sustained growth on resources and communities.


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