Hawaii is undergoing its worst recession since it became a state fifty years ago. The state's reliance on tourism has made it vulnerable to severe economic downturns, as consumers cut back on traveling and vacations. The Wall Street Journal reports:
Two years ago, there seemed no end to Hawaii tourism, said Marcus Oshiro, finance chairman of the Hawaii House of Representatives. "And now we're begging and offering free meals and free lessons trying to get them to come here."
Tourism officials say several factors have kept sightseers away. Two major airlines and two cruise ships stopped operating in the Aloha State, reducing options for visitors. High fuel prices last summer deterred travel. Then recessions in Japan and the U.S., as well as California's economic meltdown, slowed the flow of tourists.
Hawaii's image also was slammed by news of the H1N1 virus. Japanese visitors in April were poised to lead a tourism rebound, as arrivals from the Asian country were up 8.8% in the month compared with a year ago. Then the new swine flu broke out and May arrivals dropped 15.5% from 2008. David Uchiyama, vice president of tourism marketing at the Hawaii Tourism Authority, said Japanese tourists, who account for a fifth of Hawaii's visitors, "were just concerned about the how contagious it could be."
Georgina Kawamura, the state's budget and finance director, said, "We were victims, if you want to call it, of more global and national actions."
The tourism slump has slammed the state government, which saw tax revenue plummet 10% compared with fiscal year 2008. That forced lawmakers to close a $2 billion shortfall in a two-year, $11 billion general fund in the spring by slashing spending and slightly raising taxes.
Tourists, on the other hand, are extremely happy. Traveling to Hawaii has never been more affordable. Airline tickets and hotels are much less expensive than they have been in recent years.
