Hawaii: Tourism Essentially Zero Under COVID-19, but Recovery Path Evident

Hawaii's tourism industry has ground to a halt under COVID-19, with almost all trans-Pacific flights to Hawaii canceled, the US CDC "no sail order" on all cruise ships extended through the end of July, and the state implementing strict measures to lockdown the islands. 

• Only 4,564 tourists visited Hawaii by air in April compared to a combined total of roughly 850,000 by air and cruise in April 2019.
• This dropoff corresponds to a 98.2 percent decrease in total visitor days year-on-year, a figure that essentially repeats nearly any way you slice it. For example, arrivals from Japan decreased by 99.5 percent, from other Asian countries, 99.4 percent, and so on.

While the abrupt, multi-month suspension of nearly all tourism has created economic stress, the data also illuminates the potential resiliency of this critical industry. The Coincident Economic Activity Index developed by the Federal Reserve Bank of Philadelphia—combining four state-level indicators to summarize current economic conditions in a single statistic—shows a nearly 55% decrease in economic activity in Hawaii between January and May with a slight recovery in June.

• Buried in the tourism statistics, the long-term nature of repeat tourists, spending a month or more at a time in the island paradise, speaks to the effective strategy of the real estate and time share industries that draw in large investment and tourism dollars. These visitors will be back as travel and the state reopens. In all likelihood, flash deals will also draw back first-timers, eager to reclaim lost vacation opportunities during COVID as well. 
• One question in this outlook, however, for Hawaii and other similar tourist destinations globally is how much of the support services and small businesses will withstand the COVID-period economic conditions to cater to tourists (and claim their dollars) when they do return?