Expert says Japanese may not return in full

By Timothy Hurley
Advertiser Maui County Bureau

KA'ANAPALI, Maui — Hawai'i's economy remains on track to recover from the effects of the terrorist attacks by this summer, but there's one sector that may never return to pre-Sept. 11 levels: international travel.

Paul Brewbaker, a top private forecaster and chief economist for Bank of Hawaii, said Japanese air carriers have made permanent structural changes in their operations to accommodate a reduced volume of travel to Hawai'i.

Although there has been recovery in the international travel sector, the number of foreign visitors has stalled at 85 percent of what it was before Sept. 11, said Brewbaker, who spoke yesterday to the Maui Chamber of Commerce at the Royal Lahaina Resort.

Don't look for many more international visitors than that, he said. With the Japanese economy not expected to grow anytime soon, and a widening currency exchange rate making Hawai'i more expensive, it appears international travel will top off at 90 to 95 percent of previous volumes, Brewbaker said.

While this is not particularly good news for Waikiki, his audience on Maui wasn't too shaken up about it. The Neighbor Islands in general, and Maui in particular, don't rely nearly as much on Japanese visitors to fill their hotels.

Brewbaker said visitor arrivals from the Mainland should be back to normal by June or so, just as he and other top economists predicted shortly after the terrorist attacks, based on the pattern of recovery that followed the Gulf War and other recent economic downers.

"We took our shot and now we're coming back,'' he said.

Although the summer will be comparable to 2001, when the economy was growing by 3 percent, and fall economic numbers will be "super'' compared with last year's sputtering post-9/11 performance, the overall forecast for 2002 will not be so rosy, the economist said.

Gains in the fall are not as significant as losses in the winter, when the tourism season is in full swing, he explained.