Gloomy forecast predicted for U.S. tourism industry

By Katherine Nichols
Advertiser Staff Writer

Hiroki Harada helps fiancŽe Tomomi Nagamachi find the perfect wedding dress at the Matzki Wedding Emporium. Harada and Nagamachi are getting married tomorrow. The average Japanese couple will spend about $3,500 on a wedding ceremony in the Islands and several thousands more on additional expenses during their stay. Eugene Tanner ð The Honolulu Advertiser

Losses to the nation's tourism industry since Sept. 11 are expected to continue to ripple throughout the country for the next 18 months, taking a $640 billion bite out of the economy and nearly 2 million jobs.

Douglas Baker, deputy assistant secretary for service industries, tourism and finance for the U.S. Department of Commerce, told Hawai'i tourism executives yesterday that while the hemorrhaging has slowed in recent months as travel has resumed, growth will be gradual, and international travel remains among the areas hardest-hit.

The national picture is somber news for Hawai'i as it struggles with its own slow tourism growth. While visitor arrivals have rebounded relatively strongly from the sharp drop late last year, international visitor arrivals to Hawai'i in January remained 28.8 percent below previous-year levels, according to Eugene Tian of the state Department of Business, Economic Development and Tourism.

Nationally, international travel to the United States, which had dropped 34 percent in October, has improved but was still off

20 percent in January, Baker said.

Still, Hawai'i tourism officials said the pace of recovery is steady and better than expected, offering hope for the state's $10-billion-a-year industry.

"From the beginning, our forecast was that we would not be back at 2000 levels until next year," said Pearl Imada Iboshi, the state's chief economist, referring to international arrivals. "But we expect to be pretty close on a monthly basis by the end of the year."

Iboshi also projected statewide job losses this year of less than 1 percent, with job growth returning next year.

"We have seen rapid improvement in the unemployment situation, and Hawai'i is doing much better than the nation as a whole," she said.

Still, the tourism-related sectors of hotels, transportation and retail are forecast to lose a combined 14,000 jobs by the end of next year, and income in those sectors is forecast to drop between 4 percent and 16 percent, according to the state economic agency.

Baker said yesterday that the U.S. government is making moves to improve tourism and international relations — with efforts such as the April agreement between the United States and Japan to increase tourism for both countries — but some Hawai'i experts said they were not impressed.

"I heard nothing new in terms of initiative," said Mark Hukill, interim associate dean at the University of Hawai'i's School of Travel Industry Management. "The fact of the matter is they have no policy for the majority of the industry."

Small and medium-sized businesses make up 98 percent of Hawai'i's tourism industry, said Hukill, adding that federal business-tax relief for those businesses is needed.

Hukill said he believes the government is focusing too much on international protocol, big business and increasing visitor numbers that would eventually come back on their own anyway.

"Yes we've got to bring the numbers back. But that's only part of the equation," he said. "In the meantime you can't let the rest of these things collapse."

Reach Katherine Nichols at knichols@honoluluadvertiser.com or 525-8093