Kaua'i tourism sector leads post-9/11 recovery

By Jan TenBruggencate
Advertiser Kaua'i Bureau

LIHU'E, Kaua'i — After digging out of a nearly decade-long post-hurricane recession, Kaua'i handled the post-terrorism recession pretty well.

Leroy Laney, First Hawaiian Bank economics consultant, said the structure of the island's tourism economy — and less dependence on international visitors than other counties — enabled Kaua'i to do considerably better than the rest of the state after the terrorist attacks.

"The main reason for the resiliency of the Kaua'i economy was the fact that its tourism sector was not hit as hard as the rest of the state, due to Kaua'i's greater dependence on Mainland visitors, especially condo and time-share owners," he said.

Laney presented his annual First Hawaiian Bank Economic Outlook Forum last night at the Sheraton Kaua'i Resort.

Job growth had slowed during early 2001, but showed little further weakness after the terrorism attacks, he said.

"While tourism jobs suffered, job growth actually accelerated in construction, finance, real estate, health and other services categories," he said.

Among strong spots in the economy are a film industry that saw 60 projects last year, bringing in $11.4 million.

Construction and home sales were strong, aided by low interest rates, Laney said.

For agriculture, the picture is mixed. He said it's a bigger part of the island's economy than it is on other islands, but sugar is down to one plantation, and some diversified crops are under pressure from rising costs.

"Kaua'i Coffee has improved its product by using a new roaster. Seatech's aquaculture effort appears to be rallying. Kaua'i's papaya crop still has export potential. And there are hopes that range-fed beef may become a near-term user of former sugar land," he said.

Tourism is likely to remain the island's primary economic engine, and Laney issued a warning that the Lihu'e Airport is near capacity, which could limit further growth in the visitor industry.