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The Honolulu Advertiser
Posted on: Friday, June 23, 2006

Tourism: Industry pursuing big spenders rather than larger crowds

 •  How much is too much?

Advertiser Staff

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Today, nearly one out of every four jobs in Hawai'i depends on visitor spending, and tourism drives growth here. As people visit the Islands, they decide they like it, and they return to live or buy property, fueling both population growth and development.

As the tourism industry grows, the labor-intensive service industry exhausts the local labor supply, drawing new residents into the state to fill vacant jobs, said Karl Kim, chairman of the Department of Urban and Regional Planning at the University of Hawai'i-Manoa.

Hawai'i hosted a record 7.46 million tourists last year, and Honolulu city planners expect the O'ahu inventory of visitor units to expand from nearly 36,000 in 2004 to more than 50,000 in 2030.

The state recently released its Sustainable Tourism Study, which repeatedly points out that Hawai'i's 1.26 million year-round residents collectively account for far more environmental, traffic and other infrastructure impacts than the 170,000 or so tourists who are visiting on a given day.

Still, the report points to problems with unchecked tourism growth.

The state hired R.M. Towill Inc. to develop a computer model to see how Hawai'i tourism growth plays out, and Towill concluded economic quality-of-life conditions for residents "appear to be best" in the slowest of the three tourism growth scenarios studied.

The model predicted Hawai'i workers would actually see higher real wages in 2030 under the low-growth scenario than they would under mid-range or high-growth scenarios. That's because moderate or rapid growth would attract large numbers of workers from out of state, which the Towill model predicted would tend to suppress wages and increase the cost of living statewide.

Low growth was defined as more than doubling visitor expenditures by 2030, while high growth would more than triple visitor expenditures.

Since that study, events such as Hurricane Katrina spurred Hawai'i tourism growth, while fears such as the SARS scare and terrorism receded somewhat, Kim said.

City planners list about 7,000 new hotel, condo-hotel and timeshare units scheduled to be completed on O'ahu by 2013, not counting the five new hotels with 3,500 rooms planned for the area around the Turtle Bay Resort, or the new tower planned for the Hilton Hawaiian Village in Waikiki.

Hospitality Advisors last year offered a more modest projection of a net gain of 5,200 visitor units statewide by 2010, with much of that growth planned for the Neighbor Islands. It also doesn't include the Turtle Bay and Hilton Hawaiian Village projects.

Marsha Weinert, Gov. Linda Lingle's tourism liaison, said the industry understands the resources of the islands are finite, and the Hawai'i Tourism Strategic Plan is to grow by attracting big-spending visitors instead of larger crowds of tourists.

The plan is to "target and entice those visitors here who are willing to spend what it's going to take for us to have economic growth ... but not continue the paradigm of the past, which is basically mass marketing, more, more, more," she said.