Maui employment lags even as tourism returns
Visitor ‘bounce back’ better than other islands, economist says
Maui County is forecast to see more of a rebound in tourism than the rest of the state this year, but employment numbers will not follow at the same pace, according to an economist with the University of Hawaii.
Carl Bonham said Thursday that visitor arrivals are already looking up for Maui, and with vaccines rolling out on the Mainland, where most Maui visitors come from, more tourists could be heading for the Valley Isle. Oahu, by contrast, sees more international visitors, and with the international vaccine rollout slower than the U.S. in places like Japan and Korea, Oahu will probably not see as robust a visitor uptick, said Bonham, executive director of the University of Hawaii Economic Research Organization and an economics professor at UH.
“Maui is a premier destination. All of Hawaii is a premier destination, but Maui does have a special status,” Bonham said. “It’s always done a really good job at maintaining its image . . . . There is pent-up demand for that. Yes, we think Maui will bounce back stronger than the other islands and get closer to a full recovery of tourism than any other island, in a shorter period of time.”
According to the UHERO’s quarterly forecast, out today, full tourism recovery is “still several years out.”
But the report notes that U.S. tourism will pick up speed approaching the summer and fall as case counts fall and vaccination rates rise. In its baseline forecast, UHERO predicts visitor arrivals will recover half their pandemic losses by July, and visitor spending will recover nearly 70 percent of its losses by year’s end.
However, business failures and economic damage to lower-income households will continue to pose challenges, and full recovery to pre-pandemic employment remains several years down the road.
“Exceptional uncertainty continues to surround our forecasts for Hawaii,” the report said.
Bonham said Maui County’s visitor numbers this year will be around 110 percent higher than in 2020, doubling from last year.
No other counties are expected to see visitor
numbers double this year over 2020, according to the report. After Maui County, Hawaii County is predicted to see close to an 89 percent increase in visitors this year over last.
But Maui’s popularity as a destination also comes with costs; when travel ground to a halt last year, Maui’s visitor numbers and visitor industry-related sectors suffered a bigger downfall than other places. Bonham said that Maui County is the most dependent on tourism, followed closely by Kauai.
The report predicts around 1.7 million visitors will make their way to Maui County by air this year, up from around 832,000 last year but still below the 3.1 million visitors who came in 2019.
Maui County is not likely to reach pre-pandemic visitor numbers within the next couple of years, with 2.6 million visitors expected in 2022 and around 2.9 million visitors in 2023.
Maui island suffered the highest unemployment early on in the pandemic, going from about 2 percent in March 2020 to 36 percent the next month. While jobless rates have improved somewhat as some businesses have reopened, Maui’s employment will lag behind the rest of the state even as visitors continue to arrive, Bonham said.
“The jobs won’t come back in lockstep with visitors,” he said.
He explained that employers have brought back staff needed to sustain their operations right now and that businesses are not operating at full capacity.
Until there are more visitors, higher spending and reliable trends for arrivals, employers will be hesitant to bring on new workers, Bonham said.
He added that another contributor to low employment numbers on Maui is that service-industry businesses, especially those related to tourism, such as restaurants, have closed during the pandemic.
It “may take until well into the summer before we see a real surge in jobs,” Bonham said.
Following a year in which unemployment was 17.9 percent, Maui County’s unemployment rate in 2021 is expected to be the highest among all counties at 11.6 percent. In comparison, Kauai County’s unemployment rate is expected to be 9.8 percent, Hawaii County at 7.9 percent and Honolulu County at 5.9 percent.
Maui County’s unemployment is expected to decrease in 2022 with an expected 5.5 percent rate and in 2023 at 4.6 percent, nearing 2019 rates when unemployment was 2.6 percent.
For more information on the forecast, visit UHERO’s website at uhero.hawaii.edu.