DBEDT predicts recession recovery will be a 'gradual process' through 2009

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Shane Nelson
Shane Nelson

*logoIn a quarterly economic report released May 20, Hawaii's Department of Business, Economic Development and Tourism said it expects the current recession to continue to affect the state's economy through 2009.

"National and international economic conditions continue to negatively affect Hawaii's economy, and this will likely be the case for most of 2009," said DBEDT Director Theodore E. Liu. "We are hopeful the situation will improve late this year, but recovery is likely to be a gradual process."

While the DBEDT did not change its forecast for visitor arrivals in 2009 -- a decline of 5.9% compared with 2008 -- from its previous quarterly report released in February, the state agency did alter its visitor expenditures figures. In February the DBEDT predicted a 1.9% decline in spending when compared with 2008's annual totals. In the May 20 report, that number plunged to a 7.9% decline.

"When you look at the values that are in the packaging and the pricing for Hawaii in the marketplace today, what is occurring is people are understanding the value and coming," state tourism liaison Marsha Wienert said about the new 2009 forecast figures.

"But what it does to us, of course, is they don't spend as much while they are here. The room rate is, of course, the driver for those expenditures, but we're also finding that in these challenging times ... that the spending for food and beverages and activities and things like that are decreasing, as well. People are just a little bit more budget-conscious."

The May 20 report also included annual visitor arrival and expenditure forecasts through 2012. The totals for 2010 virtually matched 2009 expectations, but a 4.3% increase in arrivals was predicted for 2011, along with a 7.4% increase in visitor spending.

"We're trying to take all of the various factors facing us today and make the best judgment calls that we can," Wienert said. "And we believe that in 2010 we will see a slight increase over '09, but when we are already down the 16%, 17% that we are, really we don't believe that we'll see any increases until [2011 and 2012]."

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