Study: Oahu may take longer to bounce back

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HONOLULU -- The lodging industry on Hawaii's islands of Kauai, Maui, and the Big Island will recover from the downturn caused by Sept. 11 terrorist attacks faster than the island of Oahu, according to a study by Ernst & Young.

One part of the formula for Hawaii's recovery is based on where the visitors come from. Since the Japanese are more reluctant to return to Hawaii than Americans, those islands that have a higher percentage of Japanese visitors will take a longer time to recover, according to the study.

Oahu, which gets about 47% of its visitors from international destinations, mostly Japanese, will take the longest to recover.

Maui, which gets only 19% of its visitors from international markets will recover more quickly. Kauai and the Big Island both have an international mix at about 22%.

According to the state Department of Business Economic Development and Tourism, the number of American tourists to Hawaii was down 16% for the week of Oct. 4 to 11 compared to the same month last year.

The number of international visitors to Hawaii was off 23% for the same week.

"Hawaii will have a "U" shaped recovery where it will go down and hover at the bottom and then go up," according to Jeffrey Dallas, practice leader for Ernst & Young. "There are variables of uncertainty that affect the length of the recovery.

The more uncertainty, the longer the recovery. You're not looking at a three-month recovery and you're not looking at a six-month recovery."

Other predictions of the study concluded that:

• Incentive, groups and convention business will be the "most significantly impacted" and "recovery should be sluggish."

• Large, chain affiliated properties, predominately located on Oahu "will struggle to maintain occupancies in the near term" and their long term recovery is "directly correlated with the U.S. and Japanese economies."

And overall, "Hawaii's recovery currently lags most major U.S. markets' recovery," and "it is anticipated that the overall Hawaii lodging market will lag in recovery time vs. other major U.S. lodging markets."

"The other U.S. markets are less dependent on another country's economy and they have the advantage of having a drive-in market," said Dallas.

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