Hawaii travel industry upheaval forecast as virus spreads

Normally, Hawaii hotels experience an average of about 80% occupancy. (Pexels photo)

HONOLULU — A University of Hawaii economist on Thursday predicted only about half of Hawaii’s hotel rooms will be filled with travellers over the next few months “if we’re lucky” as the new coronavirus depresses tourism.

Carl Bonham told members of an advisory committee to the House of Representatives that he expects tourism industry workers will soon start losing jobs and having their hours cut.

Normally, Hawaii hotels experience an average of about 80% occupancy. But Bonham said this figure will likely drop by 30 to 40 percentage points.

Hawaiian Airlines CEO Peter Ingram told the committee that airlines will likely continue reducing their flights in the weeks ahead as people avoid travel because of the virus.

Bonham predicted COVID-19 will pitch Hawaii and the United States into recession.

“The short-term economic effects will overwhelm the state”s ability to counteract them. We don’t have that capability,” Bonham said.

But the state could soften the blow through steps such as extending and increasing unemployment benefits, he said. He also stressed the importance of investing in preventing the circulation of the virus.

“One of the worst possible scenarios is that we have widespread outbreak in Hawaii,” Bonham said.

The visitor industry accounts for 17 per cent of Hawaii’s economy and 19 per cent of the state’s jobs.

House Speaker Scott Saiki formed the committee to help avoid the kind of problems Hawaii experienced when plummeting tax revenue forced lawmakers to slash spending during the recession a decade ago. At the time, budget cuts led to a four-day week at public schools and sharp reductions in spending on mental health care and homelessness.

“We are still feeling the effects of those cuts,” Saiki said at the beginning of the meeting.