After greater than a 12 months, the Hawaiian economic system is slowly diversifying

After more than a year of debating how to diversify Hawaii’s tourism-dependent economy, little progress has been made as island tourism returns.

“We learned nothing from our difficult year,” said Senator Glenn Wakai, chairman of the Senate’s Energy, Economic Development, Tourism and Technology Committee. “And since we’re recovering faster than expected, there seems to be even less discussion. … We really missed the opportunity over the past year to really think about what Hawaii’s economy should be like. “

The legislature began with a speech by Governor David Ige on January 25, in which he called for a post-COVID-19 economy “Hawaii 2.0”.

“Every government, business, and nonprofit needs to use digital technology to be successful,” said Ige. “We need to develop a clear vision for a more diversified and sustainable economy that is compatible with our culture and way of life. And that vision must be based on solid economic analysis. A post-COVID Hawaii can no longer be a Hawaii like it used to be. “

When asked during this term for examples of specific efforts to invest or increase in industries such as aquaculture, technology, aerospace, alternative energy, or diversified agriculture, Wakai said bluntly, “No.”

“We’re going to go back to the old ways that the tourist cow is milked. For how long?”

The Wakai Committee passed two non-binding House resolutions on Monday calling on the state’s Department of Business, Economic Development and Tourism to compile a list of Fortune 500 companies that may be ready to move to Hawaii and Find potential incentives to move. and another calling on the Hawaii Community Foundation to organize a working group “to develop a public-private partnership model to prepare for Hawaii’s post-pandemic recovery.”

The goal would be to build on the government, philanthropy and private sector collaboration that helped Hawaii respond to COVID-19-related food shortages when thousands of families suddenly lost their incomes, said Micah Kane, president and CEO of HCF .

“Food insecurity was a big problem that worsened during the pandemic,” Kane said.

He hopes to build on these collaborations and potentially bring more philanthropic investments from the mainland to address even more long-standing island problems, including developing affordable housing and diversifying the state economy.

“We have to build on that before it goes too far in our rearview mirror,” said Kane. “We should be able to do this while enjoying a very robust tourism economy. … We have to come together. “

Carl Bonham, executive director of the University of Hawaii Economic Research Organization and a member of the State House Select Committee for COVID-19, said Hawaii’s tourism industry was the result of years of efforts to diversify an island economy that once relied on growing sugar and pineapples.

The shift to tourism was also driven by external forces such as the post-WWII boom and the development of air travel.

“It was planned and was a government and private sector effort that took time and effort,” said Bonham. “We have been talking about it for 40, 50 or 60 years (diversification). There has never been any realistic reason to believe that we would make dramatic changes in the past year. This must be seen as a multi-year, multi-headed effort. “

At short notice, Bonham said, “It’s still about tourism. There’s no switch you can suddenly flip and diversify the economy. “

Bonham said, however, that more efforts could be made over the past year to better manage tourism, including restricting access to popular attractions like Hanauma Bay and Diamond Head.

“We should have made great strides into something like that when no one was here,” said Bonham.

Rep. Gene Ward (R, Hawaii, Kai Kalama Valley) flew to Maui on Saturday to deliver a speech and saw firsthand how Valley Isle tourism rebounded when Ward’s office only stayed for a day got a rental price of $ 850.

Instead, Ward said, “We were picked up.”

Ward also believes Hawaii wasted a year doing little to turn the economy off tourism.

“Cynically, it’s the same old as the old: rhetoric, not action,” said Ward. “All promises, no delivery.”

Private aerospace companies are keen to work in Hawaii with a new era in space exploration – much like Hawaii’s role in the early days of the American Mercury and Gemini space projects. Wakai also said that Hawaii – the state closest to the equator – “is prepared for small-space satellite launches”.

“We lived on our good looks for so long,” said Ward. “Now we have to live on our brains, the high-tech stuff. But we’re either deaf or stupid. We should have prepared the economy for re-entry and long-term survival. But I don’t see anything in the pipeline. “

Steven Bond-Smith, Senior Research Fellow at the Bankwest Curtin Economics Center at Curtin University Business School in Australia, has studied Hawaii’s economy as a new member of UHERO and said it will be difficult for Hawaii to find another industry to add tourism to replace.

“Places that are really small and isolated, like Hawaii, Western Australia or New Zealand, have to specialize in one industry to compete with the big conglomerated economy,” said Bond-Smith. “It also means you are exposed to external shocks like the pandemic.”

“Tourism is not going to go away,” he said. “It’s what Hawaii is good at.”

However, there are opportunities to train hotel professionals and businesses to diversify into other tourism markets like conventions and business travel – or as the Hawaii-based market for travel to and from China and Brazil, Bond-Smith said.

“It lays the eggs in a few more baskets,” he said.

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