Would Hawaii Survive Without Tourism?

With its postcard-worthy beaches, lush jungles, and vibrant culture, Hawaii has become synonymous with an idyllic tropical getaway. For decades, tourism has been the driving force behind Hawaii’s economy. But what would happen if that tourism dried up? Could Hawaii survive without its largest industry?

If you’re short on time, here’s a quick answer: While ending tourism would create major economic challenges, Hawaii would likely adapt and ultimately survive without relying solely on visitors.

The state would need to diversity its economy, increase self-sufficiency, and provide support for displaced tourism workers.

In this article, we’ll take an in-depth look at Hawaii’s dependence on tourism and analyze its ability to survive without this key economic sector. We’ll examine the potential impacts on jobs, state revenue, local industries, and everyday island life if tourism disappeared.

Tourism’s Current Contribution to Hawaii’s Economy

As one of the most popular tourist destinations in the world, Hawaii relies heavily on its thriving tourism industry. The industry plays a crucial role in the state’s economy, contributing significantly in various aspects.

Let’s explore the direct employment in hospitality and tourism, the tourism dollars spent at local businesses, and the tax revenues used to fund public services.

Direct Employment in Hospitality and Tourism

The tourism industry in Hawaii provides a substantial number of jobs to the local population. From hotel staff to tour guides, restaurants to transportation services, there is a wide range of employment opportunities created by the tourism sector.

According to more recent data from the Hawaii Tourism Authority’s 2021 annual report, Hawaii’s tourism industry supported approximately 180,000 jobs in 2021, accounting for approximately 17% of the state’s total employment.

Some key facts on Hawaii’s tourism industry employment for 2021:

• Direct tourism jobs – There were approximately 116,000 jobs directly in the tourism industry, such as hotels, restaurants, tours, etc. This was a decrease from 133,000 direct tourism jobs in 2019.
• Total tourism jobs – Including indirect and induced impacts, tourism supported about 180,000 jobs total in 2021, down from 223,000 in 2019.
• Share of total state employment – Tourism jobs accounted for 17.4% of total statewide employment in 2021, a decrease from 20.9% in 2019.
• Job recovery – While 2021 tourism employment was still below pre-pandemic levels, it significantly rebounded from under 110,000 jobs in 2020 during the height of COVID-19 impacts.

So while Hawaii tourism remains a major employer, its share of total state jobs has declined somewhat in recent years due to the pandemic’s economic effects. But the industry still accounted for nearly 1 in 5 jobs in the state in 2021.

Tourism Dollars Spent at Local Businesses

When tourists visit Hawaii, they not only contribute to the economy through their expenditures on accommodation and transportation but also by spending money at local businesses.

The dollars spent by tourists at restaurants, shops, and attractions have a positive ripple effect throughout the local economy. This infusion of funds helps support small businesses and encourages entrepreneurship, fostering economic growth and diversification.

According to the most recent Hawaii Visitors and Convention Bureau annual report, Hawaii’s visitor spending declined significantly in 2020 and 2021 due to the COVID-19 pandemic, but has begun recovering:

• In 2019, Hawaii visitor spending reached a record high of $17.75 billion.
• In 2020, visitor spending dropped to $8.86 billion, a 50% decrease from 2019 due to the severe decline in tourism.
• In 2021, visitor spending rebounded to $12.72 billion, though still below the 2019 peak.
• In the first half of 2022, preliminary data shows visitor spending totaled $8.4 billion, signaling continued recovery toward pre-pandemic levels.

So while Hawaii visitor spending set a new record in 2019 prior to the pandemic, the numbers dropped dramatically in 2020 and 2021 due to travel restrictions and economic impacts.

However, tourism spending has demonstrated a steady resurgence more recently as travel rebounds. But it may take more time to regain the 2019 highs.

Tax Revenues Used to Fund Public Services

The revenue generated from tourism plays a vital role in funding public services and infrastructure development in Hawaii. Through various taxes and fees imposed on the industry, the state is able to invest in education, healthcare, transportation, and other essential services.

This financial support helps maintain the quality of life for residents and enhances the overall attractiveness of the state for both visitors and locals.

According to the State of Hawaii Department of Business, Economic Development & Tourism’s 2021 annual report (most recent available), Hawaii’s tax revenue related to tourism declined significantly during the pandemic but is recovering:

• In 2019, State of Hawaii tax revenue related to tourism reached $2.07 billion.
• In 2020, tourism-related tax revenue dropped to $736 million, a 65% decrease from 2019.
• In 2021, tourism tax revenue rebounded to $1.17 billion, though still 43% below the 2019 level.
• Major sources of tourism tax revenue include: general excise tax, transient accommodation tax, and sales of goods and services.

So while Hawaii received over $2 billion in tax contributions from tourism in 2019, the pandemic caused a major reduction in 2020 and 2021 as travel declined dramatically.

As tourism recovers post-pandemic, the state can expect to see continued growth in tourism-related tax revenues approaching pre-pandemic peaks. But Hawaii remains heavily economically reliant on tourism overall.

The Challenging Transition Required Without Tourism

For a state like Hawaii, which heavily relies on tourism as its main economic driver, the thought of surviving without it seems almost unimaginable.

However, exploring the challenges that would arise in such a scenario is crucial for understanding the potential consequences and the steps that would need to be taken.

Mass Unemployment and Migration of Workers

Without tourism, Hawaii would face a massive wave of unemployment. The tourism industry employs a significant portion of the state’s population, including hotel staff, tour guides, restaurant workers, and many more.

The sudden loss of these jobs would create a state of economic crisis, leading to a rise in unemployment rates and financial instability for many families.

Moreover, the absence of employment opportunities in the tourism sector would likely result in the migration of workers to other states in search of jobs. This could lead to a significant brain drain, as skilled individuals may be forced to leave Hawaii in pursuit of better prospects elsewhere.

Decline in Support Industries Reliant on Tourism

It’s not just the tourism industry itself that would suffer in the absence of visitors. Numerous support industries, such as transportation, retail, and entertainment, rely heavily on tourism for their revenue. Without the influx of tourists, these industries would experience a sharp decline in business, potentially leading to closures and job losses.

For example, taxi drivers, souvenir shop owners, and performers who entertain tourists would all face significant challenges in finding new sources of income. The ripple effect of this decline would be felt throughout the entire economy of Hawaii.

Plummeting State Revenues and Budget Cuts

Hawaii heavily depends on the revenue generated by tourism to fund various state programs and initiatives. Without tourism, the state would experience a substantial decrease in tax revenue, which would directly impact its ability to provide essential public services.

Budget cuts would likely become a necessity, affecting areas such as education, healthcare, and infrastructure development. The quality of life for residents would be compromised, and the state’s ability to attract new businesses and investments would be diminished.

How Hawaii Could Adapt in a Post-Tourism Economy

As the COVID-19 pandemic continues to impact global travel, the tourism industry in Hawaii has taken a significant hit.

With restrictions on international and domestic travel, the once bustling islands have seen a sharp decline in visitors. This begs the question, would Hawaii survive without tourism?

While the tourism industry has long been the backbone of Hawaii’s economy, there are potential avenues for the state to adapt and thrive in a post-tourism economy.

Diversifying the Economy Beyond Tourism

One way Hawaii could adapt is by diversifying its economy beyond tourism. This involves developing other industries that can contribute to the state’s economic growth.

One potential avenue is renewable energy. Hawaii has already made significant strides in this area, with a goal to achieve 100% renewable energy by 2045.

By investing in renewable energy infrastructure and attracting companies in this sector, Hawaii can create new job opportunities and reduce its dependence on tourism.

Another avenue for diversification is the film industry. Hawaii’s stunning landscapes have long been a favorite location for filmmakers, and by offering incentives and support for film production, the state can attract more film projects.

This not only brings in revenue but also creates jobs in various sectors such as hospitality, transportation, and catering.

Leveraging Military Spending

The U.S. military has a substantial presence in Hawaii, with major facilities and operations centered around Joint Base Pearl Harbor-Hickam on Oahu. Military spending currently accounts for 8-10% of Hawaii’s GDP and provides around 100,000 military and civilian jobs.

While tourism may decline, Hawaii could explore opportunities to maintain or potentially expand military investments on the islands.

With major commands like the U.S. Indo-Pacific Command headquartered in Hawaii, the strategic importance of the state for national defense is unlikely to fade.

Leveraging this ongoing military presence through continued infrastructure and construction projects could help offset some of the economic impacts of a tourism decline.

However, the potential for significant expansion may be limited by overall military budget constraints.

Increasing Agricultural and Fishing Self-Sufficiency

Hawaii heavily relies on imported food due to its isolated location. However, the state has the potential to increase its agricultural and fishing self-sufficiency.

By investing in sustainable farming practices and supporting local farmers, Hawaii can reduce its dependence on imported food. This not only strengthens the state’s food security but also creates opportunities for agricultural tourism, where visitors can experience farm-to-table dining experiences and learn about sustainable farming practices.

In addition to agriculture, Hawaii can also focus on expanding its fishing industry. With its vast ocean resources, the state has the potential to become a leader in sustainable fishing practices.

By implementing strict regulations to protect marine ecosystems and supporting local fishermen, Hawaii can not only supply its own seafood needs but also export high-quality, sustainably caught fish to other markets.

Developing High Tech and Innovation Industries

Hawaii has a growing tech sector that has the potential to contribute significantly to the state’s economy.

By investing in high-tech industries such as cybersecurity, renewable energy technology, and data analytics, the state can attract tech companies and create high-paying jobs. This not only diversifies the economy but also positions Hawaii as a hub for innovation and technology in the Pacific.

Furthermore, the state can leverage its unique geographical location and natural resources to develop industries such as space tourism and deep-sea exploration.

These cutting-edge industries have the potential to attract both tourists and investors, further bolstering Hawaii’s economy.

Long-Term Outlook if Tourism Disappeared

It’s hard to imagine Hawaii without the bustling tourism industry that has become its lifeblood.

The beautiful beaches, stunning landscapes, and vibrant culture have made it a top destination for travelers from around the world. But what if tourism suddenly disappeared? What would be the long-term outlook for the state? Let’s explore some possible scenarios.

A Slow and Challenging Transition

If tourism were to disappear, Hawaii would undoubtedly face a significant challenge in transitioning its economy. The tourism sector currently employs a large portion of the local population and contributes greatly to the state’s revenue.

Without this industry, many jobs would be lost, and businesses would struggle to stay afloat. The transition to a new economic model would require time, planning, and investment.

However, it’s important to note that Hawaii is not entirely dependent on tourism. The state has other industries, such as agriculture, renewable energy, and technology, that could be developed further to provide alternative sources of income.

Diversifying the economy would be crucial in mitigating the negative impacts of a tourism decline.

One potential challenge that Hawaii would face is attracting new industries and encouraging businesses to invest in the state. This would require creating a favorable business environment, offering incentives, and investing in infrastructure and education.

It may take time to build the necessary foundations for these industries to thrive.

But Eventual Recovery Through Indigenous Industries

While the transition away from tourism would be challenging, Hawaii could ultimately recover through the development of its indigenous industries.

For instance, the state has a rich agricultural heritage, with a variety of crops that could be grown and exported. By promoting local agriculture and supporting farmers, Hawaii could become more self-sufficient and less reliant on imported goods.

Renewable energy is another sector where Hawaii has a significant advantage. The state’s abundant sunshine and strong winds make it an ideal location for solar and wind power projects.

By investing in renewable energy infrastructure and encouraging the use of clean energy, Hawaii could not only reduce its dependence on fossil fuels but also create new job opportunities in the green energy sector.

Furthermore, Hawaii has a unique cultural heritage that could be leveraged to attract visitors interested in authentic experiences. By promoting traditional arts, crafts, and practices, the state could develop a niche market for cultural tourism.

This would not only provide economic benefits but also help preserve and celebrate Hawaii’s rich cultural identity.

A More Self-Sufficient But Possibly Diminished Hawaii

If tourism were to disappear, Hawaii would likely become more self-sufficient in terms of its economy. The state would rely less on external factors and focus on developing its own industries and resources.

This could lead to a sense of self-reliance and resilience among the local population.

However, it’s important to acknowledge that without the influx of tourism dollars, Hawaii’s economy may be smaller and more limited in scope.

The state would need to adjust to a potentially reduced level of prosperity. Infrastructure projects, public services, and educational institutions might feel the financial strain.

Conclusion

The abrupt end of tourism would deal a devastating economic blow to Hawaii. Mass unemployment and declining tax revenues would cause major hardship. However, in the long run, Hawaii would adapt and ultimately survive without total dependence on tourism.

Through economic diversification, developing self-sufficiency, and leveraging its natural resources, Hawaii could establish a viable post-tourism economy. It would require difficult changes, but the islands would endure.

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