The Aloha State: Hawaii Has Said Hello and Goodbye to Tourists, Industries, Jobs and Retailers-Causing the Overall Economic and Real Estate Market Conditions to Be a Mixed-Bag of Improvement and Uncertainty
Hunt, Kristin Gunderson, Journal of Property Management
"Our economic condition is still better than most other states on the mainland" said Eugene Tian, acting administrator for the research and economic analysis division of Hawaii's Department of Business, Economic Development and Tourism. "Data is showing a lot of good news: Tourism is improving and unemployment claims have been declining since the beginning of ."
The tourism sector, which Hawaii relies on heavily experienced mixed results during the third quarter of 2011, compared to the same quarter in 2010. The total number of visitors arriving by air to Hawaii decreased 0.9 percent. However, visitors stayed longer, helping to increase visitor spending by 8.3 percent, according to economic development department information.
While Hawaii has seen a decline in domestic visitors since the recession began, international visitors from Canada and Asian countries have increased. However, in the third quarter, the increase in international visitors was not enough to offset the decrease in domestic visitors.
"Hawaii is negatively affected when either the United States or Asian economies are struggling," said Miles Kamimura, CPM, president of Pacific Property Inc. in Honolulu. "We are dependant on both to do well and be successful."
Construction, another industry lifeline to Hawaii's economy, has also taken a hit. In the third quarter of 2011, the permit value for private construction decreased SI4.7 million. However, many construction jobs increased in the third quarter of 2011, compared with the same quarter of 2010.
"Construction is one of the biggest sectors holding us back," said Graham Peake, CPM, principal broker and vice president for Peake and Levoy, LLC, AMO, in Kahului, Hawaii.
Still, Hawaii's unemployment numbers are improving, and other industries are taking hold--helping to diversify the economy, albeit slightly. The private sector alone stimulated job growth in the third quarter, according to fourth quarter data from the economic development department. It added about 9,700 jobs compared to the third quarter of 2010.
Professional and business services experienced the largest job gains, followed by educational services, food services and drinking places, health care and social assistance, and retail trade.
Healthcare in Honolulu
In Honolulu, the unemployment rate has fallen from 6.1 percent to 5.4 percent over the past two years--particularly benefiting from job growth in the healthcare and education fields, according to the Colliers Monroe Friedlander third quarter 2011 Office Briefing Report Both industries added 3,700 new positions combined.
"Were seeing an increase in healthcare and social services jobs because of the aging population in our state: 14.5 percent of our population is age 65 and above," Tian said. "Another industry with increasing jobs is educational services. A lot of foreign students are coming here to study, whether it's at private schools with grades K-12; vocational or technical schools; or private colleges. We are close to Asian countries and students want to come here to study English and get a degree from a private school. Hawaii schools are also pretty competitive in terms of tuition."
Ultimately, though, tourism must continue to improve for Hawaii's commercial real estate market to boon again, real estate experts and economists said. …