PO’IPU – Though there are positive signs, the island’s visitor industry hasn’t been Kaua’i’s main “growth element” over the last few years, said Bank of Hawai’i’s chief economist.
Sales of residential homes and land are what’s driving the economy, said Paul Brewbaker, Bank of Hawai’i senior vice president and chief economist.
“This is really where the action is,” with Mainland investors buying homes in Hawai’i and on Kaua’i, he told a gathering of the Kaua’i Chamber of Commerce at the Hyatt Regency Kaua’i Resort & Spa here.
While the visitor industry remains the island and state’s most important economic driver, for now it is “just there,” though there are some promising signs, said Brewbaker.
“The airlines are adding lift to Kaua’i,” he said of carriers including American Airlines, United Airlines, Aloha Airlines and others either adding or increasing numbers of nonstop flights between Lihu’e Airport and the U.S. West Coast.
“That’s the end of that story.”
Airlines are repositioning equipment to take advantage of traveler preferences to bypass O’ahu in favor of nonstop travel to and from Kaua’i and the other Neighbor Islands. Brewbaker said he feels this puts the island in a position to accept even more visitors.
“You’ve got a shot at punching through to some higher numbers” in terms of visitor arrivals, he said.
The “new market” will continue to be predominantly West Coast visitors, and more of them coming for leisure than business, meeting, incentive or convention travel, he predicted.
Statewide, the economy has been on a five-year positive run. “The bottom line is the economy is growing,” and as goes the economy so goes state tax revenues, he said.
Brewbaker is a member of the state Council on Revenues that last week softened even more its projection of state-revenue increases based on various tax credits passed during the last few sessions of the state Legislature and signed into law by former Gov. Ben Cayetano.
Much could change if the country goes to war, he concluded about the “geopolitical risk” inherent in fiscal projections.
Staff Writer Paul C. Curtis can be reached at mailto:email@example.com or 245-3681 (ext. 224).