Total Airline Seats For Maui Have Increased Dramatically So Far In 2011 Notes Local Economist Dr. Leroy Laney

Local Economy a ‘Mixed Bag’ Economists share analyses and predictions at economic outlook forum. “…the recession served to pull the scab off the  long-term wound of our economy—that wound is debt.” Sarah Ruppenthal Article From: Maui Weekly Dr. Jack Suyderhoud, professor of business economics at the University of Hawai‘i at Mānoa Shidler College of Business,  and Dr. Leroy Laney, First Hawaiian Bank economic advisor and professor of economics and finance at Hawai‘i Pacific  University, presented their economic analyses during the 37th Annual First Hawaiian Bank Economic Outlook on Friday,  Sept. 16.  For many, it may have been uncertain if the analysis presented at this year’s First Hawaiian Bank Economic  Outlook Forum was good news or bad news. But after taking a look at the big financial picture, one thing seemed certain:  Maui County is creeping along the road to recovery. More than 200 residents filled the Elleair Ballroom of the Maui Beach  Hotel on Friday, Sept. 16, for coffee, breakfast and the 37th Annual First Hawaiian Bank Economic Outlook Forum featuring  local economists Dr. Leroy Laney and Dr. Jack Suyderhoud. “Overall, Maui’s economy this year is a mixed bag,” said Laney,  First Hawaiian Bank economic advisor and professor of economics and finance at Hawaii Pacific University. “Maui’s visitor  industry is doing extremely well, thanks to its resilient upscale image… with resulting higher room  rates and a welcome  growth in airlift, including flights from secondary Mainland cities.” Total airline seats for Maui “have increased dramatically  so far in 2011,” with far stronger growth than anywhere else in Hawai‘i—an increase of more than 11 percent this year, Laney reported.  “A big reason is the fact that Maui has been picking up direct flights by Hawaiian and Alaska Airlines from  secondary cities in the U.S. and Canada. That, combined with aggressive marketing in those cities, has paid off,” he said. As a result, hotels have been able to raise their room rates, and Maui now has the highest average daily room rate in the state. “So reputation does pay off,” said Laney. With its unique juxtaposition of small town charm and big city sophistication, Maui offers “a combination that’s hard to top.”  But while tourism may be a boon for Maui County, it isn’t an economic panacea. “Tourism alone cannot be relied upon  to bring Maui back to better times,” said Laney. “The job total continues to struggle to return to pre-recession levels [and]  unfortunately, other sectors of  Maui’s economy, especially the construction industry, continue to lag significantly. Residential construction is down practically everywhere now,but anyprogress to resuscitate overall construction-public  or private—would result in a more balanced and sustained recovery for Maui.  ”The anemic construction industry is contributing to the lag in job creation and the uptick in unemployment  across Maui County, Laney said. “Maui continues to lose jobs, the only county in the state for which that’s consistently the  case,” he pointed out. “Even though the official end to the recession occurred some time ago… although the visitor industry is doing quite well, weakness in other sectors of Maui’s economy simply overwhelms that strength.” Laney predicted that gradual declines in Maui’s unemployment rate “will likely continue in the future. But there remains a  stark contrast between the current jobless rate and the 2 percent number that prevailed in the peak year of 2007.” However, he said, “Help may be on the way,” citing several projects slated for construction, such as Alexander & Baldwin’s Maui Business Park Phase II in Kahului and the 138-room Courtyard by Marriott around the corner from the Kahului Airport. In addition, economic growth is evident on the campus of University of Hawai‘i Maui College, which has seen a significant  increase in enrollment—nearly 33 percent in two years. “One growth area in the Maui economy, which also helps to diversify  it, is the recently renamed UH Maui College,” said Laney. “The name change reflects the addition of four-year degrees to its  curriculum, the first UH community college to grant such degrees.  ”Taking a look at the bigger picture—the U.S. and global economies—Dr. Jack Suyderhoud, professor of business economics at the University of Hawaii at Mānoa Shidler College of Business, described an invaluable opportunity to mold the future by  ooking at the past—and the present. “A few years down the road, when historians and economists look back on the Great Recession of 2007-09, it will not be regarded so much as a painful transitory period, but rather as the moment when the  long-term weaknesses of the U.S. economy became glaringly exposed,” he said. “In that sense, the recession served to  pull the scab off the long-term wound of our economy—that wound is debt.  ”Debt is the most formidable obstacle to financial recovery, he said, and the longer we take to deal with it, the longer it  will  take to see adequate economic growth.  “I’m hoping that the limited progress made on debt reduction will help stabilize short-term expectations,” said Suyderhoud.  However, he said, if capital markets believe that the U.S. is not serious about reducing its structural deficits, “this may spook  consumers and business investments. ”The result?  “That could indeed push us into the second dip,” Suyderhoud said.  “But I’m deeply hopeful that will not be the case… how we handle debt reduction and rebalancing the economy in the next few months will tell us a lot about our long-term prospects." For more information about the 2011-12 Economic Forecast for Maui County, visit the First Hawaiian Bank Website at  www.fhb.com.

Airline Has Taken Next Step Forward in Plans to Offer Regular Nonstop Service Between China and Hawaii

Airline maps out China-Hawaii runs

The carrier that flew the first direct charters to the isles hopes to add scheduled flights

By Allison Schaefers
Article from: Star-Advertiser

China Eastern Airlines, the carrier that brought the first direct charter flights from China to Hawaii last month, has taken the next step toward offering regularly scheduled nonstop service between the destinations.

China’s second largest carrier has applied with the administrative body of the People’s Republic of China for permission to operate direct flights between China and Hawaii, Michael Merner, managing director for Hawaii Tourism Asia, told members of the visitor industry yesterday.

The Shanghai-based carrier took the step after successfully partnering with China CYTS Tour Holding Co., one of China’s leading tour operators, to bring about 777 visitors here on three inaugural charter flights during the Chinese New Year holiday, Merner said.

“They sold out these flights in just 14 days,” said David Uchiyama, the Hawaii Tourism Authority’s vice president of brand management. “They would definitely like to come back.”

The carrier would still need to obtain permission from the U.S. Department of Transportation to begin the service. Merner said the airline also plans additional charters this year.

Members of Hawaii’s visitor industry and business community who heard the news at a spring marketing update at the Hawaii Convention Center were pleased. They have been trying to expand Chinese air service since 2007 when the U.S.-China Memorandum of Understanding made leisure travel from China possible.

“There are over 170 cities in China with over 1 million visitors,” said Keith Vieira, senior vice president and director of operations for Starwood Hotels & Resorts in Hawaii and French Polynesia. Vieira said he is looking forward to welcoming President Hu Jintao at the Asia Pacific Economic Cooperation meeting in November. “We are looking at it (China) as a market with huge potential based on sheer volume.”

While there is a lot of interest in Hawaii from Chinese tourists, a lack of direct flights and a difficult visa process have tempered demand.

Arrivals from China would grow if leisure travelers who wanted to visit the islands could fly nonstop, said Benny Wang, director of Xinhua Travel’s international department in Beijing.

Even with these impediments, Merner said that China’s outbound travel to Hawaii grew 57 percent last year to 66,047 arrivals. This year, arrivals are expected to grow another 16 percent, he said.

“Hawaii is outperforming all other major overseas destinations in the China market,” Merner said. “Visas are getting more predictable.”

Direct air service will only make the market stronger, he said.

However, Uchiyama said its hard to determine whether China Eastern’s plan will take off.
“We’ve been here before,” he said.

Hainan Airlines, China’s largest private carrier, was expected to begin direct service between Honolulu and Beijing in 2009, but postponed plans.

The state then began eyeing new prospects.

“We’ve been talking to China Eastern for some time,” Uchiyama said, adding that the carrier’s dominance in the market and its connections with the Chinese government, a majority owner, could help it overcome challenges. State tourism officials have also discussed direct routes with China Southern and have continued to seek a start date from Hainan Airlines, he said.

Joel Chusid, general manager for North America for Hainan Airlines, has said that “visa issues” and “tour operators who were hesitant to guarantee enough business to make the route profitable” were among the chief reasons for the delay.

The success of the charters may help bridge that hurdle, Vieira said.

“China is heavily wholesaler dominated,” he said. “If they have confidence that they can book the business, the airlines will be confident.”