Rising tourism numbers cause concerns about impact on state

How many more tourists can the state’s environment and infrastructure support?

That’s the question being asked by some residents and lawmakers after a report Wednesday said Hawaii’s visitor industry set five records in 2017, the sixth record-setting year in a row.

Last year 9.4 million visitors spent $16.8 billion, both records, the Hawaii Tourism Authority said. Tourism was the single largest source of private capital for the state’s economy in 2017, responsible for 204,000 jobs and $2 billion in taxes, two more records. The fifth record was the number of trans-Pacific air seats flown to the state.

“Tourism growth has been absolutely tremendous for the economy,” said Jerry Gibson, area vice president for Hilton Hawaii. “With the high cost of housing and other accessories for our team members and the community at large, we need robust tourism.”

Jack Richards, president and CEO of Pleasant Holidays, said he’s excited about what Hawaii achieved in 2017 and expects 2018 will be another record year.

“We think arrivals by air in 2018 could hit 10 million,” Richards said. “Our 2018 bookings show that average per-person spending is up 9 percent over the prior year. It just keeps getting better.”

But some residents and lawmakers are concerned that the tourism juggernaut is getting out of hand. They don’t get excited when they hear that 2018 tourism is expected to outpace 2017 — they get anxious.

“There’s a tipping point where people can suffer and I believe the tipping point is here,” said Choon James, a North Shore community advocate. “For those of us living here our whole life for decades, the increase in congestion and load on carrying capacity is a real struggle.”

Windward Oahu resident KC Connors said she fears an increasing number of homeowners and investors are attempting to capitalize on the tourist boom by turning their properties into vacation rentals even in neighborhoods that aren’t zoned to accommodate them.

HTA’s year-end 2017 statistics bear out her worries. Visitors planning to stay in a hotel increased 4 percent, but that growth rate was outpaced by visitors who planned to stay in a rental house or private or shared room. Those markets grew 13 percent, 100 percent and 106 percent, respectively.

“Illegal vacation rentals have changed the fabric of neighborhoods. They’ve also made housing less available and less affordable, causing increased homelessness,” Connors said.

These tourism counterpoints have prompted state lawmakers to try to identify ways to offset tourism’s negative impacts, such as overtaxed infrastructure and overused beaches and trails. They’re also trying to figure out what to do about the sprawl of vacation rentals into non-resort communities across the state.

A Senate measure on the issue, SB 2446, passed through three committees Wednesday with amendments. The bill would redistribute more than 15 percent of HTA’s funding to the state Department of Land and Natural Resources and counties if arrivals hit certain statewide and county thresholds.

HTA is the state agency charged with marketing Hawaii as a tourist destination to the world. Tourism proponents say cutting its budget would be a mistake.

“Faced with increased competition and ever-shifting pressures that affect tourism to Hawaii, reducing HTA’s budget will undermine Hawaii’s position in the market and damage one of the state’s major sources of revenue,” testified George Szigeti, HTA president and CEO.

Transient accommodations taxes, which pay for HTA’s budget, grew to $508 million in fiscal year 2017 from $395 million in fiscal year 2014, but HTA’s annual funding has remained flat at $82 million, Szigeti said.

“Most businesses that are climbing to optimum results do not cut their marketing budgets,” said Gibson, the Hilton VP.

Richards said lowering the funds available for HTA to market the destination would cause a corresponding decline in tourism.

“If anything, the state should consider putting more money into tourism to improve the airport facilities. Cruise ports could use updating, too,” he said.

Investing in tourism pays, Gibson said. Last year, Hilton Grand Vacations opened a new tower and created more jobs. Hilton also renovated properties and gave employees raises, he said.

“We wouldn’t be as forward thinking as much as we are with capital infusion if we didn’t think that it was going to be a viable tourism economy,” Gibson said.