Visitor arrivals to Hawaii are not expected to fully recover until 2027, according to the latest economic forecast from the Department of Business, Economic Development and Tourism.

The overall theme of DBEDT’s first-quarter 2024 Statistical and Economic Report released Wednesday was continued lower economic growth in Hawaii, including tourism, which has lagged behind the recovery of the state’s overall economy.

In its latest forecast, DBEDT revised slightly upward its economic growth projections for 2024 to 1.5% of real gross domestic product from an earlier forecast of 1.3%. DBEDT’s projections for 2025-2027 remain at about 2% economic growth.

Still, that’s a drop in real GDP growth from the 4% or so that Hawaii has averaged over the past three years. Why does it matter? Put simply, real GDP is an inflation-­adjusted calculation reflecting the value of all the goods and serv­ices produced by an economy in a given year. A decrease in GDP signals that an economy is shrinking.

DBEDT Director Jimmy Tokioka said in a statement, “Our new forecast has three implications: (1) our economy is going to grow slowly in 2024, and while it is not a recession, it will be slower than our growth last year and slower than the nation’s economic growth; (2) it will take longer than expected for our economy to recover to the pre-pandemic level, about seven years for tourism and job recovery; and (3) the impacts of the Maui wildfires may last a few years and the impacts will continue to affect the other counties.”

The economic results reiterate that tourism, which in 2017 comprised at least 17.2% of the statewide economy, plays a major role in how Hawaii’s economy fares.

For instance, Hawaii’s real GDP in the third quarter of 2023, the latest estimate available, recovered to 97.7% of the same period in 2019, according to data from the U.S. Bureau of Economic Analysis. But Hawaii’s tourism sector was the drag with a recovery of about 90% of the 2019 level in the third quarter of 2023 compared to Hawaii’s nontourism sectors, which were fully recovered. The tourism sector includes transportation, retail trade, entertainment and recreation, accommodation, and food service industries

This year DBEDT expects visitor arrivals to Hawaii will reach 9.8 million. That’s less than 5% below the peak 10.3 million out-of-state visitors that came to Hawaii in 2019. Still, given the softening, DBEDT does not expect Hawaii tourism arrivals to fully recover until 2027 with 10.4 million visitors.

DBEDT has forecast that nominal visitor spending, which hasn’t been adjusted for inflation, will reach $21.4 billion this year and will increase to $23.7 billion by 2027. That compares to $20.78 billion in visitor spending in 2023, $19.70 billion in 2022, and $17.72 billion in 2019.

The DBEDT results were released as the Hawaii Tourism Authority and its stakeholders gathered for a virtual spring marketing update from HTA’s global marketing teams.

Mufi Hannemann, Hawaii Tourism Authority board chair, said during the HTA’s spring marketing update, “We have before us some unprecedented challenges, but I’ve always believed that every crisis presents an opportunity. Today it’s all about a tourism update where we will unveil what the proactive plans are for the Hawaii Tourism Authority.”

The pressure is on HTA’s global marketing teams to bolster Hawaii’s economy by stimulating travel demand, while ensuring that tourism’s impact does not outweigh the economic benefits.

“Today is all about learning more about our plans to bring back travel from our base market, the United States; Canada; our international markets, bringing more business here for our convention center,” Hannemann said. “Our pledge from the board to our marketing partners is that we’ll do whatever it takes — whether it’s seeking additional funding, whether it’s supporting their efforts, whether it’s helping with their messaging — to make sure that everyone understands, ‘Now is the time to return to Hawaii.’”

HTA’S newly formed stewardship team is headed by HTA Chief Stewardship Officer Kalanai Ka‘ana‘ana, who said branding and stewardship efforts must stay linked.

“Really when we think about it quite simply (stewardship) is about ‘How do we protect what makes Hawaii so special? How do we make sure that we as an industry can be more sustainable in what we do from an environmental standpoint as well as economic and justice and other (diversity, equity and inclusion) opportunities? And then again, how do we highlight and showcase the best that Hawaii has to offer?’”

Hannemann offered Makaukau (We are Ready) Maui as an example of a campaign that fuses branding with stewardship. Makaukau, which is part of HTA’s strategy to support Maui’s recovery, sends a message to visitors that Maui residents are now ready to welcome them.

“Makaukau Maui was an opportunity to convey a message of hope and of optimism — not only because we want to see economic recovery take place on that very special island with residents saying, in effect, that they want people to come back and experience what has made Maui so special through the years — the spirit of aloha, the warmth, the beauty of Maui. But it’s also an opportunity to give a psychological boost to a community that has been suffering incredibly,” he said. “We want to support the efforts of our Gov. Josh Green, of Maui Mayor Richard Bissen, the state Legislature, the (Maui) County Council — all pulling together in recognizing that this is the industry that is the revenue generator in the state.”

While travel from Hawaii’s core domestic markets continues to decline, recovery is underway for Hawaii’s international markets — albeit not at a level to fully offset the dampening in domestic arrivals.

Tokioka said, “Though it will take time for our economy to recover and grow, we see signs of improvement. The recovery of airlift from Japan and other international destinations is promising, and we saw the passenger count from Japan increase by 84% during the first two months of 2024 compared to the same period a year ago. As we expected, the passenger count from Japan in the first two months of 2024 reached more than 60% of the level from same period in 2019. We are hopeful that this trend will continue for the rest of the year.”

Eric Takahata, managing director for Hawai‘i Tourism Japan, said new campaigns for the market are pivoting away from Malama (take care of Hawaii) core brand messaging of the COVID- 19 and early-post COVID era.

“You’ll see our messaging start to get a little more aggressive and really just concentrating on returning the business as quick as possible,” Takahata said.

He said a campaign called Beautiful Hawaii was launched in October, and another called Yappari Hawai‘i (It’s Got To Be Hawaii) started over the holidays and has continued into the first quarter.

Branding in HTA’s other global markets focused more on the Malama campaign. However, the messaging was more welcoming than during the COVID-era, or in the aftermath of the Aug. 8 Maui wildfires, when government officials and celebrities initially told visitors to stay home.

Jay Talwar, chief marketing officer for Hawai‘i Tourism USA, said, “Our messaging strategy is really two-pronged: It continues to invite visitors to our destination. Show the benefits of a vacation in Hawaii versus other destinations before they’ve made that selection. And, once they have selected to come to Hawaii, share a bit more of the kuleana (responsibility) or education messaging with them pre-arrival.”

Some of the new marketing taglines are: “No filter necessary,” “POV: You’re on your way to Hawaii,” “Fresh Perspectives,” and “Hawaii Cuisine.”

Talwar said the latest social media campaigns, including one interactive creative that replicates the concept of a phone photo library, will come out in March. He added that videos will come out in June as part of the Malama campaign’s next phase.