Hawaii Tourism Faces Downturn with Layoffs and Reduced Hours
Reductions in work hours and layoffs have begun in hawaii’s visitor industry following a weaker-than-expected summer and fall season.
The state Department of business, Economic Progress and tourism reported 806,776 total visitors in august, a 2.6% decline from August 2024 – the second-largest drop of the year after July’s 4.4% decrease.
Keith Vieira, principal of KV and Associates, Hospitality Consulting, noted that july and August, traditionally peak months, fell substantially short of expectations. He cited a poor advance booking pace and the two-year closure of the Hawai’i Convention Center as contributing factors, predicting potential layoffs, particularly impacting small businesses.
Industry leaders attribute the softening market to the Trump management’s tariffs, stricter travel policies, a global economic slowdown, and rising international tensions. Concerns also stem from the convention center closure, reduced state marketing dollars, and challenges at the Hawai’i Tourism Authority resulting in a lack of a cohesive destination marketing plan. The recent government shutdown and prior restrictions on state credit card use are expected to further reduce government travel.
Jerry Gibson, president of the Hawai’i Hotel Alliance, described the current situation as the worst downturn outside of the COVID-19 pandemic as the 2008 financial crisis, which also saw the collapse of Aloha Airlines and the loss of two cruise ships.
The University of Hawaii Economic Research Association (UHERO) reported a seasonally adjusted 8% drop in visitor arrivals between April and July. UHERO forecasts arrivals will be approximately 5% lower than last year by mid-2026, leading to a real visitor spending decline exceeding $600 million.
UHERO also indicated that hawaii’s payroll job growth has stalled since March, with current employment levels roughly 15,000 jobs below pre-pandemic figures, and multiple sectors are now contracting, led by federal job losses and declines in tourism.
Hawaii Tourism Faces Headwinds Despite Increased Spending
Hawaii’s tourism industry is navigating a complex landscape of increased visitor spending offset by rising costs and upcoming challenges, according to recent reports and industry leaders. While visitor expenditures reached $1.72 billion in August, a 3% increase compared to August 2023 [https://www.hawaiitourismauthority.org/news/2024/09/05/hawaiis-visitor-arrivals-and-expenditures-august-2024/],concerns are mounting over potential downturns due to factors like the closure of the Hawaii Convention Center and the loss of major events.
The Hawaii Convention Center is slated to close around June 30, 2025, following the loss of its contract with the Airlines Committee of Hawaii Inc. While the Hawaii Tourism authority (HTA) aims to retain the center’s 125 employees [https://www.staradvertiser.com/2024/09/27/hawaii-news/hawaii-convention-center-to-close-next-year/], hotel banquet staff are anticipated to experience significant losses due to the reduction in group business.
Despite these concerns,overall visitor spending remains positive. In the first eight months of 2025, total visitor spending reached $14.62 billion, a 4.5% increase from the same period in 2024 and a 21.3% increase compared to 2019 [https://www.hawaiitourismauthority.org/news/2024/09/05/hawaiis-visitor-arrivals-and-expenditures-august-2024/]. However, industry representatives emphasize that these gains are not necessarily translating into increased profitability.
Josh Hargrove,general manager of the westin Maui Resort & Spa,noted substantial price increases across the board,making it “hard to continue to run the same profitability.”
August saw a decrease in visitor arrivals from key markets including the U.S. West, U.S. East, Canada, and other international locations. Arrivals from Japan, Hawaii’s largest international market, remained flat compared to August 2023, benefiting from the Obon travel season.
Island performance varied. Oahu experienced a 4.2% decline in arrivals, Hawaii Island saw a 4.1% decrease, and Lanai’s arrivals dropped by 1.1%. Conversely, Molokai saw a 13% increase, Kauai experienced a 3.2% rise, and Maui’s arrivals increased by 2.3%.
Maui, still recovering from the devastating wildfires of August 8, 2023, faces particular challenges. Hotel occupancy rates currently hover around 65%,below the preferred range of 75-80% [https://www.staradvertiser.com/2024/09/27/hawaii-news/hawaii-convention-center-to-close-next-year/]. The closure of the Hawaii Convention Center is expected to exacerbate these issues, as convention attendees typically extend their trips by an average of 3.5 days, frequently enough visiting neighboring islands.
Further compounding Maui’s difficulties is the relocation of The Sentry golf tournament, traditionally the opening event of the PGA Tour, due to ongoing drought conditions and related challenges at the Kapalua Golf Plantation Course [https://www.pgatour.com/news/2024/09/26/the-sentry-to-move-from-kapalua-in-2025-due-to-drought-conditions.html].
“It’s definitely a tough year,and it could be one of the more tough years that we’ve seen in a long time,” Hargrove stated,urging the state to invest in addressing these challenges proactively.