Tuesday, March 24, 2009

REPORT ON WEST HAWAII COUNTY'S ECONOMY

We spent three days in Kona and West Hawaii last week, which turned out to be good timing due to the wind change sending the vog (volcanic gasses) east to Hilo rather than its normal direction toward Kona. The air was the clearest we have seen in Kona in over a year and the weather was glorious. One of our objectives was to visit the new shopping malls on the west side of the island and with all the reports of low hotel occupancy rates we were expecting them to be deserted.

The first mall we visited was the Shops at Mauna Lani. The mall was a lot bigger than we expected and had lots of interesting new stores. We hadn’t seen Peter Lik Fine Art Photography before and were impressed with the beauty and illumination of the photos. The Tommy Bahama Emporium has a café above it which looked great and we plan to try it out next time we are in the area. We were pleased to see that signs and menus were in English and Japanese, something we think needs to happen all around the island. There was a huge gourmet grocery store, Foodland Farms, allowing visitors staying in condos and timeshares access to groceries just a short distance away. The mall wasn’t bustling with people, but we were there at 10 AM, before the lunch crowd.


Our next stop was the Queen’s MarketPlace mall in Waikola. This new mall has enough stores now to be interesting and we were eager to try out the recently opened Romano’s Macaroni Grill. The food and service were great and the prices were reasonable compared to food prices in Waikoloa (although they would be considered expensive for Hilo). We were surprised at the large crowd in the mall and Macaroni Grill was full at noon on a Friday.

Next we headed on to Kailua Kona and went to the new mall Kona Commons. It was so crowded that we couldn’t find a place to park, so we gave up. Kona Commons has a PetCo, Office Max, and Sports Authority. A huge Target store is planned to be opened across the street in July, which fortunately has a huge parking lot. This part of Kailua may become a retail magnet. We were pleased that the main roadway into Kailua from the airport was finally free of roadwork with all the lanes open up to first turn into Kailua, which allowed us to easily drive into town without the normal maddening congestion and stop and go traffic.
We stayed at our favorite place in town, the Kona Islander Inn. Room #126 has two Queen beds with a view of the pool and rents for $79.95 a night (less if you stay longer). The pool and hot tub were packed with folks enjoying the sun and cooking on the community barbeque. The beach across from the Islander had all the debris that cleaned off and families were playing on the sand and wading in the tide pools.

Ali’i drive was loaded with cars and people were abundant shopping in the stores and eating in the restaurants at Coconut Grove Marketplace. We went to our favorite Japanese restaurant, Bistro Yokohama, and we tried out the new Mexican restaurant, La Cala, that has taken over the old Rios spot.

Though there were a lot of empty store fronts, those that remained seem to be doing well. We noticed a lot more catering to Japanese visitors which we think will help make Hawaii a better experience for them; the ABC store even accepts Yen now.


We didn’t see nearly as many For Sale signs along Ali’I drive as we did last summer and we met several couples at the Kona Islander that had just bought units and were fixing them up. Though there have been a lot of complaints about the Vog during the last 10 months, there certainly was not a depressed feeling in Kona.


On our return to Hilo we stopped at the Hilton in Waikoloa for a fish sandwich at the café overlooking the Dolphin Quest. The parking lot was jammed with cars. The swimming pool area was filled with people as was Hilton’s lagoon beach. The Dolphin area had been expanded and the café had many more seats, most of which were taken. We wondered if all the people on the Hilton grounds were folks staying in nearby time shares and condos. Perhaps they were enjoying the Hilton’s disneyland-like boat and train rides or perhaps buying day passes to use the Hilton’s swimming pools.




We drove back to Hilo over the vastly improved and freshly paved Saddle road. It is now an easy and fast drive between West Hawaii and East Hawaii, making both sides of the island easily accessible for tourists and residents.



Now back in Hilo, we are wondering why the hotels and malls in west Hawaii we visited were so crowded? We have heard so much news about the lower number of tourists and the low occupancy rates. Our experience motivated us to look more closely at the statistics.

Here is a chart of visitors to Hawaii county over the past five years.

The major uptick in visitors to the Big Island started in 2005. The number of visitors in January 2009 is actually up almost 10,000 visitors from January 2004. But check out the occupancy rates between those two years.

In 2004, the January occupancy rate for the Kohala Coast was 73.5% but in 2009, during the same month, the occupancy rate was 56.5%. That can only indicate that a huge number of new hotel rooms, time shares and condos have become available over the past 5 years. During the same 5 year period the population of the Big Island has increased almost 10%, by 15,919. The combination of new rentals and new residents may be the reason for the packed parking lots and busy malls.

Though many tourist businesses have gone bankrupt over the last year, businesses that provide great value in good locations appear to be doing fine even during this economic contraction. We were delighted to find happy tourists in west Hawaii having a great time on their vacation. We hope this trend continues and that the tourist business thrives on the Big Island.

Sources
County of Hawaii statistics

State of Hawaii population statistics

12 comments:

Blake said...
This comment has been removed by the author.
Blake said...

Nice post. Out recent trip left us wondering "the economy is bad.. really?". Everything was packed and had lines. We found nothing that said bad economy really besides every other house we saw had a for sale sign. Are we such suckas that we just buy into what we are told and panic?

We're starting to think conspiracy but that is another subject for another post another day.

Dave Smith said...

The disparity between the visitor numbers and occupancy is most likely attributed to the temporary influx of cruise ship passengers.

mdd said...

"In 2004, the January occupancy rate for the Kohala Coast was 73.5% but in 2009, during the same month, the occupancy rate was 56.5%. That can only indicate that a huge number of new hotel rooms, time shares and condos have become available over the past 5 years. During the same 5 year period the population of the Big Island has increased almost 10%, by 15,919. The combination of new rentals and new residents may be the reason for the packed parking lots and busy malls."

Dead on accurate.

Think of how many new condos and town houses have gone up in the last 5 years! It is astounding! I also think that the BI gets a different class of tourist than Oahu or Maui. The BI gets more families. The others tend to get more couples and singles.

Aaron Stene said...

West Hawaii County ?

Anonymous said...

I enjoy reading your blog a lot. It is worth noting that while the retail shops like Kona Commons are busy, many other businesses are failing. I work in Waikoloa, and there have been major layoffs due to lower occupancy. Of course nobody wants to publicise that fact. And there are many vacant condos on the coast; did you drive by Mauna Lani's condos that are nearly totally vacant? Watch the number of foreclosures there where they built the past few years. We have noticed an improvement the past few weeks here, but having worked in Waikoloa a decade, things are the worst occupancy wise for hotels that I've seen. The Kohala occupancy rate at places like Mauna Lani are more in the 30-40% range; I stayed at the Marriot a couple weekends ago and I'd wager it was at 25 or lower. The bright spot? Timeshares: the Kohala timeshares are at 95% occupancy year round because Hawaii is the most highly demanded timeshare destination. Keep up the great work with your blog! aloha :)

mandy said...

It makes sense that Mauna Lani and other traditional hotels will have lower occupancy rates because there are so many condos available now. I think people are opting for a kitchen, etc. We visited relatives staying at one of the Four Season condos and it was terrific for a family with small children.

Steve said...

A couple things... it's tough to judge how busy it is all over by a one day visit. The 2nd through 4th weeks of March are "spring break" times for the bulk of the country and are typically very busy (this year is down from what I've seen) in Kona compared to February through early June.

The Mauna Lani mall? The picture you showed is about typical of the foot traffic I've seen, only been there maybe 5 times, but have been there lunchtime, mid-day and dinner time and never seen more than a few to maybe a dozen people looking around. The Queen's shops were very busy back on the 4th of July before the EWF concert, but other than that not very busy the times I've been there. None of the shops in these malls are much over two years old, if that, and most are chains, few have had time to go out of business yet, but apparently a couple are or are cutting hours.

Kona's a touristy area and looks it compared to the Hilo side, but it's by no means doing well at this point. Ali'i drive reminds me much more of 1999 foot traffic (I worked down there then) than 2005/2006 traffic.

Just another viewpoint, keep up the good work the the blog.

Aloha,

Steve

Keahi Pelayo said...

Thanks for the insight and detail. Just remember it is darkest before the dawn.
Aloha,
Keahi

Punkin said...

My husband and I are moving to the Hilo area fairly soon and I'm happy to see that this blog is upbeat about the area. I'm sure the economy will improve soon, although it WILL be slow. I'm looking forward to helping it in the laidback atmosphere of the Windward side rather than the Kona side!

Blogger said...

Are you monetizing your exclusive file uploads?
Did you know that AdscendMedia will pay you an average of $0.50 per uploaded file download?

Blogger said...

Did you know that that you can make dollars by locking selected sections of your blog or site?
To begin you need to open an account on AdWorkMedia and use their content locking tool.