Post-Terrorism Tourism

How did hawaii’s tourism industry react to Sept. 11?

November, 2001

Optimistic visitor projections for Hawaii this holiday season were dashed in the wake of the Sept. 11 terrorist attacks. The state had expected visitor arrivals during the second half of this year to be up 1.5 percent from the first half’s weak showing, state economist Pearl Imada Iboshi says. As visitor numbers to Hawaii plummeted in the chaotic days following the tragedy, it seemed unlikely those expectations would be met. “You just don’t know yet how people will respond,” Iboshi says.

Uncertainty best summed up the feeling that pervaded the hotel industry in the aftermath of the attacks, says Murray Towill, president of the Hawaii Hotel Association. In the ensuing week, most of the association’s 200 members reported hotel occupancy rates of less than 50 percent at a time when statewide rates average about 70 percent.

To help grapple with the situation’s long-term effects, some media drew comparisons to the Persian Gulf War, a conflict that never touched U.S. soil. But analysts indicated that despite similarities between the two situations, Hawaii’s economy now faces a more serious threat than the one posed in 1991.Hawaiian Airlines spokesman Keoni Wagner says visitors from the U.S. mainland and overseas usually make up about 65 percent of the airline’s interisland travelers. Wagner says it was too soon to tell whether local residents’ interisland travel plans would be affected this holiday season. Even confronted with the grim visitor numbers, industry heads and analysts say it was virtually impossible to estimate the impact of the situation on Hawaii tourism, which accounts for 25 percent of the state’s economy.

“The Persian Gulf War experience may provide some insight, but it is not clear how apt the analogy is,” says a Sept. 24 report released by economics professors Carl Bonham and Byron Gangnes of the University of Hawaii Research Organization. “President Bush has promised a protracted “war” on terrorism, which would unsettle consumers and visitors for an extended time period. And unlike the Gulf War, the direct attacks on civil aviation may undermine confidence and willingness to travel in a much more profound way.”

UH economics professor James Mak says the Gulf War comparison should not be completely discounted, as factors that affected tourism in 1991 are issues the visitor industry faces now: lack of consumer confidence in airline safety, the near-term economic prospects and a weak global economy.

In February 1991 – the point during the war when the state confronted its bleakest visitor numbers – arrivals slipped 22 percent from the same time the previous year. But by May of the same year, arrivals had returned to its level of a year earlier, Gangnes says.

“If you have a situation with a dramatic downturn in visitors, you’re going to have to make tough decisions,” Towill says. “But the real issue is what’s the size of the impact and what’s the duration, and those are questions right now that people don’t know the answers to.”


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