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Hawaii may lose over $200 million in tourism due to volcano eruption

Staff Writer |
The cumulative expenditure loss to the tourism of Hawaii's Big Island inflicted by the Kilauea volcano eruption may turn out to be as high as approximately $200 million, a study found.

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According to the latest study emailed to Xinhua on Saturday from Dr. Mark Kimura, an affiliate faculty member of the Department of Geography and Environmental Science at the University of Hawaii at Hilo, the Big Island may have already lost 38,000 potential visitors and around 50 million dollars in potential tourism expenditure in May and June.

"Tourism has seasonality and cycles, so rather than comparing the current numbers to previous months, year-on-year growth rates are more helpful. The year-on-year growth of monthly visitors to the Big Island was minus 2 percent in May and minus 5 percent in June. Since Hawaii's tourism has been growing steadily, this is clearly unusual," wrote Kimura.

The Big Island of Hawaii may have lost 17,000 potential visitors and $22.7 million in potential tourism expenditure in May and 21,000 potential visitors and $27.5 million in potential tourism expenditure in June, the peak month of the loss.

"The 200 million dollars loss is the estimate based on the assumption that the recovery had already started, which is most likely not true," Kimura told Xinhua.

"It's just the expenditure by the tourists. And there's usually a 'ripple effect,'" he said.

"If tourism related businesses lose their revenue, then their suppliers lose theirs too. If their employees lose their jobs, they'll reduce their consumption of local goods and services. That might affect even the local businesses for basic goods and services, which may not be related to tourism." Kimura noted.

Kimura compared the current eruption to Hurricane Iniki, saying the recovery process takes time even if the natural event ended today.

Hurricane Iniki was the most powerful hurricane to strike the U.S. state of Hawaii in recorded history. It caused around $3.1 billion of damage and six deaths in 1992.

As Kilauea is still erupting and damage is still being done, the island may lose 20,000 potential visitors and $25 million in potential tourism expenditure each month on average.

Kimura noted that the state of Hawaii as a whole is doing just fine and it's exactly where it should be.

"This gives us hopes for the Big Island as well...we just have to make sure the tourists are coming to the island too," he wrote.

Meanwhile, George D. Szigeti, president and CEO of the Hawaii Tourism Authority, noted "Hawaii's tourism industry did extremely well in the first half of 2018 in all key categories."

According to Hawaii's Visitor Statistics Results for the First Half and June 2018 which was released by the Hawaii Tourism Authority on Wednesday, the Big Island recorded a slight drop in visitor spending (minus 0.9 percent to $194.3 million) and decreased arrivals (minus 4.8 percent to 149,817) compared to a year ago.

Kilauea's eruption has prompted closure of two-thirds of the Hawaii Volcanoes National Park in the Big Island. Hundreds of homes in the Big Island have been destroyed by lava from Kilauea, which has been erupting nearly continuously since early May. The volcano is one of the youngest and most active volcanoes in the world.

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