(BIVN) – Lawmakers and industry representatives recently heard sobering details on the economic downturn that Hawaiʻi is facing due to the COVID-19 pandemic.
State revenue experts and business leaders presented a troubling forecast during Thursday’s meeting of the House Select Committee on COVID-19 Economic and Financial Preparedness in Honolulu.
Dr. Carl Bonham, the Executive Director of UHERO, said the report that released on March 10 report “is now old news and too optimistic.”
“The baseline forecast called for 7% drop in visitors in 2020, and almost 11% percent drop in spending,” Dr. Bonham said. “Even looking at the data that we see just day to day… that forecast is already too optimistic, and the low scenario that we presented in that report is looking increasingly likely.”
“How long this goes on, really, no one knows,” he said. “The certainty is just enormous in terms of how long the spread continues.”
Bonham said near-term drop in that low scenario “looks like job losses of one-and-a-half percent. It looks like a recession for Hawai’i. It looks like a recession for the US. It means tax revenue growth that’s quite a bit weaker than what the council forecast yesterday.”
“The information that we’re looking at looks like occupancy rates for April, May – if we’re lucky – 50%,” Bonham continued. “We’re talking 30 to 40% drops in occupancy rates. Obviously, we will begin to see the numbers in the labor market right away. We will begin to see reductions in hours, reductions in workforce, layoffs. I think we’ll probably see a little bit of an impact in the initial unemployment claims that are coming out shortly. And as we get into the end of March and April things will deteriorate further.”
Peter Ingram, president and CEO of Hawaiian Airlines said the impact of the global spread of COVID-19 to Hawaii’s economy “will be profound”. He said the forward-looking booking data for coming months has “deteriorated more comprehensively than the current arrivals data on which the [UHERO] analysis was based. In response to weak and worsening demand, it’s reasonable to anticipate that airlines will further reduce schedules in the weeks ahead. It’s impossible to predict the timing and pace of a recovery or how much worse the situation may get before recovery begins. Doing so would require projecting the success of containment and mitigation efforts related to the spread of COVID-19 and the reduction in passenger fear about traveling which is inherently uncertain.”
The House of Representatives created the House Select Committee on COVID-19 Economic and Financial Preparedness in order to help identify the potential and financial impact to the State, develop short-term and long-term mitigation plans, and monitor COVID-19 conditions and outcomes.