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Hawai'i Tourism Recovery Slowed Until 2028: UHERO

  //humor-quirks.news-articles.net/content/2026/02 .. -i-tourism-recovery-slowed-until-2028-uhero.html
  Published in Humor and Quirks on Friday, February 27th 2026 at 23:39 GMT by KITV
      Locales: Hawaii, UNITED STATES

HONOLULU, Hawai?i - February 28th, 2026 - A new economic forecast released today by the University of Hawai?i Economic Research Organization (UHERO) paints a cautiously optimistic, yet challenging, picture for Hawai?i's key industries: tourism and the businesses that support it. While a rebound in visitor spending is anticipated, the report projects a significantly slower recovery than previously observed, with a return to pre-pandemic levels not expected until 2028. This extended timeline presents ongoing difficulties for businesses heavily reliant on tourism revenue and exacerbates existing economic pressures within the state.

Dr. Chris Holman, a UHERO economist, detailed the findings, emphasizing the confluence of factors impacting the recovery. "The numbers suggest that visitor spending is going to be slower to recover than what we saw in the past few years," he stated. This slowdown isn't due to a lack of demand for Hawai?i as a destination, but rather a broader economic climate characterized by persistent inflation, climbing interest rates, and the looming threat of a recession on the U.S. mainland.

The mainland recession risk is a critical component of UHERO's forecast. Should the U.S. economy contract, discretionary spending - of which travel is a significant portion - will undoubtedly decline. "If the U.S. economy goes into recession, that's going to impact visitor spending," Holman explained. "People have less discretionary income, so they're less likely to spend money on travel." This anticipated drop in spending power translates directly to reduced revenue for Hawai?i's tourism sector, slowing the recovery of hotels, restaurants, and tour operators.

The report highlights that while leisure travel is demonstrating some positive signs, the gains are not substantial enough to offset the economic headwinds. Many businesses, even those currently operating, will continue to grapple with reduced margins and financial instability. This extends beyond the traditionally tourism-facing sectors. Businesses supplying goods and services to the tourism industry - agriculture, transportation, and even retail - are also expected to feel the pinch. The delayed recovery timeline forces businesses to make difficult decisions regarding staffing, investment, and long-term planning.

Beyond the macro-economic factors, UHERO's forecast also addresses two deeply entrenched issues facing Hawai?i: chronic labor shortages and the state's notoriously high housing costs. These aren't new problems, but they are significantly amplified in the context of a slower economic recovery. The tourism industry traditionally relies on a large workforce, and the ongoing labor shortage makes it difficult to meet demand even as visitor numbers increase modestly. This forces businesses to increase wages, contributing to inflationary pressures and further squeezing margins.

The high cost of housing continues to be a major deterrent for attracting and retaining workers, particularly those in lower-paying tourism-related jobs. Many employees are forced to commute long distances or live in overcrowded conditions, impacting their quality of life and contributing to workforce instability. This creates a vicious cycle, hindering the industry's ability to fully capitalize on any increase in tourism activity.

Looking ahead, UHERO recommends a multifaceted approach to mitigate the risks and accelerate the recovery. This includes strategic investment in workforce development programs, initiatives to address the housing crisis, and diversification of the economy to reduce reliance on tourism. The forecast suggests that focusing solely on attracting more visitors is insufficient; instead, Hawai?i must prioritize sustainable tourism practices and cultivate industries that offer long-term economic stability.

The complete UHERO forecast, providing detailed data and analysis, is available for review at [ https://www.uhero.hawaii.edu/expenditure-projections/ ]. This resource provides a deeper understanding of the challenges and opportunities facing Hawai?i's economy and serves as a valuable tool for policymakers, business leaders, and residents alike as the state navigates a complex economic landscape.