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Maui's struggle following the Aug. 8 wildfires is expected to continue to weigh on Hawaii's overall economy this year, even as 9.8 million visitors are forecast statewide.
While Maui's tragic wildfires will continue to be the focus of discussions about the state's future, 2024 is also expected to bring more ceiling tours and stations on track as Skyline construction moves into the city and the acquisition of Hawaiian Airlines by Alaska Airlines This represents one of the largest business deals on the island in years.
It's a big political year, and state officials are already grappling with online conspiracy theories ahead of November's election, a likely rematch between President Joe Biden and former President Donald Trump.
Given Hawaii's historically low voter turnout, the 2020 Biden-Trump race resulted in a now-record turnout of 69.6% of registered voters casting a ballot. By comparison, Hawaii voters reverted to apathy in the 2022 non-presidential general election, with only 48.7% of registered voters bothering to cast their ballots.
State policy in 2024 will likely remain focused on finding solutions to Hawaii's chronic lack of affordable housing, but after the Maui disaster and the ongoing threat of future wildfires, hurricanes, volcanic eruptions and tsunamis, Gov Josh Green's proposed budget includes $1.5 billion in the Rainy Day Fund, with a reserve of $827 million for 2024 and more than $750 million for 2025.
Economic outlook
The economic situation will play a major role in 2024.
The number of visitors to Maui by air was expected to fall by 17.8% in 2023, and the University of Hawaii Economic Research Organization predicts the number of air passengers to the Valley Isle will fall by another 9 this year .6% will decline.
On an island that relies on business from convention attendees and their families, convention bookings have already been canceled for the first six months of the year.
Also crucial to Maui's post-fire recovery will be how successful the county, governor and Federal Emergency Management Agency are in persuading owners of 3,000 short-term vacation rentals to take advantage of property tax exemptions and above-market rental rates to long-term rentals for 3,000 families still living in hotels on Maui.
The plan would both free up hotel rooms for visitors to West Maui and provide fire survivors with housing for the next phase of their lives for at least the next year.
The uncertainty of finding long-term housing for survivors means Maui's “road to recovery will be long and there is significant uncertainty about how it will proceed,” according to UHERO.
Unlike Maui, economists are seeing signs of economic optimism.
Japan's coveted travel market collapsed when the COVID-19 pandemic broke out in 2020 and has struggled to recover due to travel restrictions and the strength of the U.S. dollar against the yen.
But in 2024, the state Ministry of Economy, Economic Development and Tourism expects a 73.7% increase in Japanese travel in the first six months compared to the same period in 2023, which is “promising, considering the Current status of airline seats from Japan is “60% of 2019 capacity,” DBEDT said.
More rail construction
The Honolulu Authority for Rapid Transportation plans to build 5.2 miles of overhead line and four additional stations in 2024: at Joint Base Pearl Harbor-Hickam, Daniel K. Inouye International Airport, Lagoon Drive and Middle Street.
HART plans to have trains running on the new segment as early as February to test its systems, but ridership is not expected on the second stage until 2025.
The second phase of construction should be substantially complete by March, Lori Kahikina, executive director and CEO of HART, told the Honolulu Star-Advertiser.
In early January, the City Council is expected to consider approving an updated full-funding agreement between the city and the Federal Transit Administration to shorten the original route by nearly three miles and two stations and instead end at the so-called Kakaako Civic Center.
The original 2012 plan called for building a 20-mile, 21-station route from East Kapolei to Ala Moana Center.
The new route requires only 19 stations and 18.75 miles of track.
Cutting the route to save money on the $9.8 billion project was Mayor Rick Blangiardi's idea and allowed the first stage to open on June 30.
If the council approves, Blangiardi's signing of the full funding agreement may also free up $125 million in federal funding for HART in March.
“HART has not received funding since 2017,” Kahikina said.
Then in the fall, Kahikina hopes to award a contract to build the Civic Center roadway and train station, freeing up another $250 million from the free trade agreement.
Blangiardi has repeatedly said he hopes to build the railroad further into Kapolei and uptown to his alma mater, the University of Hawaii.
Hawaiian Airlines
Sometime in early 2024, shareholders of Hawaiian Holdings Inc. — the parent company of Hawaiian Airlines — could vote on whether to sell the airline.
The purchase plan involves assuming $900 million of Hawaiian Airlines' debt and paying shareholders $18 per share.
The $1.9 billion deal was announced on December 3 and is subject to regulatory approval, which is expected in the following 12 to 18 months. In this case, Alaska Air Group Inc. could become the new owner of Hawaiian Airlines in late 2024 or mid-2025.
Alaska Air intends to continue operating Hawaiian Airlines from Hawaii under the same long-standing name with the vast majority of existing employees while maintaining Alaska Airlines operations.
Hawaiian Airlines was founded in 1929 and employs nearly 7,300 people.
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