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Hawaii’s 50th Birthday Lost In Wave Of Economic Gloom

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http://business.timesonline.co.uk/tol/busi...icle6804416.ece

Celebrations over Hawaii’s 50th anniversary of statehood will be clouded today by the worst economic crisis in living memory. Its tourism industry, the lifeblood of the islands, has been hit by an unprecedented series of disasters, sending visitor numbers and revenues spiralling down.

For months, sunbathers have been able to choose their spots on the best beaches and diners have found groups of staff waiting to show them to a table. Tax receipts have fallen sharply, leaving the state government struggling with a budget deficit of $800 million (£485 million) for the coming year.

The economic indicators are relentlessly gloomy. Hawaii’s jobless rate, while lower than in many other states, stands at a 31-year high of 7.4 per cent. It is expected to worsen as Linda Lingle, the governor, considers plans to lay off more than 1,000 state workers.

With local government desperate to control spending and the tourism sector in turmoil, Hawaii has no other major economic drivers.

Bankruptcy filings continued at a relentless pace in July, rising 70 per cent on a year ago. David Uchiyama, Hawaii Tourism Authority vice-president of tourism and marketing, said: “We have never gone through a tourism downturn like we have experienced in 2008-2009. There were multiple components piled one on top of each other. I hate to say it, but the only way is up.â€

The crisis began with the near-simultaneous collapse last year of Aloha and ATA, the leading local airlines. Unfavourable exchange rates in Asia, rising fuel prices for airlines and then the general economic collapse combined to hit tourism, particularly from the big markets in Japan and the west coast of America. Hawaii’s economy depends on tourism as its primary industry, with nearly 7 million visiting the islands in 2008.

Business “junkets†to the islands became politically impossible for companies struggling with layoffs. At one point, occupancy rates at the islands’ hotels fell as low as 45 per cent — more than 30 points below the average. Those who did come spent a lot less. Recent figures showed that from January to June this year, spending by visitors who arrived by air dropped to $4.97 billion, down 15 per cent from a year earlier.

Another state facing economic collapse, haven't they heard about borrowing money. Just increase your debt and get growth back, it's easy.

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I'm going there to stay with a friend in a couple of months.

There are some bars on Oahu (especially outside Waikiki) where tourists haven't been so welcome. Good to know that we may be this time.

Maybe you will. I read somewhere that it was the native Hawaiian custom, in times of economic distress, crop failures and the like, to sacrifice strangers to the gods who lived in the volcanoes.

Have a lava time.

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Maybe you will. I read somewhere that it was the native Hawaiian custom, in times of economic distress, crop failures and the like, to sacrifice strangers to the gods who lived in the volcanoes.

Have a lava time.

Sour grapes? I'll send you a postcard (promise!)

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