Experts: 77% of the Hawaiian economy is not tourism; Policy makers can take steps to reopen it
It is unclear when conditions will allow normal economic activity to resume. Two Hawaii experts have outlined a plan for how this could be achieved even before a vaccine against COVID-19 is developed.
The home stay orders that schools and most businesses have closed on the islands will remain in place at least until the end of the month. The development of a vaccine against the novel coronavirus COVID-19 is expected to take even longer, possibly 18 months.
That means the global tourism industry is likely to remain closed for the foreseeable future.
When it comes to Hawaii’s economy, you have to look at it in two categories: tourism and everything else.
University of Hawaii economist Sumner LaCroix says restarting the tourism industry is a much tougher challenge. It depends on millions of people coming to Hawaii from all over the world. Most of these origins, like the continental US, Asia, and Europe, are also struggling with their own epidemics of the novel coronavirus.
Tourism generates around 23% of local economic activity. LaCroix says that losing represents massive success, but also represents a silver lining.
“When that 23% aren’t working, it looks a lot like depression here. On the other hand, there is a lot to be said for getting the other 77% up and running. “
LaCroix recently worked with Tim Brown of the East-West Center to develop a framework for how policymakers could begin resuming local economic activity.
Brown, an infectious disease and behavioral epidemiology expert, said it was important to remember that the current shutdown of non-essential businesses will not solve the problem in the long term.
“The lockdown prevents virus transmission, but it doesn’t create immunity in the community,” Brown said in an interview.
He sets out the problem regulators are facing: how to resume some economic activity while limiting the spread of the virus to a manageable number of cases. According to Brown, it is possible.
“We need to have much more testing capabilities and the ability to do contact tracing in a very effective way,” he said.
With contact tracing, public health investigators can track down anyone an infected person has come into close contact with during their infection. Authorities can then contact these people and instruct them to isolate them or test them for the virus.
A state spokesman said the health department was training medical school residents and nursing students to increase its tracing capacity. LaCroix provides Iceland as an example, which uses police detectives with low numbers of cases as investigators.
An effective testing and tracing program could enable the resumption of the non-tourist economy, which LaCroix points out, accounts for over three-quarters of the Hawaiian economy. This includes what is known as the “spillover economy”, the effect of personal spending by workers employed in the tourism industry.
According to LaCroix, the non-tourism economy is essentially all Hawaiian residents spend money on.
“This economic activity comes from the University of Hawaii, it comes from schools, it comes from people getting medical care, and it comes from people who go to restaurants,” he says as an example.
However, Brown notes that anything that affects large groups of people is likely to be put on hold for the foreseeable future. He cites cinemas and sporting events as examples.
“Anything that includes large groups of people in an enclosed space. Unless you can find a way to make sure people keep their distance in those environments, ”he adds.
Brown says that even if authorities are able to loosen the lockdown, everyone will still have to practice some form of social distancing.
He cited Hong Kong, which has allowed restaurants to reopen but has limited the number of diners who can be present at the same time and is demanding that tables be further than normal from each other. The island has also seen a resurgence of cases as previous restrictions were relaxed.
When it comes to schools, Brown says tighter screening measures must be put in place before they can safely resume normal activity. He suggests that daily temperature checks for everyone entering the building, in addition to testing and contract tracking, could be a way to ensure health and safety.
In terms of tourism, Hawaii’s golden goose, LaCroix writes that the worst-case scenario is a largely stalled travel sector until a vaccine development is expected to take 12-18 months.
LaCroix said a robust testing program both in Hawaii and at the departure locations could allow the state to gradually open up to visitors before departure.
However, he also notes that the recreational path for tourism will depend in large part on the feelings of the would-be travelers. If people feel it is safe to travel then they will, attracted to cheap flights.
When travel is seen as risky and potentially dangerous, people postpone the trip and stay home. But that also offers an opportunity for Hawaii. A well-executed containment program could assume Hawaii has other once popular travel destinations.
“It is possible, but by no means certain, that Hawaii will become a particularly attractive vacation destination later this year if it is one of the first global visitor destinations to have its epidemic under control,” write Brown and LaCroix.
Both have repeatedly stated that while the tourism industry is a significant challenge, local authorities can already take concrete steps that will allow activities to gradually resume in the remaining 77% of the economy while limiting the spread of the virus.