Understanding the economic impact of the Maui fires

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Lahaina's Best Western Pioneer Inn was one of the hotels destroyed by wildfires in Maui.
Lahaina's Best Western Pioneer Inn was one of the hotels destroyed by wildfires in Maui. Photo Credit: Jeff Whyte/Shutterstock.com
Christine Hitt
Christine Hitt

On Thursday, professors and researchers at the Economic Research Organization at the University of Hawaii (Uhero) released a lengthy special report addressing the Maui wildfires and the economic road ahead. The report summarizes all the recovery issues, including tourism, housing, health and education, as the group works to dive deeper into these issues for months to come. 

The impact on tourism, of course, has been great. Uhero believes it could take years for visitor numbers to return to where they were before the fires and calls for a specialized marketing campaign for Maui to happen right now.

Since the devastating fires, the number of visitors to Maui has dropped by about three-quarters, impacting businesses and employees all over Maui. "With about $270 daily spending per visitor to Maui, the loss of revenue adds up to more than $13 million per day," Uhero states. 

The loss of homes and businesses in Lahaina are immense. "Among the destroyed buildings were visitor accommodations and short-term vacation rentals that provided roughly 1,500 rooms; these rooms normally accommodated about 4,000 tourists," the reports states. "Businesses in Lahaina generated more than $70 million per month in revenue in accommodation, food services, retail sales and other categories, and they employed about 8,500 individuals."

These economic impacts are not just confined to Lahaina, but also to other parts of West Maui, which is closed for visitors. The towns of Lahaina, Kaanapali, Kapalua and Napili supply more than 10,000 hotel rooms, timeshares and vacation rentals, the report states. Fires in Upcountry Maui also destroyed structures and damaged agricultural land -- that affects the economy as well. 

Like a chain reaction, the decreased tourist spending impacts the hotels, tours, their employees and other local businesses. Uhero expects the rate of unemployment to "jump to as high as 10% in coming months before visitor spending returns." The Transient Accommodations Tax revenue is also expected to be down about $5 million per month for Maui County.

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