If you skim the headlines, Hawaiʻi’s economy looks like it is warming up. DBEDT just raised its 2025 growth forecast to 1.6 percent, visitor spending in October jumped seven percent, and Japanese arrivals were up sixteen percent year over year, though still about 45 percent below 2019. All good news on paper.
Step away from the headlines, and the picture becomes clearer. Year-to-date hotel performance is essentially flat statewide. Occupancy and ADR are largely flat, and RevPAR only looks healthy if you happen to own a luxury resort. Maui’s room revenue remains seventeen percent below 2022 levels, Oʻahu is down three percent, and midscale and upscale properties are taking the brunt of it.
This is where the forecasts split. DBEDT sees modest growth, while UHERO is calling for a mild recession in 2026, driven by softer tourism, rising prices, and a weakening job market. Visitor arrivals are expected to dip again before conditions improve later next year.
So which version is real? Both? Hawaiʻi is getting a lift from higher spending and a slowly recovering Japan market, but the broader outlook still points to modest to flat growth, not a surge. Add rising insurance, utilities, shipping, and labor costs, loans that may need to be refinanced at higher rates, and it is easy to see why some are worried.
