Maui’s economy was recovering from the pandemic. Wildfires are dealing a shattering blow

By Nathaniel Meyersohn and Ellie Stevens, CNN

New York (CNN) — The catastrophic wildfires in Maui have destroyed homes, churches, businesses and key cultural sites on Hawaii’s second-largest island. At least 36 people have died.

The fires also threaten to derail Maui’s economy, just as it was rebounding from the pandemic.

Maui’s economy depends heavily on tourists visiting from the mainland United States, Japan, Canada and other countries. Maui is the second-most visited Hawaiian island after Oahu, and 1.5 million people visited Maui during the first half of this year, a 6% increase from the same period last year, according to the Hawaii Tourism Authority.

Maui authorities have asked tourists to leave the island and strongly discouraged nonessential travel to Maui.

It could take months to fully assess the economic impact of the wildfires. But tourism is the lifeblood of Maui’s economy, around 80% of which is generated by visitors spending their money on the island. That means $4 of every $5 the island generates comes directly or indirectly from tourism, according to the Maui Economic Development Board.

Tourism “touches every aspect” of Maui and is “irrefutably the ‘economic engine’” of the island, the agency says.

The industry accounts for 75% of all private-sector jobs in Maui. Tourist-oriented businesses — accommodation and food services, including arts and entertainment — make up the largest share of those jobs.

Maui charges some of the highest hotel and resort rates and occupancies in Hawaii. Local government uses taxes on those hotels to reinvest in supporting industries that depend on tourism.

The devastation from the wildfires could have a long-lasting impact on Maui’s economy, which had just begun to rebound from the pandemic. Tourism and spending in Maui was trending above its pre-pandemic levels this year, and the island was becoming a more significant part of Hawaii’s economy.

In 2019, 3.1 million people visited Maui. But that figure plunged to 793,000 during the height of the pandemic in 2020, according to the Maui Economic Development Board.

A year later, 2.3 million people visited Maui. Last year, the number reached 2.9 million.

Tourists had also been spending more money when they visited Maui.

For the first half of 2023, total visitor spending was $3.5 billion, a 25% jump from the same time last year and a 33% increase from 2019.

But travel in the coming weeks to Maui will come to a halt. The Hawaii Tourism Authority is urging those scheduled to come to Maui in the coming weeks to reschedule their travel plans.

And some hotels, like the century-old Best Western Pioneer Inn in Lahaina, have burned down.

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