Wednesday, August 18, 2010

Tourism Industry: Fact, Action, and Possible Destruction

Fact: Tourism is important to all of us on Oahu but the grim reality is that since the 1996-1998 high, tourism has been at a fairly constant slide, as DBEDT monthly statistics since 1990 show.

The graph above of international arrivals shows that 9/11 and SARS and Iraq war had strong negative impacts. Add to this the weak national economy since 2008 and domestic arrivals also have dropped sharply. See below.

Today's visitors observe a congested, aging and increasingly unappealing Oahu with potholed roads, tired looking parks, and hordes of homeless.

Action is needed now. My vision is to restore the postcard image of Oahu as a great tourist destination by focusing on fixing the infrastructure and maintaining our parks, beaches and tourist attractions. That is real value to the tourist industry and all of us.

The more attractive we are as a visitor destination, the more the hotels can get higher rates and higher quality jobs in the hospitality industry can be had.

Destruction. My opponents in the mayor race will significantly harm Oahu's tourist industry in three ways:

(1) Both advocate rail which is a giant project that will involve 10 years of messy construction to deliver a system that very few will use, according to the city's forecasts. The construction mess and the very ugly all-elevated rail line will be tourism killers for Oahu.

(2) The rail is gigantically expensive so other needs such as dilapidated parks and beaches, homelessness and potholed roads will be under-funded. Thus they will get worse and Oahu's tourist appeal will worsen.

(3) The taxes needed to construct and maintain rail and the sewers add up to $10 billion which means heavy extra taxes. How heavy? The typical sewer bill 15 years from now will be about $2,500 per year plus another $1,000 for rail for each taxpayer.

People in the hospitality industry will find it increasingly difficult to afford to live in Hawaii. Hotels may increase wages and will have to pay higher city taxes. So hotels will have to charge much more for their rooms to offset the costs, thus making a visitation to Hawaii more costly and less competitive.

My competitors' model for "rail jobs" is a long term disaster.

Hawaii's Energy Options

Status quo, Part 1: oil and coal -- Coal will remain affordable for decades (excluding made up carbon taxes). Oil prices will reach $150/barrel again in the future and at anything over $200/barrel using 2010 as a base (barrel under $80) will stress transportation budgets on Oahu, cost of goods, and price of flights.

Status quo, Part 2: burn trash is profitable now and probably still doable at $150 per barrel of oil. Oil is essential to mix with trash for the incineration process. The downside is that about 20% of the trash volume is converted into trash so every five years the pile that needs to be land-filled is as big as one year's worth of land-filled trash.

Other energy from trash: Collect methane from decommissioned trash land fills. This is a remote possibility for the Waimanalo Gulch and the power gain will likely be small.

Geothermal is a great option, very clean, but for the Big Island only. With all the volcanic activity, it makes little sense to burn oil on the Big Island for electricity generation or for other renewable energy installations.

Then there is a host of renewable energy technologies some of which have known risks, costs, reliability and effectiveness. Others are heavily dependent on subsidies to make their cost per mega-Watt (MW) competitive when oil costs less than $150/barrel. The mix that is worth investigating for feasibility, planning and costing in producing electric power includes:
  • photovoltaic (PV) or solar,
  • wind, various technologies,
  • wave, various technologies,
  • biomass, various technologies,
  • nuclear, various sizes, configurations and location options,
  • other less known technologies, some of which appropriate for small scale deployments.
The state needs a detailed 20 and 50 year plan for the four main islands completed by 2012.