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I'd think that a lot of the money spent at the hotels in Waikiki immediately leaves Waikiki. The hotels have a staff, but they aren't all that highly paid although the staff's pay would be the part of the hotel money that stays in Hawaii. When the hotels and businesses are owned by folks who don't live in Hawaii, let alone Waikiki, then all those establishments do is suck money out of Hawaii. Folks renting out a room on Air BnB probably do more to keep the money in their local economy than the bigger fancy hotels do.
I've got to disagree with you on several points.
The hotel industry on Oahu pays well - what gives you the impression otherwise? Many positions are unionized - maids make an average of over $30,000, comparable to places like San Francisco.
By far the bulk of the money generated by the hotel industry stays in Hawaii. It isn't just salaries. There are taxes the employees pay - state taxes the hotel pay - taxes the tourists pay not just the hotel taxes - but also all the money they spend in Hawaii. There is construction going on all the time - all generated in Hawaii. I'd say very little money "leaves" Hawaii - and one forgets how recently hotels were losing tens of millions of dollars as recently as 2008 - it all balances out.
Did you know that if Waikiki beach eroded, it would cost the state $2 Billion annually in tourist revenue and cost 6,000 jobs.
First off, they are illegal. But even if you are fine ethically supporting an illegal operation - it creates much higher rents for residents - much higher. You take out all the illegal vacation rentals and airBnB and watch those rents come down, a lot. There are safety issues with a transient population and no regulation. Revenue is lost to state tax revenue. It causes job losses when people don't stay where they are supposed to stay (hotels)
The reality is that the vast majority of hotel revenue goes directly back into the local economy to pay all the expenses of the hotel operation. From salaries and benefits to electric bills, water bills, grounds maintenance, building maintenance, cleaning, new linens, taxes, etc.
And even all the money they spend on other things, like food for the restaurants, has a ripple effect because that money goes to the Hawaii distributor, which then goes to the employees of that company.
In the end, after all expenses and taxes, average hotels in the United States have about a 5% Net Profit margin. Most of that 5% probably leaves the island. But the bulk of he other 95% stays in Hawaii to pay the operating expenses and taxes.
Here is a recent article that talks about hotel operations and profit margins. Again, Net Profit is the profit after all expenses and taxes. Gross profit is not.
The problem is that we are taxing very little on the hotel owners, but yet a lot of taxed monies for the entire island go to pay for all these Waikiki beautification projects of the streets and sidewalks, policing, and events like sunset on the beach. 2 million tourists per year take its toll on infrastructure.
Our government is scared to tax the hotels more for their share of infrastructure maintenance, so we continue to have crappy highway roads and the main reason why public places look dilapidated.
I remember visiting Seattle 10 years ago and paying 17% tax on my hotel bill, 10 years later people are still going to Seattle for vacation.
As for the homeless, they are not people who just ran out of money and have difficulty getting jobs. They are chronic addicts, criminals, mentally imbalanced, socially troubled people, many which were dumped here from the mainland.
Don't forget about the other places that the people staying in those hotel rooms spend their money. I know that when we go there we end up spending more money on food and activities all over Oahu then we do on the hotel we stay in.
The reality is that the vast majority of hotel revenue goes directly back into the local economy to pay all the expenses of the hotel operation. From salaries and benefits to electric bills, water bills, grounds maintenance, building maintenance, cleaning, new linens, taxes, etc.
And even all the money they spend on other things, like food for the restaurants, has a ripple effect because that money goes to the Hawaii distributor, which then goes to the employees of that company.
In the end, after all expenses and taxes, average hotels in the United States have about a 5% Net Profit margin. Most of that 5% probably leaves the island. But the bulk of he other 95% stays in Hawaii to pay the operating expenses and taxes.
WaikikiBoy has a point...If we take the following to be true:
Tourism is the backbone of the Hawaiian economy
Waikiki is the economic engine of the Hawaii
Hotel vacancy rates is a primary economic indicator
Then my question is simple...and it goes back to the title of the thread...since we are having record rates (revenues) why is it not showing on the street (in the middle class)...are we feeling good about the vacancy rate and the associated revenues....but nothing will really change for the majority of taxpayers-the middle class?
but nothing will really change for the majority of taxpayers-the middle class?
Probably not if you don't own a home - Hawaii isn't exactly the kind of place the middle class should expect to be doing well - lets face it, if that were the case - a lot more people would be living here. It makes for a good deterrence. There needs to be something on small islands to discourage people from moving to a tropical island in the middle of the Pacific Ocean.
Probably not if you don't own a home - Hawaii isn't exactly the kind of place the middle class should expect to be doing well - lets face it, if that were the case - a lot more people would be living here. It makes for a good deterrence. There needs to be something on small islands to discourage people from moving to a tropical island in the middle of the Pacific Ocean.
Thanks for the honesty Whtviper1....I think your comments ring true anywhere....the middle class is what is paying for all of the services....but get little in return. This is why we (me) can't see the where that wealth is going. I got a 2% increase this year that went directly into my HOA increase, UH tuition increase..etc.. I am now officially in a higher tax bracket....but earning less!
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