Growing a local economy when the state and national outlook remains so messy can make for a cluttered office, which was the case one afternoon late last week for George Costa, director of the Kaua‘i County Office of Economic Development.
Growing a local economy when the state and national outlook remains so messy can make for a cluttered office, which was the case one afternoon late last week for George Costa, director of the Kaua‘i County Office of Economic Development.
He apologized for the stacks of reports that had migrated from over-full shelves to rows laid out on the floor.
The reports outline proposals for growing energy, agriculture and film sectors and include the latest projections for tourism.
“We don’t have manufacturing. It just costs too much to get raw materials here and to export,” Costa said.
“We need to face reality. The visitor industry is our main economic engine,” he said. “We need to keep the economic engine running, then focus on diversification.”
Diversification means energy, film, agriculture “and, to some degree, health and wellness,” he said.
Small businesses and would-be entrepreneurs can respond to emerging trends in those sectors, he added.
“You see so many cottage industries catering to tourism. I’ve never seen so many surf schools and kayak schools. Our visitors come here for the outdoors,” Costa said.
“Apparel shops have popped up, too. Little Hanalei has all these shops and restaurants,” he said. “I think there’s room for more. People are always looking for something different.”
Another big picture trend that could prove promising for older entrepreneurs is the heightened focus on promoting Hawaiian culture in addition to the island’s famous scenery.
Tourists want to learn more about Hawaiian culture and history, Costa said.
Costa said one possible approach “is to bring our kupuna together and document their experiences” and then “see how we can incorporate that into the hotel and visitor industry so visitors become exposed to that,” he said. “Our kupuna are great resources.”
Local festivals and events also have served as springboards to start or grow businesses, he said. He has witnessed local residents become event promoters or open photography studios after starting out as festival participants.
When it comes to the construction business, the focus will probably be more on renovation than building starts on an island with an average hotel occupancy rate of 60 percent.
“It makes developers think twice if hotels are 60 percent full,” he said. What some hotels need, especially on the Eastside, where the island’s tourism industry began, is renovation, Costa said.
Costa said hotel occupancy rates are misleading on Kaua‘i, which is why he said he keeps focused on visitor arrivals versus hotel room counts alone.
When it comes to renting rooms, hotels only make up 22 percent of the picture. Time-share properties make up 28 percent of the share, while vacation rentals make up about 25 percent of the short-term rental picture, he said.
“I would guess time-shares are at 90 percent occupancy,” he said, but added that a survey is needed to learn the occupancy rate of vacation rentals.
Film is a growth industry “because of our natural beauty,” he said. “The film industry loves working with Kaua‘i’s people.”
Agriculture is a matter of “how can Kaua‘i grow its own sustainability,” Costa said. “There’s a premium to buying local, but the money stays on the island.” The challenge is how to make locally grown produce “viable,” he said.
One potential area for growth is the once productive papaya industry. “It wasn’t self-sustaining. Now it’s ready to go,” he said about efforts to revive the sector.
Costa said the health and wellness industry can also grow on Kaua‘i. “Kaua‘i in some circles is known as the healthy place,” he said.
Kaua‘i Community College already is capitalizing on the sector with a massage curriculum on an island with a growing number of health spas.
“Networking is definitely important,” he said, regardless of the sector.
KCC also offered photovoltaic industry training classes last year in partnership with the Kaua‘i Workforce Investment Board.
“I can see photovoltaic companies growing on this island,” Costa said.
The challenge to developing any alternative energy “is so many endangered species,” he said, but he’s a fan of hydroelectric energy development. “For energy, hydro is Kaua‘i’s answer.”
A focus on developing less expensive energy resources ultimately will help make the cost of doing business more affordable for businesses on Kaua‘i of any size, he said.
