Hawaii is a state in crisis that is desperately seeking a 21st century economic identity among the world.

For too long, Hawaii benefitted from and depended on the late Sen. Daniel Inouye’s seniority in the U.S. Senate to steer tax dollars to local projects as a means of economic livelihood. The overall decline of Hawaii today is in many ways a result of this, and in the post-Inouye world, local politicians have tried many schemes to boost the economy, but none have worked too well.

Grandstand as they may over a green economy, high-tech industries, promises of space tourism and a new agricultural revolution, the harder local politicians try to make a new racket in the islands, the more things seem to get worse.

Visitors to Oahu’s Waikiki Beach with Diamond Head in the background.
Visitors love Waikiki Beach but what if there were entertainment districts too? Cory Lum/Civil Beat/2018

The only business that really seems to work reliably for Hawaii throughout the years is tourism, but Hawaii has a love/hate relationship with visitors, in which locals love the money brought by outsiders, but hate the side effects of being flush with people from the world over.

In many ways, Hawaii is beginning to resemble Panama in the late 20th century, where chronic frustration among locals began to fester as GDP growth rates slowed and perceptions developed that the U.S. government was illegally occupying Panama and extracting all the canal wealth for itself. Mass protests, increased crime, drug use and bitter resentment against outsiders – particularly U.S. military service members – raged throughout Panama as their economic situation got worse.

It should be no surprise as our own local economy falters that Hawaii is seeing mass protestsincreased crime and heightened social strife. Nothing causes more upheaval than economic distress. Our policymakers need to acknowledge that things aren’t working in the economy; that our local businesses are spread too thin and taxed too much; and that Hawaii needs to focus on improving the things that work, rather than trying things that don’t.

Tourism in Hawaii works, even in spite of the mistakes made by our state planners, because people all across the world see these islands as an exotic destination where they can have fun and enjoy world-class hospitality.

If we want to stimulate the economy, fund local government and put more money in the hands of Hawaii residents, not only must we court more tourists, but we need to create more alluring activities for them to spend their money on.

The Need For Entertainment Districts 

I get it that there is a push-pull between locals and tourists, and that the last thing many residents want is even more outsiders stomping around and ruining the environment or offending the culture.

One way that the Legislature could address this issue is by creating multiple, special “entertainment districts” across the state as tourist traps subject to special laws, different tax rates, and offering unique goods and services targeted specifically at visitors.

We need to get away from “Fortress Hawaii” which is a state in lockdown where everything’s illegal and nobody is allowed to do anything and transition in light of our tourist advantage to a place where people can have fun and spend money that stays here. Entertainment districts could help accomplish this.

The state could collect more tax revenue by allowing recreational marijuana. Anthony Quintano/Civil Beat

For one, these entertainment districts could permit lotteries, legalized gambling and host hotel casinos, luxury arcades and even racetracks, which would allow Hawaii to become a kind of “Monaco of the Pacific” attracting wealthy visitors from the world over. Visitors in these areas could be taxed at a higher rate than those in the outside counties, because of their ability to pay. This would allow the state to collect higher revenues without regressively slapping taxes on local residents.

These entertainment districts could also permit the sale, use and possession of recreational marijuana within that jurisdiction, which would allow Hawaii to develop a local cannabis industry, and enhance the experience for visitors who want to try it.

Hawaii has great agricultural potential, and it is a shame that local innovators who want to grow and sell cannabis are denied the opportunity to do so. In a special entertainment district, local businesses could make incredible profits selling cannabis products to visitors.

As I have written previously, tourists do not come to Hawaii fantasizing of a place where they will be micromanaged, made to sign cultural oaths and treated like a scourge to the environment. There is already too much of that going on in the world where many of our visitors live. The sole purpose of tourism is escape, which means people are looking for a place to have fun, experience an emotional release and do things they can’t do anywhere else.

Special entertainment districts in Hawaii can be adult playgrounds where adult visitors bring their money, have fun and it becomes win-win for everyone.

If Muslim countries that forbid alcohol consumption and have strict cultural/religious regulations can create special entertainment areas for revenue generation like Kish Island or even parts of Saudi Arabia, one has to wonder why a democratic American state like Hawaii can’t relax some of the laws for the benefit of tourists.

Hawaii needs to stop trying to re-invent the wheel when it comes to economic stimulus. We know that people want to come to Hawaii. We know that people want to enjoy themselves. We are losing billions of dollars in potential revenue to other world destinations that allow gambling, recreational cannabis and other activities to tourists. Let’s seriously consider opening our state to these possibilities and get the economy running again.

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