Hawaii’s economy is rebounding more quickly than expected, as growing visitor arrivals have helped drive a growing labor market and tax collections, state officials reported on Tuesday.

In its Statistical and Economic Report for the first quarter of 2022, the Department of Business, Economic Development and Tourism raised its economic growth forecast for 2022 by one-fifth of a percentage point from 3.0% projected in the fourth quarter 2021 to 3.2%.

The department cited the U.S. Bureau of Economic Analysis’ data on Hawaii gross domestic product, which showed that, after a steep drop in 2020, the state’s economy grew by 3.2% during the first three quarters of 2021. DBEDT expects that the economic growth for 2021 will end up at 3.8% when data for the full year is released.

Perhaps the most striking statistic involved domestic passenger arrivals. In 2021, the number of U.S. mainland visitors in 2021 rose to nearly pre-pandemic levels, when Hawaii set a record of more than 10 million visitors in 2019. Altogether, the domestic market bounced back to 94% of the 2019 level, the department said. What’s more, DBEDT reported the U.S. visitors in 2021 stayed longer and spent more than in 2019.

The problem is international travel has barely rebounded at all. The result: total visitor arrivals totaled 6.8 million in 2021, about 65.3% of the level of 2019, and visitor spending reached $13.0 billion, DBEDT reported.

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