Tourism in Kailua: Exploring Horizons

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Tourism has numerous economic, social, cultural and political benefits. The economic benefits of tourism include job creation, increased revenues for the government, a market for the locally produced goods, and a positive balance of payments as well as foreign exchange earnings. As a result of the numerous economic advantages of tourism, the community and the government have failed to focus on the negative side of tourism. For example, tourism increase congestion in the tourist attraction sites, seasonal employment as well as increase in the level of inflation in a particular country or regions. The level of Tourism in Kailua have increased in the recent past with more and more tourists visiting the regions. The results of the increased level of tourism in the region have been more economic challenges that benefits. The cost of living in Hawaii have increased in the recent past and is projected to continue increasing in the next 20 years is the condition does not change. Tourism in Kailua have resulted in increased tourism, and therefore there is need to control the level of tourism as well as prices to offset the economic challenges as a result of the level of tourism.

The basic law of demand indicates that increase in demand for any particular good will increase the prices of the particular good or services. Therefore, increase in demand for goods and services by the tourism sector may result in increased prices for such products. The challenges in that the prices are not discriminatory and therefore will affect even the residents of the regions. The increase in the cost of living as indicated by the increase in prices of houses as well as other consumer goods has been evident in many regions of the world. One of the regions in the United States that have been affected by the influx of tourists is Hawaii. Increase in the number of Tourism in Kailua, as well as other tourist attraction destinations in Hawaii, has resulted in more economic challenges that benefit as noted by Pratt (374).

The issue of cost of living as noted by Eagle (2) has been around in Kailua and Hawaii since the 1990s. The increase in the cost of living which can be defined as inflation in economic terms have been as a result of increased spending by the tourists and therefore pushing the prices up. The cost of living has increased at a worse rate as compared to other regions in the United States. For example, the cost of gas in the island has increased by more than three times since 1993 with the cost of electricity increasing by more than four times in the same period. Also, the housing sector has been significantly affected by the increase in the level of tourism in Kailua. The prices of housing and accommodation have doubled as a result of demand pull associated with an increase in the number of tourist in the attraction site. As noted by Ross(5), the number of rooms have been increasing, but the cost has also been increasing. The number of hotel rooms, for example, have increased from 65,000 rooms in 1985 to 132,000 rooms in the year 2010. The increase has been accompanied by the increase in the number of tourists, which is slightly high as compared to the increase in the number of accommodation facilities and therefore forcing the prices to cost increase. The price of a median house in Kailua, for example, is cost $1,034,700 which is an increase of about 6.4% over the past year. The price of the houses is expected to increase further in 2018 by about 4.8%. The average prices of houses per square foot are about $667 which is relatively high as compared to other areas in the United States. It is not just the cost of buying a house in Kailua that have been affected by the increased level of inflation. The median cost of renting a room in Kailua have also increased in the recent past with the prices currently being about $2,900 which is significantly higher than the average rent in other areas in the United States which is about $2,300 (Ross 10). Therefore, the increased level of tourism in the region has resulted in economic challenges, and therefore all the stakeholders need to come together and develop a solution to the problem.

Tourism is meant to bring benefits to the residents. However, when not well controlled, it can result in more economic challenges than benefits. Therefore, solutions to handle the challenges are very important for this case. For the case of Kailua, the level of tourism have resulted in increases in the cost of living as noted in the increase in prices of houses as well as an increase in the cost of energy such as gas and electricity. Numerous options can be used to manage the level of inflation in different regions. One of the most effects measures as suggested by Gutierrez (10) is to control the level of demand. Since uncontrolled demand causes the level of inflation, then this can be one of the most effective means of controlling the level of inflation in Kailua. Hawaii Business Magazine (3) suggests two methods of controlling tourism in the area with one being controlling the number of people entering the community and the other one being controlling how people enter the region. The state government should set a limit for the number of tourists and foreigners who enter the region in a specific period to control an uncontrolled influx of tourists. When the number as well as how such tourist enter the region is controlled, then the demand of the facilities in the regions will also have been controlled and therefore solving the issue of increased cost of living in the area.

Another effective means of controlling the level of inflation for any particular product region is through controlling the prices. The government through the legislature have the power to control the prices, in favor of the local communities. Therefore, the state government in Hawaii should develop a strategy that will be aimed at controlling the prices of gas, electricity, and housing with the aim of protecting the local people against the ever-increasing cost of living. Some strategies can be used to control the prices. One of the methods is to set a price cap. The price cap for this case would mean prices beyond which specific products should not be sold. As suggested by Pratt (374), the government and the tourism control board may also resolve to set prices that are different the foreigners and the local people. This is possible through taxation where the government sets different taxes for goods that are meant for different markets, for this case being the locals and the tourists.

The effectiveness of the different methods that can be used to control inflation is different. The difference in the level of effectiveness is a factor of the particular market. For the case of tourism, the best strategy to control the level of inflation as a result of increased level of tourism is to control the number of tourists in the region. Given that the United States is a free market where the force of demand and supply drives the prices, an attempt to control the price by the government may receive serious criticism from the international community as well as civil rights activists (Eisenschitz 111). Therefore, the best method to solve the issue of ever increasing cost of living in Kailua would be to control the number of tourists as well as how they enter the region.

Tourism has various economic benefits which include creation for jobs for the local people, an increased market as well as a positive balance of payment. However, it is important to also focus on the other side of tourism, which is the negative effects of tourism. Tourism in Kailua has resulted in some economic challenges which include the increased cost of living. The housing prices, the cost of gas as well as the cost of electricity have significantly increased in Hawaii as a result of increased demand due to tourism. Therefore, it is important to look at means that can be used in controlling the cost of living in the region. One of the proposed methods which seem to be more effective is controlling tourism. The government can also opt to control prices.

Works Cited

Eagle, Nathan, "Cost of Living in Hawaii Continues to rise 20 Years after ‘Price of Paradise'”.       HuffPost. December 6, 2017. Accessed April 4, 2018, from   

Eisenschitz, Aram. "Tourism, class and crisis." Human Geography 9.3 (2017): 110-124.           

Gutierrez, Ben, "Influx of tourism spurs concerns about future of Kailua." Hawaii News. November 21, 2016. Web. Accessed April 4, 2018, from                                mean-more-headaches

Hawaii Business Magazine, "Kailua seeks to balance." Tourism. July 3, 2012. Web. Accessed         April 4, 2018, from

Pratt, Stephen. "Tourism yield of different market segments: A case study of Hawaii." Tourism       Economics 18.2 (2012): 373-391.

Ross, Eleanor, "Most expensive place to live in U.S.? Hawaii, where toilet paper costs more than        anywhere in the world". The Newsweek. June 26, 2017. Web. Accessed April 4, 2018, from        more-628977

September 04, 2023

Business Economics Life

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Hawaii Tourism

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