As Hawaii volcano eruption hits tourism, governor stresses the island is ‘open for business’

Finance news

The volcano eruption on Hawaii’s Big Island is driving away some tourists from the affected area, but the rest of the island is “open for business,” Gov. David Ige told CNBC on Tuesday.

Hawaii Volcanoes National Park, a popular tourist destination, has been shut down since the Kilauea volcano began spewing lava and toxic gases earlier this month.

“The actual area of the eruption is a very, very small portion of Hawaii Island. Less than 1 percent of the land mass is actually impacted,” Ige said on “Closing Bell.”

For the rest of the island, “visitor arrivals there are still strong,” he added.

Tourism is the Big Island’s largest industry. However, some vacationers are now not making the trip.

Both Norwegian Cruise Lines and Royal Caribbean have cancelled stops at Hilo, the Big Island’s port. And tourism authorities said summer bookings for hotels on the island have fallen almost 50 percent since the eruption started on May 3.

Meanwhile, the closure of the national park is costing the island $166 million, the National Park Service said on Monday.

The lost revenue rises to $222 million when some 2,000 jobs indirectly impacted by park tourists are included, according to a park service report.

Ige also stressed the rest of the island chain is still seeing strong visitor arrivals.

“Hawaii is still the destination. The rest of the islands are unaffected by what’s happening at Kilauea.”

Meanwhile, The Wall Street Journal recently reported the state government encourages residents to live at the foot of the active volcano by effectively subsidizing insurance.

Ige said the actual number of people attracted by that incentive is “very small.” Instead, he said they are drawn to the area for the low cost of the land.

However, he said the state will re-evaluate policies.

“Many of the residents who live in the area know what the risks are, certainly,” he said. “If there are anomalies in our insurance policies, we will make adjustments as appropriate.”

— Reuters contributed to this report.