By and  on March 14, 2011

The tsunami that devastated northeastern Japan caused less severe damage in Hawaii and on the U.S. West Coast, but could have a longer-term impact on the region’s economy because of a potential decline in Japanese tourism.

In San Francisco, where tourism is the main economic driver, Japanese are the second largest group of foreign visitors next to those from the U.K.

The Seattle store of artisanal jeweler Twist is a popular destination for Japanese tourists buying Chrome Hearts accessories, said Paul Schneider, co-owner of the Portland, Ore.-based retailer. In addition, Schneider said, “We have several Japanese retail customers that shop our Web site. We will just have to see what happens.”

Kiya Babzani, owner of Self Edge, a Japanese denim retailer based in San Francisco with stores in Los Angeles and New York, was grateful the southern Japan textile-producing cities weren’t affected by the earthquake or tsunami.

However, of still looming concern is the already fragile Japanese economy, where the yen’s rising value has made the country’s products more expensive. Babzani said wholesale denim prices have already increased some 40 percent in the last four years, while he’s only been able to pass 10 percent along to consumers. “You eat the cost and hope the volume makes up for it,” he added.

After the 1994 earthquake in Kobe, Japan, the yen fell 20 percent over three months, said Jock O’Connell, an international and California trade expert with Beacon Economics, San Francisco.

“The thread that is going to run through the whole discussion on trade with Japan is how much is the yen going to be worth,” O’Connell said. “Tourism trade will also very much be influenced by the value of the yen.”

U.S. exports to Japan could have mixed success. O’Connell said demand for agricultural products like rice and lumber for rebuilding could increase. Conversely, there may be a slack off in Japanese demand for U.S. consumer products if incomes in Japan are pinched by the economy.

On a brighter note, O’Connell noted that Japan’s international trade port infrastructure, located near Tokyo, was spared destruction, as was that on the U.S. West Coast.

Damage along the California Coast to boats and docks was estimated at $50 million. On Friday, Gov. Jerry Brown declared a state of emergency in the counties of Del Norte, Humboldt, San Mateo and Santa Cruz. In Southern California, where waves surged up to two feet but didn’t cause any street or retail closures, the tsunami warning was called off Saturday, but officials warned that abrupt tidal surges could continue.

Hardest hit were the Northern California harbor towns of Crescent City and Santa Cruz, where 17 boats were sunk. In Crescent City near the Oregon border, an estimated $25 million in damage was done to commercial fishing boats and docks. One person is presumed dead and three others were injured as they were swept out to sea in Crescent City on Friday.

Just up the coast, there was similar destruction in Brookings, Ore., but no damage estimates were available. In the central California college town of Santa Cruz, 17 boats sank and marina damage was set at $17 million.

The tsunami was noticeable in San Francisco Bay, but wrought little reported damage when water retreated at least twice Friday morning under the Golden Gate Bridge and then reversed course with foot-high tidal waves. Untouched by the tsunami were the Pacific Northwest population centers and ports of Seattle and Portland that are set back and sheltered from the ocean.

A spokeswoman for Seattle-based Nordstrom said Saturday, “None of our stores were impacted and are operating as normal.”

In Hawaii, no stores were closed in retail-heavy Honolulu, but several mom-and-pop tourist shops in Kona, along the western coast of the Big Island, were flooded on Friday. So far, state officials estimate damage at $3 million. At least five major hotels on the island, including the Four Seasons Resort at Hualalai, Hilton Waikoloa Beach Hotel and the Mauna Lani Bay Hotel, sustained damage. Red Cross officials sent aid to families in 42 homes across the state. Three homes were destroyed and 20 sustained major damage.

Malls on the Big Island remained open throughout the weekend. A spokeswoman for Hawaii’s Civil Defense Department said the initial estimate of $3 million in damage was “a very loose number” because it did not yet include damage done to the ports.

“We are sending teams out today to get a better assessment, but most of the retail businesses affected were on the South Kohala Coast within large hotels,” she said.

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