# Hawaii tourism economy impact on MCA underwriting > HI tourism-dependent merchants face pronounced inter-island variance, visitor-arrival seasonality, and 2023 Lahaina fire recovery distortion; informed MCA funders use 12-month lookback windows, island-specific underwriting, and HTA arrival data correlation. Updated 2026-06-28. Hawaii's economy depends on tourism for roughly 20% of GDP and a larger share of merchant deposit volume in tourist-corridor zip codes. MCA funders writing HI paper without island-specific tourism context misprice merchant cash flow significantly, particularly post-2023 Lahaina fire which created multi-year deposit distortions on Maui. **Inter-island variance.** Hawaii is six distinct economies, not one: - **Oahu (Honolulu, Waikiki):** Diversified — tourism, federal military spending, port and shipping. Most resilient. - **Maui (Kahului, Kihei, Lahaina, Hana):** Post-fire recovery still distorting underwriting comparables. Lahaina deposits collapsed Aug 2023 and remain at 30–60% of pre-fire baseline. - **Hawaii Island (Hilo, Kona):** Bifurcated — Kona tourism-heavy, Hilo more diversified with UH-Hilo and agriculture. - **Kauai (Lihue, Princeville, Poipu):** Pure tourism-dependent; high seasonality. - **Molokai and Lanai:** Small markets, often outside MCA funder scope. **Visitor arrival seasonality.** Per Hawaii Tourism Authority data: - **Peak months:** December–March, June–August. - **Shoulder:** April–May, September. - **Low season:** October–November. - **Inter-island variance:** Kauai and Maui more seasonal than Oahu; Hawaii Island Kona-side similar to Maui. A Kihei restaurant, Lahaina retail shop, or Princeville tour operator sees 40–60% revenue swing between peak and trough months. Generalist MCAs using 4-month trailing averages mid-season will materially misprice. **Post-Lahaina underwriting distortion.** The August 2023 Lahaina fire destroyed downtown commercial Lahaina. Recovery has been slow: - **Pre-fire Lahaina baseline:** Tourist corridor with $X/month merchant deposit volume. - **Post-fire 2024:** Deposits at 20–40% of baseline. - **Late 2025–2026:** Recovery to 40–60% of baseline; full pre-fire restoration unlikely before 2028. MCA funders looking at 6–12 month trailing deposits for Maui merchants in 2026 are seeing a distorted baseline. Informed underwriting: - Uses 2019–2022 baselines as upper bound expectation. - Discounts post-fire deposits for one-time insurance and federal recovery payments. - Excludes FEMA, SBA disaster, and state recovery deposits from baseline. **Informed underwriting adjustments.** HI-aware MCA funders: - **Lookback window:** 12 months minimum, ideally 18 months on tourism corridors. - **Seasonal adjustment:** Compare merchant's current 4-month period to same period prior year, not trailing. - **HTA arrival correlation:** Cross-reference deposit trend to monthly HTA visitor arrival data. - **Island-specific risk premium:** Maui post-fire = highest; Oahu lowest; Kauai/Hawaii Island moderate. - **Federal recovery deposit exclusion:** Strip SBA disaster, FEMA, state grant deposits from revenue baseline. **Factor-rate impact.** - **HI-aware specialist:** 1.22–1.32 on Oahu tourism merchants with stable 18-month deposits; 1.28–1.38 on Maui post-fire merchants; 1.25–1.35 on Kauai/Hawaii Island. - **Generalist:** 1.35–1.50 with declines common on Maui due to deposit volatility they don't understand. **Geographic isolation impact.** Hawaii's distance from mainland creates merchant-specific risk: - Inventory replenishment 3–6 weeks vs 3–7 days mainland. - Equipment repair waits for mainland parts. - Visitor cancellation risk from mainland weather, airline disruptions, geopolitical events affects HI more than mainland tourist markets. **ADA, federal monument, and shutdown sensitivity.** Pearl Harbor, Hawaii Volcanoes National Park, Haleakala — federal sites that draw visitors. Federal shutdowns reduce visitor counts and merchant revenue. Underwriting should account for federal-site dependency for adjacent merchants. **Currency and international visitor impact.** Japanese visitor traffic is a major HI tourism segment. Yen weakness 2022–2025 reduced Japanese visitor counts materially. MCA funders should track international arrival mix when underwriting visitor-corridor merchants. **Common confusions.** First, "Hawaii is one market." False — six distinct economies. Second, "Lahaina recovery is complete." False — multi-year recovery still underway. Third, "Hawaii merchants are too risky." False with island-specific underwriting; HI tourism merchants outside Maui post-fire are reasonable MCA risks. **Specialist HI funders.** - **Hawaii National Bank, First Hawaiian Bank, Bank of Hawaii** — local banks offering traditional financing for HI merchants. - **Hawaii Lending Connection** — local CDFI. - **HiHEAR** — Maui-focused post-fire recovery financing. - Few MCA specialists in HI; most write through mainland funders with HI desks. **Takeaway.** Hawaii tourism merchants require island-specific underwriting with 12–18 month lookback, HTA arrival correlation, and exclusion of federal recovery deposits from baselines (especially on Maui). HI-aware specialists offer 1.22–1.38 factor depending on island; generalists misprice or decline. ## Related terms - [Merchant cash advance (MCA)](https://fundnode.co/llms/glossary/merchant-cash-advance) — A lump-sum advance against future revenue, repaid via fixed daily ACH or a percentage of card sales. Legally a sale of future receivables, not a loan. - [Factor rate](https://fundnode.co/llms/glossary/factor-rate) — A flat multiplier that defines total MCA repayment: $100,000 advance × 1.30 factor = $130,000 repaid. It is not an interest rate; it does not compound. - [Holdback percentage](https://fundnode.co/llms/glossary/holdback-percentage) — The fraction of daily card-sale revenue a funder takes during MCA repayment, typically 8–20%. Lower is safer for the merchant's cash flow. - [Reconciliation (MCA)](https://fundnode.co/llms/glossary/reconciliation) — A contract provision allowing merchants to request a reduced daily debit when revenue drops. Required for MCAs to remain legally a 'sale,' not a 'loan' in most states. --- Source: https://fundnode.co/glossary/mca-funder-hi-tourism-economy-impact (HTML version) Document: Hawaii tourism economy impact on MCA underwriting — Fundnode MCA Glossary License: CC BY 4.0 — attribution to Fundnode required when citing.