A Thriving Economic Hub in the Pacific

Honolulu, the largest city in the Hawaiian Islands, serves as a major economic center for the region. As the primary entry point for millions of tourists annually, tourism remains the backbone of the city's economy, contributing $10 billion per year. In addition, Honolulu’s strategic Pacific location positions it as a key trading and business hub, bridging the gap between the East and the West. Other vital sectors include military defense, research and development, and manufacturing.

Major Companies Driving Honolulu’s Economy

Honolulu is home to several major corporations, particularly in finance, healthcare, and utilities. Some of the most prominent companies headquartered in the city include:

• Alexander & Baldwin (Real estate & agriculture)
• Bank of Hawaii (Banking & financial services)
• First Hawaiian Bank (Hawaii’s largest and oldest bank)
• Hawaii Medical Service Association (Healthcare)
• Hawaiian Electric Industries (Energy)
• Matson Navigation Company (Shipping & logistics)
• The Queen’s Health Systems (Healthcare)

The airline industry also has a strong presence in Honolulu, with Hawaiian Airlines, Island Air, and Aloha Air Cargo all headquartered in the city.

Honolulu’s High Cost of Living

Despite its economic strengths, Honolulu is one of the most expensive cities in the U.S. The city ranked as the second most expensive rental market among 210 metropolitan areas in 2009. The cost of essential goods, including gasoline, electricity, and food, is significantly higher than on the U.S. mainland due to the reliance on imports. A 2014 report found that Honolulu’s cost of living was 69% above the U.S. average.

A 2024 report from the Department of Business, Economic Development & Tourism revealed that Honolulu’s consumer price index (CPI-U) increased by 1.5 percentage points above the 3.2% U.S. average in the first half of the year.

Local Banking System

Unlike other U.S. states, Hawaii’s banking system is dominated by local financial institutions, requiring visitors and new residents to adapt to different banking services. First Hawaiian Bank, headquartered at the First Hawaiian Center (the tallest office building in Hawaii), remains the largest and oldest bank in the state.

Conclusion

Honolulu’s economy remains strong and diverse, with tourism, trade, and military defense playing central roles. However, high living costs and expensive rentals continue to be challenges for residents. As the city adapts to economic changes, it remains a vital hub for business and culture in the Pacific.