The Japanese Invade Hawaii

On a recent Sunday, a Honolulu matron answered the door of her stately home to find three Japanese businessmen who offered her $300,000 for it on the spot; they wanted it as a vacation center for their Hiroshima workers. When she refused, the group's spokesman replied: "Ah, I understand. The $300,000 was merely for the house. The grounds we can discuss later." Similar, if less startling, offers are being made all over Hawaii these days as Japanese businessmen step up their efforts to buy control of hotels, shops, travel agencies, land and private estates.

Yet the hard lesson that U.S. investors in Europe and Latin America learned earlier is now being thrust upon the Japanese moving into Hawaii: local residents often resent and fear a sudden pronounced rise in takeovers by foreigners. Some Hawaiians are deeply concerned, even though their own state government invited the splurge by spending $1,000,000 at Japan's Expo '70 in Osaka to promote investment in the islands.

The investment pattern, as much as its size, worries Hawaiians. Japanese companies have invested more than $250 million, mostly in the islands' booming tourist industry. "If the current pace of Japanese investment continues, it could mean foreign control of the state's leading industry within the next five years," concludes a report of the Republican caucus in the state house of representatives. A Honolulu cab driver is more blunt: "What the Japanese couldn't do during World War II, they are trying to do with bags of money--take over these islands."

So far the Japanese have bought eleven hotels that account for 11% of Hawaii's 36,000 rooms, and they have two other hotels under construction. Among the Japanese-owned hotels: the Hawaiian Regent, the Surfsider and the Imperial Hawaiian. They have bought two Honolulu golf courses and some 3,000 acres of resort development land on the big island of Hawaii.

The investment coincides with a surge in Japanese tourism. Since 1970, when Japan Air Lines initiated a $250 round-trip package tour between Japan and Honolulu, the annual number of Japanese visitors has jumped from 130,000 to 235,000. About 12% of all the islands' tourists are from Japan, and within five years, one-fourth are expected to be. Even a local pornography shop has signs in both English and Japanese.

Residents whose income is tied to the tourist trade fear that they will be shut out by the new owners. Some Honolulu tourist officials complain that the Japanese are developing a "closed system" in which their countrymen fly J.A.L., use Japanese-owned hotels, buses, shops and restaurants, and Japanese tour guides. "American interests do not see a dollar's worth of business," says one official. The Japanese investors, however, deny this charge.

When the Okai Land Corp. bought a public golf course in Honolulu, rumors circulated that the course was to go private--for Japanese tourists only The new manager, Shozo Watanabe, denies this. As he told TIME Correspondent Leo Janos, "We are foreigners. We don't want to make mistakes. Even if we thought something was better, if it wouldn't seem better to local residents, we wouldn't do it."

Not everyone is upset about the situation. George Kanahele, a vice president of the Hawaii Corp., a financial conglomerate, says: "The Japanese investors provide needed capital for a perennially money-short economy, as well as jobs for our local labor and revenues for our hard-up government coffers." For their part, the Japanese have been surprised by all the fuss. After discussions with a delegation of concerned Hawaiian businessmen in Tokyo, some of the Japanese investors agreed that they had to mix more with the Hawaiians and become more involved in community affairs and projects.

The criticism, however, is not waning. The Hawaii Civic Association has condemned foreign purchases of real estate. Endorsing the association's resolution, The Hawaiian League of Conservation Voters declared: "No more Japanese syndicates."

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