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Hawaii News

Residents’ response to Lane was boom or bust for many businesses

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Ala Moana Center reopened Saturday to large crowds after closing due to Hurricane Lane.

Hawaii didn’t take a direct physical hit from Hurricane Lane, which was downgraded to a tropical storm Friday, but it did dampen performance for some businesses.

As Hurricane Lane skirted close to the Hawaiian Islands, there was initially a huge uptick in sales for places like Walmart, Costco, Sam’s Club, convenience stores, grocery stores and hardware retailers.

“Any place that sold nonperishable canned goods, storm preparation goods and bottled water was probably doing pretty well. So were the sandbag and barricade suppliers,” said Sam Shenkus, vice president and director of marketing for the Royal Hawaiian Center in Waikiki.

But as storm reports worsened into Thursday, so did business for the major retail malls, clothing stores and restaurants that made the costly decision to close their doors. Even Waikiki’s two retail giants, the Royal Hawaiian Center and the International Market Place, erred on the side of caution when they closed early Thursday evening and didn’t reopen until Saturday morning.

Airlines canceled flights, offered waivers on change fees and flew with fewer customers, especially on flights coming into the state. Activity providers ground to a halt. Hotels and vacation rentals experienced cancellations and saw bookings for future travel to Hawaii drop. Some businesses across the state were still experiencing rain-related disruptions Monday.

While it’s too soon to tell how much of an economic hit the state took, Shenkus estimates that tens of millions of dollars were at risk in visitor spending alone. She bases that on the fact that last year August was third-highest month for visitor spending in the state, with the Hawaii Tourism Authority estimating that visitors spent nearly $1.4 billion statewide and nearly $699 million on Oahu.

“If you divide the August spending by 31, we stood to lose up to $23 million per day on Oahu and up to $45 million statewide per day,” Shenkus said. “And that’s a conservative estimate. It doesn’t take into account that we were trending higher in 2018 or that most of the closures were on Friday, which is an extremely busy retail and food and beverage day. It also doesn’t account for the potential losses from residents, who stayed at home and didn’t go out.”

Keith Vieira, principal of KV &Associates, Hospitality Consulting, said some of Hurricane Lane’s greatest disruptions occurred on Hawaii island, where they compounded losses from the Kilauea eruption.

“We had a 10 to 15 percent cancellation rate of new arrivals on the Big Island over the storm weekend,” Vieira said. “Bookings are down, too. People watching the news seeing the same river in Hilo continue to overflow may have postponed. I think the impact will be short-lived, but it’s a large hit.”

Jack Richards, president and CEO of Pleasant Holidays, said the wholesale travel seller lost “well over $1 million between its travel and activity sales” and has sustained significant cancellations and a drop in bookings statewide that extends into 2019.

“The good news is that I’m seeing airline fare sales all over the place for September,” Richards said. “The airlines are trying to incentive travel.”

Alex Da Silva, spokesman for Hawaiian Airlines, said the carrier canceled 10 flights between Thursday and Saturday but wouldn’t have a “full picture of the financial impact associated with the hurricane until our third-quarter earnings call.”

Da Silva said the carrier doesn’t yet have a full count of waivers, which have been extended to Sept. 12 to assist guests with travel to and from Hilo, Kona, Kahului and Kapalua, Maui, in the wake of heavy rain.

United Airlines canceled 18 flights. The carrier also scheduled two additional flights on Thursday from Honolulu to San Francisco, reduced last-minute fares and encouraged storm-affected customers to take advantage of waivers.

Still, the storm clouds came with silver linings for some businesses. Many of the businesses that chose to remain open Friday experienced brisk sales, and those that reopened early Saturday experienced pent-up demand.

Subway at Koko Marina Shopping Center reportedly sold so many sandwiches Friday that it eventually ran out of bread. Some tenants at smaller malls like Kaneohe Bay Shopping Center stayed open, including O’Reilly Auto Parts, Petco, Jamba Juice, 7-Eleven and Safeway.

Monica Salter, spokeswoman for Outrigger Enterprises Group, said without many options for eating in Waikiki, restaurants that did stay open benefited.

Shige Kikuchi, an owner of Appetito Craft Pizza &Wine Bar on the ground floor of the Ohana Waikiki East by Outrigger said sales were 50 percent Thursday, 80 percent higher Friday and returned to normal Saturday.

During the hurricane the Reef Bar &Market Grill at the Outrigger Reef Waikiki Beach Resort had its single busiest day since opening earlier this year, Salter said.

Chef Delia Romano said, “It was nonstop from the moment we opened to the time we closed. The guests loved it, and the Outrigger Reef team was fabulous.”

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