Tourism shocks could cost Hawaii tens of thousands of jobs

Gov. David Ige’s call for tourists to postpone trips to Hawaii for the next 30 days could lead to the closure of some hotels and job losses for tens of thousands of workers, according to one industry expert.

On Tuesday Ige “strongly encouraged” visitors to postpone their vacations and reschedule for a later date to help stem the spread of the coronavirus.

Tourists spent $1.7 billion in the state in January, when 862,574 came to the islands.

“When the governor says don’t come to the state for 30 days, most people won’t come,” said Keith Vieira, principal of KV &Associates, Hospitality Consulting. “I’m not critical of what he’s saying — it’s not wrong — but it will shut down the industry, and tens of thousands of people are going to lose their jobs. It’s only a matter of time before we see some Hawaii hotels shutting down.”

Ige also directed visitor attractions, bars, clubs and restaurant dining rooms to close for 30 days.

While Ige stopped short of ordering the visitor industry to comply with his recommendations, Vieira said most businesses will try to follow them.

“The penalty for not following them if something happens … it’s a stupid risk,” Vieira said.

Mufi Hannemann, president and CEO of the Hawaii Lodging &Tourism Association, said despite the coming economic pain, Ige had to act out of public health and safety.

“There’s no question some tough decisions may come sooner rather than later,” Hannemann said. “Everything was already on the table, from furloughs to reduction in hours to layoffs, even closures. Now we know for the next 30 days that there’ll be more cancellations and more of the bookings that we were counting on are not going to happen.”

“The way I’m reading the governor’s recommendation is that we can no longer guarantee that someone coming here will have a safe and healthy experience because of the coronavirus. And they probably won’t see the beauty of Hawaii, either, because of the challenges we are facing,” Hannemann said.

Toni Marie Davis, executive director of the 170-member Activities &Attractions Association of Hawaii (A3H), said most members already were taking steps to comply with social distancing up to temporary closures. In most instances, Davis said, the closures were motivated by community concerns; however, in some cases they were done to help stem losses.

Davis said Arival, a destination experience company, reports that the nation’s activities and attractions industry has seen an average 42% drop in bookings. As such, 1 in 4 operators risk failure in the next three months, she said.

Peter O’Riordan, owner/operator of Sea Maui, said Ige took a step in the right direction, but said “clearer verbiage” might be needed to convince some people to comply.

O’Riordan already had closed his snorkeling and catamaran operation before Ige’s Tuesday address and said it would remain shuttered through at least April 1. He and four of his workers had to get tested for COVID-19 on Tuesday after the state Department of Health notified them that a customer had exposed them to the new coronavirus.

“The guidelines are only suggestions, but we feel strongly that ignoring them could be making our situation in the islands much worse for the future,” O’Riordan said.“We can always make money. We can’t resurrect the dead.”