Shayne Subia, a Moana Surfrider housekeeper, went online Wednesday to file for unemployment after his work hours dropped to zero in the wake of the COVID-19 pandemic.
But the state’s online unemployment system was so overwhelmed that it crashed. He tried the system again Thursday, but it still wouldn’t go through, heightening his anxiety levels.
“It worries me what will happen next. How will I support myself and pay my bills? Worst scenario: how to pay my rent,” Subia said, adding that the pain of this crisis is compounded by the sacrifices Unite Here Local 5 made during a 51-day hotel strike that ended in late 2018.
The overload in unemployment claims, which have been steadily rising as COVID-19 concerns clamp down on Hawaii’s economy, caused a misleading reported drop in Wednesday’s activity.
To be sure, the state is bracing for tens of thousands of layoffs with the start of the collapse this week of Hawaii tourism. The American Hotel and Lodging Association’s latest Oxford Economics study conservatively estimates 46,778 hotel-supported jobs in Hawaii could be lost over the next six months, with a worst-case scenario of 57,173 jobs.
The state Department of Labor and Industrial Relations already has reported a steep rise in weekly unemployment claims, which hit 9,182 from March 1 to Wednesday. But tourism industry expects the state hasn’t even come close to the worst of the pain.
Keith Vieira, principal of KV &Associates, Hospitality Consulting, said he’s working with three hotels on temporary closure plans, which he expects will be announced soon.
“My guess is that about 50% of the hotels in Hawaii will be announcing (temporary) closures in the next seven to 10 days,” Vieira said. “Planning is challenging. The No. 1 concern is stopping the spread of the virus. The No. 2 concern is making sure employees can survive financially and that there’s a plan to help them keep their medical benefits and eventually return to work. And, there’s so much uncertainty about the time frame. Is this going to take 30 days, 60 days or 90 days?”
Joseph Toy, Hospitality Advisors president and CEO, said he’s seen a lot of shocks hit Hawaii’s visitor industry but doesn’t recall a time when things were bad enough to flood the unemployment claim system.
“There’s going to be a lot of pain in the market, and it hasn’t even begun to peak. It all came so suddenly that many are still trying to collect a breath,” Toy said. “There’s really no part of the hotel industry that will go unscathed, from a bellman all the way to Wall Street. The banks are obviously nervous.”
Toy said it’s unlikely that current market conditions will resolve by summer, which probably pushes recovery as far out as the first quarter of next year.
“2020 is pretty much done,” he said.
Local 5 spokesman Bryant de Venecia said job losses already “are worse than unemployment claims are showing,” and he expects many more are coming.
“I am aware that Hilton is closing a lot of departments. Marriott properties are making cuts, too,” de Venecia said. “Hyatt is one of the employers that is still not giving us responses. And, there are worries about restaurant closures at a lot of the smaller hotels.”
Through Wednesday, weekly unemployment claims already had hit 7,092. That’s up from 1,292 last week and 798 during the first week of March. The last week of February, weekly unemployment claims were just 639.
On Tuesday, claims shot up to 2,974 —their highest one-day level this year. That was the day Gov. David Ige asked visitors to avoid nonessential travel to Hawaii for 30 days and also recommended closures of bars, clubs and restaurant dining rooms.
Further, county containment measures Wednesday should have resulted in even more disruption, but Wednesday’s claims fell to 2,263. DLIR spokesman William Kunstman said the department thinks that the “drop was due to the flooding of applicants and subsequent slowdown of the site.”
DLIR Director Scott Murakami said Wednesday’s claim count was about about 700 claims fewer than Tuesday’s count.
“I do want to express my sincere apologies for the latency that we saw in our system,” Murakami said. “At a certain threshold the system just bogs down. We are trying to optimize the solution. Otherwise it’s first to the trough will feed.”
Murakami said Ige waived the one-week waiting period for unemployment, but right now it’s still taking claimants about 14 days or more to receive their checks.
Murakami said DLIR is working on making improvements to its phone lines and online system, which they hope will run more efficiently this weekend to allow for quicker processing of claims.
“Right now we think the online system can only handle about 100 claims an hour,” Murakami said. “We have never, ever experienced this level of unemployment claims. We are doing everything we can to address it.”
DLIR already doubled its front-line workers to 14 Thursday, and Murakami said the department plans to add another nine today to bring the count to 23.
Murakami said federal intervention also could benefit claimants shortly. On Wednesday a federal law was signed that would allow the state to extend the benefit period beyond 26 weeks. It also waives the job search requirement and loosens other eligibility guidelines.
Murakami said Hawaii is waiting for federal government guidance, but application of the new law is “predicated on the unemployment rate jumping by 10% in the state,” a requirement that he believes the state will easily meet.