Hawaii is counting down to an almost full collapse of the state’s visitor industry.
On Sunday the state’s daily airline passenger counts, which in peak times average about 50,000 passengers a day, had fallen to about 7,000, and of those only about 3,000 were likely visitors.
Thursday starts Gov. David Ige’s mandate ordering all residents and visitors arriving or returning to the state to a mandatory 14-day self-quarantine ensuring that virtually the only part of Hawaii’s tourism industry that’s still growing are the furloughs and layoffs.
The state Department of Labor and Industrial Relations has received 41,718 new unemployment claims since Feb. 16, with 40,422 of them since March 1, when COVID-19 began battering the tourism-dependent economy of the Hawaiian Islands.
There were 4,996 first-time claims filed Sunday and another 19,534 Monday — the worst day of job losses in the state since COVID-19 concerns mounted.
Tourism demand for Hawaii, which was once a coveted international destination, has plummeted in the wake of the nation’s growing public health crisis and state and local COVID-19 containment orders.
“We started seeing the decline over the last three weeks, with a big drop after the governor’s (quarantine) announcement on Saturday,” Chris Tatum, president and CEO of the Hawaii Tourism Authority, told the Honolulu Star-Advertiser on Tuesday.
Ige’s quarantine, the first such action in the nation, goes into effect at 12:01 a.m. Thursday. Failing to follow Ige’s order is a misdemeanor punishable by a maximum fine of $5,000, imprisonment of not more than one year or both.
Ige called the actions “extreme” but said they would “help flatten the curve and lay the groundwork for a quicker recovery.”
Ige also has ordered the entire state, save for essential workers, to stay at home and work from home starting at 12:01 a.m. today through April 30. That stay-in-place order changed the playbook for the entire visitor industry, which otherwise might have looked to stabilize by turning to kamaaina to support them through island hops, staycations and visits to restaurants and other establishments.
Originally, the visitor industry thought it could get some of its 1.4 million Hawaii residents to patronize hotels and other resort offerings, Tatum said.
“But in the current situation, it doesn’t work because they aren’t supposed to leave their homes,” he said. “We are kind of at a standstill about what we can do in terms of business.”
Marketing to tourists isn’t even on the immediate horizon as the industry embraces county and state directives, he said.
“The focus of our team is getting the message to the world of the situation in Hawaii. We’re saying, ‘We care about the visitors and appreciate all they’ve done, but right now is not the time to come,’” Tatum said.
HTA, which cut China’s marketing budget before the coronavirus had started spreading, has paused all its marketing campaigns. Its community, natural resources and cultural programs won’t be paid until events are held.
HTA also is holding back some $10 million — essentially all uncommitted funds from its fiscal year 2020 budget, which runs through July. Prior to the new coronavirus, HTA’s fiscal year 2020 budget was $86 million, which included funds carried over from prior years as well as a $79 million share of transient accommodations taxes from the state Legislature.
Tatum said HTA also has another $5 million in emergency funding that could be deployed.
“We’ve just put everything on pause. The expectation at some point is that we’ll get into recovery mode, and the funding that we’ve been holding back will go into those markets and bring visitors back,” Tatum said. “Getting our people back to work is the focus for the future.”
In the meantime many of the businesses that make up Hawaii’s visitor industry infrastructure are shutting down — hopefully, only temporarily. Rental car places are closing some branches and trying to find more space to park their fleets.
Airlines are slashing flights and hours. Hawaiian Airlines, which is headquartered in Hawaii and has about 7,500 workers, said Sunday that it would temporarily suspend most long-haul passenger service.
The Hawai‘i Convention Center is mostly closed through April 30. It’s already lost all local business through at least April and endured cancellations from six offshore groups, said Teri Orton, the center’s general manager.
“We went from having one of our best years ever to a nightmare,” Orton said. “We did some furloughs. They have medical but no hours. We’re keeping essential staff on for security and maintenance of the building.”
Hotels are essential businesses, so they don’t have to close. They have a role to play in housing first responders, medical workers, and people who are traveling for essential purposes or are displaced or quarantined. Still, many of Hawaii’s hotels have been temporarily shuttered.
By Tuesday evening about 40 hotels statewide had already closed or planned to close this week, with many more announcements expected.
Ben Rafter, OLS Hotels and Resorts CEO, said his count, which includes closures that don’t start until Thursday and beyond, is up to “at least 67 across Hawaii and 35 in Waikiki.”
Keith Vieira, principal of KV & Associates, Hospitality Consulting, said, “My guess is that 60% to 70% of Hawaii’s hotels will be closed by this weekend.”
Vieira said the closures have less to do with financials than with the desire to do right by the community, especially amid growing pressure and fear.
“Hotel financials has nothing to do with this; it’s all what is best for their employees and the community. They also are doing it so they can better prepare for the relaunch when it happens,” Vieira said. “The No. 1 challenge they face when closing or significantly laying off is how do you take care of employees’ benefits.”
Tatum said HTA is working with Congressman Ed Case and others in the delegation to find a way to keep medical benefits for employees during the furloughs.
“Right now the least amount the industry is offering is 30 days; some have up to 90 days. But no one knows the actual furlough length,” he said. “Our goal is to keep them in benefits as long as this crisis.”
Hawaii is not the only U.S. destination facing rough times this week. The U.S. Travel Association and Tourism Economics increased their nationwide projection of travel-related job losses to 5.9 million, up from 4.6 million last week.
The trickle-down impact to the U.S. travel industry could prove enormous. U.S. Travel Association and Tourism Economics estimate that travel supports 15.8 million American jobs — employment for 1 out of every 10 Americans. In Hawaii last year, tourism brought Hawaii 10.4 million visitors, who spent nearly $18 billion and supported more than 200,000 jobs.
HOTEL CLOSURES INCREASE
Nearly 40 Hawaii hotels have closed or will close this week, with more expected.
>> Club Wyndham Bali Hai Villas
>> Grand Hyatt Kauai Resort & Spa
>> Sheraton Kauai Poipu (hotel)
>> Aulani, a Disney Resort
>> Coconut Waikiki Hotel
>> Four Seasons Resort Oahu
>> Halekulani Hotel
>> The Kahala Hotel & Resort
>> Ko Olina Resort
>> Prince Waikiki
>> Paradise Bay Resort
>> Princess Kaiulani
>> The Ritz-Carlton Waikiki (rental program)
>> Royal Hawaiian
>> Waikiki Beach Marriott
>> Westin Moana Surfrider
>> Andaz Maui
>> Fairmont Kea Lani
>> Four Seasons Maui
>> Kaanapali Beach Hotel
>> Maui Seaside Hotel
>> Montage Kapalua Bay
>> Plantation Inn
>> The Ritz-Carlton Kapalua
>> Royal Lahaina Resort
>> Sheraton Maui
>> Wailea Beach Resort — Marriott
>> Westin Maui
>> Travaasa Hana
>> Grand Wailea, a Waldorf Astoria Resort
>> Four Seasons Lanai at Koele
>> Four Seasons Resort Lanai
>> Hotel Molokai
>> Hilo Seaside Hotel
>> Kona Seaside Hotel
>> Royal Kona Resort
>> Waikoloa Marriott (hotel)
Source: HTA and Star-Advertiser research