Hawaii’s visitor industry is under siege as COVID-19 containment measures and dropping visitor demand have slowed tourism — the largest contributor to the state’s growth — to a trickle.
On Tuesday, the fifth day of a mandatory quarantine for trans-Pacific passengers, only 121 of the 681 passengers were visitors. Since the order took effect Thursday, only 887 visitors have come into the state. Last year at this time, that number would have been more like 150,000.
While some visitors were here before the quarantine, more of them are leaving every day. Waikiki, the epicenter of the state’s tourism economy, has turned into a ghost town from both the passenger quarantine and Gov. David Ige’s earlier stay-in-place, work-at-home order.
More than 100 hotels statewide have closed or suspended at least some of their operations. Entertainment, venues, parks and restaurants, which are now limited only to takeout service, have been severely affected.
Most of the changes have occurred over the last week or so. Visitor arrivals in February grew to 828,056, up nearly 6% from the same month last year, according to preliminary data released Tuesday by the Hawaii Tourism Authority. Spending also grew almost 5% to nearly $1.5 billion.
The gains are the last statewide tourism will see for a while. And some fear what the economic impacts will look like if the tourism lockdown continues into May and June.
Earlier this week the University of Hawaii Economic Research Organization said it now expects visitor arrivals and visitor spending to drop about 41% this year.
Carl Bonham, UHERO executive director, said the organization’s most recent forecast assumes the tourism economy is completely shut down for April and May and “getting back to business in June — not full recovery, but instead of being 100% down, it’s a fraction of that.”
“What if it doesn’t get back to business in June? It’s not dramatically different — assuming that we got the forecast right in the first place, that it’s low enough.”
If March visitor numbers fall more than anticipated, Bonham said it could pull down the first and second quarters and bring the annual tourism forecast even lower than 41%.
“Still, that’s not a dramatically different story. If we don’t open back up in May and June, it’s not very far from what’s in our forecast,” he said. “Instead of having visitors fall by 41%, they fall by 42%, 43%, 44% or 45%. We’re talking about very small differences.”
Bonham said the current forecast accounts for the impact of the federal relief package on individuals and households but not on businesses. It’s possible some of Hawaii’s tourism businesses, like hotels and airlines, could decide to pursue some of the relief, which requires keeping some workers on the payroll, he said.
“The bright side of it is we got a compromise bill out that definitely makes a difference. The real challenge right now for many people is getting that relief as quickly as possible,” Bonham said. “The relief in the CARES Act doesn’t solve our problems, but it helps to address them; and there will be additional stimulus.”
Still, the interim situation for the state’s visitor industry is painful, said Keith Vieira, principal of KV & Associates, Hospitality Consulting.
Vieira said most hoteliers that have suspended operations are anticipating June or July as the best-case scenario for reopening. But that’s only if the next two weeks show some flattening of Hawaii’s COVID-19 curve, which had grown Tuesday to a total of 224 and included the first death in the islands.
Lt. Gov. Josh Green said Tuesday that it is “too soon to know if we have flattened the curve sufficiently to defeat the virus by the end of the month.”
“These next several days are critical,” Green said. “We will know what the trend is with a lot of confidence by April 10. That will mark two weeks since the home quarantine began.”
Vieira said the visitor industry has a lot riding on that outcome.
“If cases peak in the next two weeks, we’ll probably have about 60 days of hotel closures — that’s really the minimum time it takes to close a hotel and reopen it,” he said. “But if we don’t know by the end of April, we’ll pretty much have to give away summer. If that happens, how do we get to leveling off in the fourth quarter? Nobody knows.”
Vieira said even the few Hawaii hotels that have hung on by catering to essential travelers are bracing for further impacts after today, which marks the start of a new mandatory quarantine for interisland flights.
Hawaii’s quarantine and stay-in-place orders already have been touted as the nation’s strictest COVID-19 containment measures. But the new procedure, which is meant to address COVID-19 spreading between the islands, is even more onerous than for trans-Pacific passengers. Like the earlier trans-Pacific quarantine order, violators may be charged with a misdemeanor and subject to fines of up to $5,000 and/or up to one year in prison.
The new order restricts interisland travel to people performing an essential function, including those providing and seeking medical care. They’ll have to fill out an interisland declaration form, which includes their name, residential address, telephone number and where they are going. Unless they are traveling for medical or health care reasons and wearing protective gear, such as PPEs and masks, they’ll have to self-quarantine at their destination. They aren’t allowed to receive visitors and will have to order food delivery. Once they get home, they aren’t subject to a quarantine, but are required to wear protective gear and follow social distancing requirements.
While pent-up demand for Hawaii is likely after the new coronavirus pandemic unwinds, the coming recession complicates matters.
“What’s not known is the economic impact to future travelers,” Vieira said. “After 9/11, people wanted to travel and reunite with their families. Travelers might want to do that after the coronavirus pandemic ends, but they might not be able to afford it.”