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Tourism-dependent Maui grapples with highest jobless rate in the state

                                A nearly empty Kahului Airport is seen on Maui, Mar. 30.
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A nearly empty Kahului Airport is seen on Maui, Mar. 30.

More than 1,500 unemployed Maui hotel workers from three top resorts in Wailea and Makena turned out recently to pick up food packages paid for by their owner, Host Hotels & Resorts.

It’s a sign of these unfortunate times that so many workers from Andaz Maui at Wailea, the Fairmont Kea Lani and the Hyatt Regency Maui Resort and Spa are in need. In April, Maui County’s unemployment rose to 35%, the highest rate in the state, and until tourism resumes high joblessness seems here to stay.

Michael Jokovich, area vice president Hyatt Hotels Hawaii and general manager Andaz Maui, said volunteering to pass out food made him emotional and more determined to reopen tourism.

“The unemployment rate is just devastating,” Jokovich said. “We’ve got 486 out of 518, (more than) 90%, out of work at the Andaz Maui alone. Seeing everyone gave me hope and inspiration to keep driving to open up our tourism because they were asking me, ‘Boss, when can we come back to work?’”

Before COVID-19 fears and government lockdowns collapsed Hawaii’s tourism, Maui was the top hotel market in the state. In April 2019, Maui was tied with Honolulu for the lowest unemployment in the state.

Part of the reason is that Maui tourism had been on fire. Visitor arrivals rose from 1.8 million in 2009 to 2.9 million in 2018, a 54% gain that was the largest increase on any island.

In 2019, Maui visitor arrivals rose more than 5% to 3.1 million and spending increased more than 2% to $5 billion.

Then tourism statewide hit a pause in March. By April, it had come to a screeching halt.

April unemployment rates by Honolulu Star-Advertiser on Scribd

Dependent on tourism

The collapse has been a stark reminder that Maui’s dependence on tourism, which Mayor Mike Victorino estimates supplies approximately one in three jobs, comes with a price.

“We may be more dependent because we never really looked at, first of all, the military. We built our economy on agriculture and hospitality industry, which is bar none the most lucrative economic base that people could see,” Victorino said. “Now we need to look at what other types of occupations or businesses that we can start that are not directly tied into the tourists.”

A breakdown of nearly 150,000 initial unemployment claims filed with the state Department of Labor and Industrial Relations showed that four Maui ZIP codes were among the 10 areas statewide with the highest portion of claims through mid-March. Not surprising, on Maui, most of the unemployed lived in population centers and tourism hot spots such as Lahaina, Kaanapali, Kapalua, Kihei, Paia, Wailea-Makena and Kahului.

Victorino said he expects tourism will remain Maui’s top economic draw. But even before the COVID-19 pandemic, he said, efforts were underway to create more jobs that weren’t so dependent on the visitor industry.

“We realized we were dependent and that our natural resources were really being taxed way over capacity,” he said. “This pandemic forced our hand.”

Building affordable housing, nurturing online sales of homegrown products, as well as turning abandoned sugar cane land into agricultural lots to grow food and flowers are some of the opportunities Victorino expects could materialize over the next few years.

But tourism isn’t gone for good, he said. The mayor supports Gov. David Ige’s plan to reopen interisland travel June 16.

He also favors the concept of forming a “travel bubble” with Japan, an agreement that would likely allow incoming visitors from Japan who have met certain safety thresholds to bypass Hawaii’s mandatory 14-day self-quarantine for trans- Pacific passengers. The reason the idea is being proposed is that Japan, like Hawaii, has had a low rate of COVID-19 cases and deaths.

As for reopening to trans-Pacific travelers, Victorino’s approach is more cautious.

“I would like them tested before they come into the island and I would feel much more secure if there’s some kind of vaccine to prevent the spread of COVID-19,” he said. “It’s so many variables right now; there’s promise out there of different medical treatments or testing. It’s a wait-and-see attitude; let’s see what happens.

“Will it take months? Will it take a year or two? I don’t know. But at this point I want to make sure that whatever we do, that we do it safely and we protect the residents of Hawaii and Maui County.”

Tourism dependence hurts by Honolulu Star-Advertiser on Scribd

Road to reopening

Sumner La Croix, University of Hawaii Economic Research Organization research fellow, said there’s no immediate substitute for all the tourism jobs that have been lost on Maui or those that won’t return right away.

“I don’t see diversification as the solution to short-run problems,” La Croix said. “We, all of the sudden, won’t see new agricultural ventures starting over the next six months or a rush of tech companies to start up — those are things that we need to be thinking about in the medium to long run.”

La Croix said Maui and other places in Hawaii might have more success taking export industries that have already been successful, such as film and TV production, and looking for ways to get them restarted.

“Hawaii’s low track record with COVID-19 should be very appealing to these industries,” he said. “Even right now, I think there could be a number of productions willing to come here. If they are coming for three months, doing a 14-day quarantine wouldn’t be that bad and perhaps we could negotiate other arrangements with them. ”

La Croix said he also believes that if Hawaii wants to reopen tourism more broadly, a COVID-19 nasal swab testing program for visitors could be mounted in six to 10 weeks if the state and its tourism partners desired to make it happen.

Jokovich, who is a Hawaii Lodging & Tourism Association board member as well as hotelier, said only Ige, the four county mayors, and their circles have the authority to reopen tourism broadly. In the meantime, not all properties on Maui will have enough business to justify reopening once the interisland quarantine is lifted or a travel bubble is formed with Japan, which supplies a very small portion of Maui’s visitor arrivals, he said.

HLTA wants the decision-makers to know the industry is ready with protocols, which even in the absence of testing make exposure to COVID-19 unlikely.

“We’ve worked with the state Department of Health and ILWU Local 142 to come up with public health and safety guidelines to ensure workers, guests and the community are safe,” HLTA President and CEO Mufi Hannemann said.

Unite Here Local 5, which controls most of the union hotels on Oahu, found fault with the plan and held a car caravan in Waikiki on May 27. The protesting hotel workers said they didn’t want the state, in a rush to restart tourism, to fail to protect the public from a second wave of COVID-19 cases.

Local 5’s hesitation comes as members of Hawaii’s visitor industry are clamoring for Ige to pick a date to reopen tourism. The governor said Monday that he might make an announcement this week about a future date to reopen tourism on a broader scale. While some in the industry have speculated Ige could lift the trans-Pacific quarantine as early as July 15, others have said that date could be pushed back due to caution over how the racism-inspired rioting across the U.S. could impact the spread of COVID-19.

The delay is dragging down the economy statewide, but perhaps nowhere near as much as on Maui. That’s part of the reason the approach of ILWU, which represents most of Maui’s union hotels, has been cooperative compared to Local 5.

Donna Domingo, ILWU Local 142 president, said via email, “We appreciate the HLTA for reaching out to us to figure out how we can all work together to safely reopen our tourism industry.”

Domingo said the ILWU will continue to work with the HLTA and the hotels that employ its members to ensure health and safety are prioritized. Among the priorities are making sure workers have the necessary personal protective equipment, she said.

“Workers are not disposable, and it is the workers that are on the front lines getting exposed to a virus that has unfortunately taken the lives of over 100,000 Americans,” Domingo said. “The threat is real, and these workers have families, they have children, they have husbands and wives and friends who care deeply about them. I think it is time that businesses also care about them.”

Domingo said the ILWU also recognizes that Hawaii’s economy has taken a gigantic hit.

“We have reached historic unemployment levels with very little relief in sight.”

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