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Hawaii hotels get lift from interisland travel, anxiously await broader reopening

  • Video by Bruce Asato / basato@staradvertiser.com

    Hotel results have been mixed since Gov. David Ige ended a mandatory 14-day self quarantine for interisland passengers.

  • BRUCE ASATO / BASATO@STARADVERTISER.COM
                                Maui residents Byron and Kimberly Brown sat at a poolside table at the Surfjack Hotel & Swim Club in Waikiki on Friday. The hotel is offering discounted rates for Hawaii residents.

    BRUCE ASATO / BASATO@STARADVERTISER.COM

    Maui residents Byron and Kimberly Brown sat at a poolside table at the Surfjack Hotel & Swim Club in Waikiki on Friday. The hotel is offering discounted rates for Hawaii residents.

  • BRUCE ASATO / BASATO@STARADVERTISER.COM
                                Caitlin da Silva, sat poolside with her dog, Remy, on Friday. Da Silva and her husband, Carlos, flew into Honolulu from Maui and booked a stay at the Surfjack Hotel & Swim Club. “It’s pretty amazing to see Waikiki as it used to be without all the tourists,” Carlos da Silva said. “It’s definitely a once-in-a-lifetime experience that may never happen again.”

    BRUCE ASATO / BASATO@STARADVERTISER.COM

    Caitlin da Silva, sat poolside with her dog, Remy, on Friday. Da Silva and her husband, Carlos, flew into Honolulu from Maui and booked a stay at the Surfjack Hotel & Swim Club. “It’s pretty amazing to see Waikiki as it used to be without all the tourists,” Carlos da Silva said. “It’s definitely a once-in-a-lifetime experience that may never happen again.”

The Browns are back in town.

Maui residents Byron and Kimberly Brown arrived on Oahu on Friday just in time to help boost the Surfjack Hotel & Swim Club’s weekend occupancy to 60% — a level few Hawaii hotels have seen since February.

“We couldn’t wait to come back,” Kimberly Brown said. “Before COVID-19, we came here often, but the interisland passenger quarantine and the stay-at-home orders stopped us. It’s nice to finally be able to come and enjoy Oahu and see family. Lots of people must be thinking like us — the plane was nearly full.”

Hotel results have been mixed since Gov. David Ige ended a mandatory 14-day self quarantine for interisland passengers, said Mufi Hannemann, Hawaii Lodging & Tourism Association president and CEO. Interisland is not enough business to make a difference for many of Hawaii’s larger hotels, Hannemann said.

Nick Minerd, senior director of communications for hotel analytics company STR, said easing of quarantine measures can only help lift hotel demand, which has fallen more in Hawaii than in any other state in the country.

“What we have seen in other regions is there are indeed people ready to get out and stay in hotels as part of drive-to or short-haul leisure trips,” Minerd said. “Obviously Hawaii has plenty to offer the leisure guest, but the level of growth the industry will see from interisland traffic will depend mostly on traveler perception around safety and value.”

The results of a recent Honolulu Star-Advertiser survey of Hawaii hotels bear that out. The survey showed that only about 100 hotels out of 230 or so are currently open, and were open long before interisland travel was relaxed. Many Hawaii hotels closed in March as COVID-19 fears and tourism lockdowns reduced travel. Only a few more Hawaii hotels reopened just for the kamaaina market.

Top 25 hotel markets by Honolulu Star-Advertiser on Scribd

Some hotels surveyed by the Star-Advertiser planned to reopen in July, others said they would wait until the out-of-state passenger quarantine was lifted for at least some travelers. A handful of hotels planned to delay reopening until getting past the early days of the broader reopening, which they felt wouldn’t generate enough business for profits.

Ige is expected to announce soon that Hawaii is joining forces with a national partner to launch a testing program that would allow COVID-19-free passengers to bypass the quarantine.

Surfjack General Manager Lynette Eastman said that can’t happen fast enough for her and other visitor industry members. The delays also are affecting people like the Browns who depend on the industry. The couple, who own Akamai Coffee, said their Maui locations have been hit hard by a drop in visitor arrivals. Local sales also have declined as Maui battles the nation’s worst unemployment rate.

“Our sales are about 12% in Wailea, they are about 40% of our normal business in Kihei and 50% in Kahului,” Byron Brown said. “We were so excited when we hit the black by $10 yesterday. If Ige waits until Aug. 1 to welcome tourists back, it will be too late for some businesses.”

Surfjack’s business declined significantly in mid- March after the city and state adopted emergency orders that included a lockdown for locals and a passenger quarantine for out-of-state visitors. Eastman said losses only got worse after April 1, when the passenger quarantine was extended to interisland passengers, grounding regular guests like the Browns from traveling.

“Occupancy dropped so quickly. We went from 90% to 12%,” she said. “We had to furlough 70% of our staff and we had to close our restaurant too, after sales dropped from $8,000 a month to $300.”

Eastman said the improvement in her weekend business is heartening, but it’s going to take consistent occupancy of 70% or more to bring all of her employees back to work.

“I’m moving in the right direction. I’m almost at 60% occupancy in July and there’s a chance I could get to 80%,” Eastman said. “It really just depends on if Gov. Ige says extend the quarantine. Every time he does that my business drops immediately. I’m doing better than most, but I’m still in the red.”

Sean Dee, executive vice president & chief marketing officer for Outrigger Hospitality Group, said the company has seen a steady increase in local residents coming to enjoy staycations in Waikiki since publishing kamaaina rates, which start as low as $99 per night.

Weekend occupancy has run as high as 50%, with weekdays still hovering around 15%, Dee said.

“Outrigger Waikiki Beach Resort is a local favorite, and now that Duke’s is open it’s an especially great time to visit. Opening up interisland travel is a good first step for our state’s economic recovery, but to date hasn’t provided a noticeable spike in bookings,” he said. “We’re certainly grateful for the kamaaina business as the more guests we have in-house, the more people we can provide opportunities to work. The well-being of both our hosts and guests remain a top priority, which is why we implemented Outrigger’s Clean Commitment — our enhanced safety and sanitation protocols developed with Ecolab.”

Keith Vieira, principal of KV & Associates, Hospitality Consulting, said the lifting of the out-of-state passenger quarantine, or implementation of new programs that allow safe travelers to bypass it, is necessary for Hawaii’s visitor industry to begin heading down what surely will be a long path to profitability.

The tourism lockdown caused a 99.5% drop in visitor arrivals in April. Hawaii’s hotel industry, which plummeted in April, improved a little in May as essential workers got more familiar with garnering quarantine exemptions and more National Guard members arrived in Hawaii to help enforce emergency orders, Hannemann said.

STR said Friday that statewide hotel occupancy in May fell to 14.2%, an 82.1% drop from May 2019. The drop in travel demand also caused the average daily room rate to decline to $126.72, a 50.4% drop from May 2019. Revenue per available room (RevPAR) dropped to $17.95, a 91.1% decrease from May 2019. Revenue per available room, considered the best measure of hotel performance by many in the hotel industry, is the amount each hotel gets per room regardless if it’s occupied.

In the interim, the Hawaii Visitors and Convention Bureau has kicked off a “Kamaaina Special Offers Program,” which is available through Aug. 31 at HawaiiSpecial Offers.com/kamaaina/.

“Our communities have been vastly impacted by the COVID-19 pandemic, and as such it is important to us that we support our residents and local businesses,” John Monahan, HVCB president and CEO, said in a statement. “With the recent lifting of the interisland quarantine, the Kamaaina Special Offers Program creates opportunities for residents to reconnect with one another, explore and enjoy our island home, as well as bolster our local economy in the process.”

Caitlin and Carlos da Silva— owner and master brewer of a kombucha business— and their dog, Remy, hopped from their home in Maui to Oahu on Wednesday. Caitlin da Silva, who is on furlough from her aesthetician job, said they liked the idea of supporting Hawaii’s economy while taking advantage of great rates and the temporary slowdown in their own schedules.

“We hadn’t taken a vacation in about five years,” Carlos da Silva said. “We’re loving it. It’s pretty amazing to see Waikiki as it used to be without all the tourists. It’s definitely a once-in-a-lifetime experience that may never happen again.”

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