Restaurant industry leaders in Honolulu painted a very bleak picture for their businesses’ survival in testifying Wednesday before the City Council’s Economic Assistance and Revitalization Committee.
“Tourism might take four to five years to recover,” said Victor Lim, legislative liaison for the Hawaii Restaurant Association and McDonald’s franchise owner. “I really think that by the end of this year shrinkage of restaurants is by 20% to 30%.”
“To say our industry is taking a licking is an understatement,” Lim added. “All we are asking is for a chance to survive.”
He would like to see a resumption of visitors to the islands.
“We are a very tourist- based economy,” Lim said. “Just doing interisland business is not enough for our economic vitality. We need to open up our borders and bring outsiders back in.”
City Council members were sympathetic to the needs of the food industry.
Councilwoman Carol Fukunaga said the industry had the highest portion of unemployment claims, according to the University of Hawaii Economic Research Organization (UHERO), and the restaurant and hospitality industries were “extremely hard hit.”
Councilwoman Ann Kobayashi said since only half the tables in a restaurant are allowed to be used, “it may look full but they’re still not making the money they used to.”
Lim said when a restaurant is only allowed to be 50% full or less, many restaurant owners have chosen not to open because of all the health and Centers for Disease Control and Prevention requirements during the COVID-19 pandemic.
“Probably only 30% to 35% that could open have opened,” he estimated.
Sheryl Matsuoka, executive director of the Hawaii Restaurant Association, told the committee that a survey in April revealed 80% of Hawaii restaurant operators had to furlough employees.
They were encouraged to participate in the funding program, but what they received was inadequate to pay rent, insurance and utilities since dining rooms closed in March and income was at zero, she said.
While landlords are given property tax relief, she is working to have some of that passed on to the tenants.
Committee Chairman Tommy Waters asked if the association would support increasing the grant amount and increasing the eligibility of restaurants to qualify for the small business relief and recovery fund, to which Matsuoka said yes.
“It makes no sense to reopen if no one is coming,” she said. “The majority of hotels that are closed, their restaurants remain closed. Until hotels are reopened, restaurants will remain closed.”
She said the association is looking for more ways to help restaurants, such as temporary sidewalk dining.
She added that the association welcomes programs such as closing off Kalakaua Avenue in Waikiki to vehicular traffic and opening it up to pedestrians.
Matsuoka agreed with Waters that similar efforts could be done in neighborhoods such as Kailua and Kaimuki.
Waters said the city has a program that allows parking lots to be used for additional dining areas.
Lim said restaurants are faced with less than half the capacity of the seating area, having to pay for perishable goods, and still having to pay the same lease rent and wages for the same number of people to operate the business.
Lim said the association is trying to educate and encourage members to make use of the city’s available assistance by calling and asking for help.
Matsuoka asked the committee for a deferral of the start date to Jan. 1, 2022, of restrictions on plastic food containers and utensils, which she said “passed pre-COVID.”
Bill 40, signed into law Dec. 15 by the mayor, is now Ordinance 19-30. It bans polystyrene foam containers and all plastic food containers, as well as plastic forks, knives, spoons and other “service ware.”
The effective date of the ban on plastic service ware is set for Jan. 1, 2021. The ban on all other items will occur Jan. 1, 2022.
Lim said the local restaurant business has gone from 80% eat-in and 20% takeout to the reverse, so the most logical way to deal with it is to use single- use disposable utensils and packing.
Lim said this would allow restaurants a chance to recover without customers having to absorb the cost increase of more expensive alternatives.
Supporters of Bill 40 were willing to bend on the issue.
Lucy Fagan, a young testifier, said, “Local restaurants should be allowed to use up the rest of their single-use plastic,” but said it is “crucial to continue to push for a better future.”
Nicole Chatterson with Zero Waste Oahu, which backed the bill, said: “We want to do everything possible to support our small businesses.”
She said part of Bill 40 includes restaurants not giving out utensils unless they are requested.
Dyson Chee said he would like the City Council to consider an educational program to encourage local people to frequent small local businesses and restaurants, not national chain restaurants.
“They’re going to need the support of the community,” he said.
But Chee also said that there should be a look toward rebuilding the economy so it is sustainable in all ways, and said one of the biggest changes is with tourism, which is “not sustainable in its past form.”
“If we focus on using more eco-friendly and environmentally conscious alternatives to create a new economy and new area of economy,” it could increase demand and can contribute to new jobs.”