comscore Frustrated Hawaii businesses feel further delay in reopening could beget ‘economic catastrophe’ | Honolulu Star-Advertiser
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Frustrated Hawaii businesses feel further delay in reopening could beget ‘economic catastrophe’

  • Courtesy Honolulu Mayor Kirk Caldwell

    Honolulu Mayor Kirk Caldwell said on Thursday the governor and four mayors are meeting again to consider pushing back an earlier decision to lift the mandatory 14-day self-quarantine order on Aug. 1.

  • CINDY ELLEN RUSSELL / MAY 25
                                The hotels and beaches in Waikiki could be relatively empty until September.

    CINDY ELLEN RUSSELL / MAY 25

    The hotels and beaches in Waikiki could be relatively empty until September.

  • GEORGE F. LEE / GLEE@STARADVERTISER.COM
                                Honolulu Mayor Kirk Caldwell, above, spoke at a news conference on the construction site of the Aalii condominiums. He covered topics ranging the health of the construction industry and its workers to the larger issues of public health during the COVID-19 pandemic.

    GEORGE F. LEE / GLEE@STARADVERTISER.COM

    Honolulu Mayor Kirk Caldwell, above, spoke at a news conference on the construction site of the Aalii condominiums. He covered topics ranging the health of the construction industry and its workers to the larger issues of public health during the COVID-19 pandemic.

  • BRUCE ASATO / JUNE 25
                                The Moana Surfrider, a Westin Resort & Spa was one of the hotel properties that was planning to reopen on Aug. 1 when testing would begin for trans-Pacific visitors.

    BRUCE ASATO / JUNE 25

    The Moana Surfrider, a Westin Resort & Spa was one of the hotel properties that was planning to reopen on Aug. 1 when testing would begin for trans-Pacific visitors.

Hawaii residents and businesses are worried they won’t survive a delay in the planned reopening of tourism on Aug. 1.

“Without tourism we can’t pay bills,” said Nicole Niau, who worked as a manager at Lucky Strike up until her May 1 layoff following the closure of the entertainment venue at Ala Moana Center. “It’s not just me who has financial hardship, it’s everybody. All mom-and-pop stores here in Hawaii are closing down because they’re having a hard time paying bills.

“We depend on tourism so much that without tourists here it’s kind of a shock. The locals are here but we all stay home. We don’t go out, so there’s not enough money being generated to survive.”

To help revive the state’s largest economic segment, Gov. David Ige announced that the 14-day mandatory self- quarantine for arriving passengers would be lifted Aug. 1 for those who test negative for COVID-19 before arriving. But as cases surge here and on the mainland, state officials are now leaning toward pushing back that date.

Meanwhile, an extra $600 in weekly unemployment payments from the federal government to Hawaii’s 250,000 currently jobless residents will end July 31.

“It’s literally going to be an economic catastrophe from the bottom up. All of that’s coming to an end. It’s very frightening,” said Thomas Ray, co-owner of Square Barrels, a popular restaurant bar in downtown’s Bishop Square. “Once this $600 extra goes away for the unemployment insurance … we are going to see significant losses as the entire economy will just run out of money. When that goes away, that’s going to seriously limit their secondary money to go out and eat because they’re not going to get their jobs back, essentially, and that’s going to be devastating for businesses.”

The restaurateur has been preparing to open a second eatery in Kaimuki on Aug. 1, but now that is up in the air.

“It’s going to be devastating for the entirety of our economy, not just restaurants,” Ray said. “We’ve invested so much money and time to open up this second concept, and we’re going to open on a day when people’s income is effectively slashed by 50%. That’s the biggest source of anxiety for us right now.”

Hawaiian Airlines is scheduled to resume 12 of 13 flights between North America and Hawaii on Aug. 1, and many other businesses also are preparing to restart operations.

“We are concerned that each day that goes by that we delay the opening of tourism, that will equate to more businesses shutting down,” said Sherry Menor- McNamara, president and CEO of the Chamber of Commerce Hawaii, adding that 40% of businesses surveyed indicated they would not reopen until tourism does.

“If the economy doesn’t improve, then everybody will be in this precarious situation not knowing what’s going to happen today, tomorrow or weeks to come or months. We have to all put food on the table, and when jobs start going away there’s going to be a lot more economic and social impacts. It’s going to be a domino effect, and we just simply cannot afford that.”

The state government is projecting a $2.3 billion loss in revenue over the next two fiscal years as coronavirus cases in Hawaii continue to climb. There were 36 new confirmed COVID-19 cases reported Thursday, bringing the statewide number of infections to 1,130 since the start of the outbreak in February.

As of Thursday, 271 infections in Hawaii are active cases, with 840 patients now considered recovered — about 74% of those infected. Of all the confirmed Hawaii cases, 123 patients have required hospitalizations and 19 have died.

Roughly 1.2% of the 90,595 coronavirus tests conducted so far by state and clinical laboratories here have been positive.

Raymond Michaels, president of Maui Plumbing Inc., said while his business with 44 employees was fortunate to have been considered essential and has been working on long-term projects, many of his clients, including hotels and restaurants, are hanging by a thread.

“We are worried about the long-term economic impact of this, especially for our customers who aren’t considered essential. We probably won’t see the longer-term effects of this for probably another three to six months,” he said. “From what I’m hearing from other business owners … they were all hanging on as much as they could for this Aug. 1 opening.

“I know they’re in dire need of the tourism revenue. I don’t know how people pay for overhead without any revenue coming in. You can only do that for so long. The domino effect is going to be far and wide ranging.”

Mufi Hannemann, president and CEO of the Hawaii Lodging and Tourism Association, said a delay beyond Aug. 1 is “going to impose a tremendous hardship” on the ability of hotels to bring people back to work.

“With uncertainty of these dates, it just makes it harder to book and plan. There will be widespread ramifications because it’s costing some of our properties a million to a million and a half a month just to stay shuttered with the expenses they have to pay,” he said. “Hovering over all of them is the county property tax payments that are due in August. This is a double whammy in many ways.”

The government has failed to break down in detail what the industry must do to safely allow travelers to return to Hawaii, he added.

“We’re all for testing, we’re all for contact tracing, but they still haven’t been able to define for us where exactly can someone go to get tested that will yield immediate results. Also what’s up in the air is exemptions for families that travel and have children. We still don’t know what those age requirements are going to be,” Hannemann said.

“Far beyond what was happening with the spikes here locally and the surge in California, we kind of had an inkling that all of the t’s would not have been crossed and the i’s dotted for us to know how this process for people to come to Hawaii was going to take place. It will come as no surprise if they will delay the opening.”

Hannemann said the sooner the tourism industry knows exactly when it can start opening up, the better in terms of paying the “obligations and bills that keep mounting and, most important, when we can start bringing people back to work.”

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