Hotels, attractions face uncertain future following tourism reopening delay

Thanks to military orders and kamaaina summer vacationers, Surfjack Hotel & Swim Club has been running at 70% for the last six to eight weeks.

While a majority of Hawaii’s hotels closed at some point during the COVID-19 pandemic, so far the 112-room Surfjack has managed to stay open. However, the Waikiki hotel’s future is more uncertain following a Monday decision from Gov. David Ige to postpone the launch of a pre-arrivals testing program to Sept. 1, a monthlong delay.

“As soon as they started hinting about the delay, I started to get cancellations,” said Surfjack General Manager Lynette Eastman. “My September occupancy is now at 20%, my October is at 12% and I’ve got less than 10% for November and December. And, there’s literally no business on the books for 2021. If that doesn’t change, closure is a possibility and that’s terrifying given that my employees will no longer have the CARES Act funds to help them.”

Eastman, like many other Hawaii hoteliers, was optimistic that the pre-arrivals program would provide a pathway to recover some of the Hawaii tourism that collapsed following the March 26 implementation of a 14-day self-quarantine for out-of-state passengers.

Normally on any given day in Hawaii in July, about 35,000 passengers arrive, most of them visitors. In July 2019, some 997,872 visitors arrived on planes. In the first 13 days of this month, visitor arrivals only hit 8,663. On Monday, there were only 467 visitors, a number that’s more akin to a rounding error on a spreadsheet than a reason for businesses to keep the lights on.

Staying closed

As of July 1, less than half of the approximately 270 top hotels, timeshares and condominium hotels had reopened. About 90 of the 140 or so properties that were closed planned to stay shuttered past Aug. 1, the original pre-arrivals launch.

The decision to postpone Hawaii’s pre-arrivals testing program has put another 60 of the closed properties, or about 40% that had planned on reopening by Aug. 1, into limbo again.

Halekulani Corp. said Tuesday that it intended to reopen Halepuna Waikiki later this year, but would delay reopening the Halekulani, one of the state’s top luxury hotels, to July 2021.

“With circumstances changing almost daily, including prevalence of the pandemic, governmental guidelines and decrees, personal protective equipment and social distancing, Halekulani will embark on a yearlong renewal and revitalization project with plans to reopen in July of 2021,” Peter Shaindlin, chief operating officer at Halekulani Corporation, said in a statement.

Eastman said Halekulani is the first Hawaii hotel to announce an extended delay, but she expects it won’t be the last.

“Some hotels that were gearing up to bring employees back to start training for an Aug. 1 or Aug. 15 reopening are having to push back their plans. The big brand box hotels with the highest room counts are the most affected,” Eastman said. “Thank God I’m a small hotel. But even then, I’ve still got 34 of my 82 employees out on furlough.”

Attractions hit hard

Hawaii’s activities and attractions also have been hit hard by the delay, said Toni Marie Davis, executive director of Activities & Attractions Association of Hawaii (A3H).

“Many activities and attractions have been in limbo for quite some time, but this last blow was it. Following the announcement, I’m seeing 98% of our businesses going into sleep mode,” Davis said. “The kamaaina economy doesn’t make sense for them. Many won’t reopen until they see hotel occupancy hit at least 50%.”

Interisland travel got a bit of a boost on June 16 when Ige ended an interisland passenger quarantine, but not enough to entice many hotels that had temporarily shuttered during the tourism lockdown to reopen.

As it turns out, travelers don’t much like having to confine themselves in a designated location for two weeks after arriving in Hawaii or facing up to one year in jail and a $5,000 fine. So it’s thought that travel demand will improve if passengers with approved negative COVID-19 tests taken within 72 hours of their trip to Hawaii are allowed to bypass the quarantine starting Sept. 1.

However, Mufi Hannemann, Hawaii Lodging and Tourism Association president and CEO, said there can’t be any more waffling on the reopening date if Hawaii tourism is to stand a chance at recovery.

“We had a visitor industry management stakeholders meeting today and everyone was very clear that we must not go beyond the Sept. 1 date,” Hannemann said. “If we do, it will be very damaging to our economy and will lead to other problems like domestic strife from people not working and wondering where their next paycheck is coming from.”

Hannemann said the industry has adopted new safety standards and protocols that have been vetted by the state Department of Health as well as the county mayors.

“We want to make it very clear that we are ready,” Hannemann said. “If there are more logistics and details to work out that should be done sooner than later and we want a seat at the table.”

The Hawaii Visitors and Convention Bureau also is ready with a new campaign called “It’s Time” to help the visitor industry begin welcoming back visitors.

HVCB Chief Marketing Officer Jay Talwar said the campaign will be HVCB’s first marketing effort since April when the agency asked publications, editors and freelancers who cover and write about Hawaii to stop promoting the destination.

Talwar said the campaign concentrates on encouraging pono visitors, who support Hawaii’s health, safety, cultural and environmental sustainability goals, to travel to Hawaii. It will continue some of the messaging from HVCB’s earlier “Rooted,” campaign which shared Hawaii values with visitors and its “Kuleana” campaign which encouraged respectful tourism.

“We have a great opportunity to look at how to rebuild tourism to benefit the community,” Talwar said. “We know that now is not the right time to market to the country nationally. We are going to be more focused and specific to get the right visitors back.”

The campaign still needs to be approved by the Hawaii Tourism Authority board, which meets on July 30.