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Hawaii, like other destinations, struggles to reopen tourism

                                Amelia Lim, managing director for CBRE Hotels Advisory in Hawaii, said because of the slowdown in tourism and low RevPAR forecast, some hotel assets in Hawaii may be better served by conversion into residential housing. Above, a guest at a Waikiki hotel relaxed Sunday in a hanging wicker chair.


    Amelia Lim, managing director for CBRE Hotels Advisory in Hawaii, said because of the slowdown in tourism and low RevPAR forecast, some hotel assets in Hawaii may be better served by conversion into residential housing. Above, a guest at a Waikiki hotel relaxed Sunday in a hanging wicker chair.

Destinations across most of the U.S. and in many foreign countries have reopened tourism, but so far none have figured out how to get large numbers of tourists to return to the skies.

Even results for drive-to locations have been pretty wobbly.

A glimmer of a promising recovery emerged in some drive-to markets in May and June; however, it had all but disappeared by July, which is typically the peak summer travel month.

What happened?

COVID-19 proved more tenacious than first thought and a new round of infections spread across the U.S. without a consistent national response. For instance, even as case counts in Georgia rise, Gov. Brian Kemp is suing Atlanta Mayor Keisha Lance Bottoms over orders mandating masks and enforcing social distancing measures. On the other hand, some places in California that thought they had seen the worst have initiated a second set of health and public safety lockdowns.

Similar chasms are taking place worldwide as many tourism destinations begin to pull back from various stages of reopening either out of public health concern or because arrivals and spending aren’t robust enough to pencil out.

“From the outlook that we are seeing, the COVID-19 traveler is turning into an oxymoron — because no one is traveling due to COVID-19,” said Chris Kam, OmniTrak president. “We’re hearing from our clients that travel demand weakened significantly in the second half of June. People are holding off their vacations to fall and possibly beyond that to some time next year. It’s not just air travel, it’s car travel too.”

As a result, even members of Hawaii’s tourism and commercial real estate industry and some economists are espousing a cautious approach to reopening timelines.

Some 63% of a commercial real estate audience, attending a Thursday Zoom webinar put on by the Certified Commercial Investment Members and the Pacific Asia Travel Association, agreed with Gov. David Ige’s decision to delay the start of pre- arrivals testing until at least Sept. 1. The program would allow passengers who have taken an approved COVID-19 test within 72 hours of their Hawaii trip and can produce a negative result upon arrival to bypass a mandatory 14-day self-quarantine.

Ige’s postponement was based in part on a disconcerting level of community- spread infections emerging in Hawaii after Memorial Day. He said he also was concerned with mounting cases on the mainland, especially in the main places where Hawaii sources visitors, and the planned Aug. 4 start of Hawaii public schools.

The commercial real estate group, however, was more receptive to targeted tourism. Some 88% of the group favored forming international travel bubbles that would allow for an ease of travel restrictions between Hawaii and like-minded destinations such as Japan that also have relatively low COVID-19 counts.

“The problem with that is that we aren’t welcomed abroad, and even a drive market like Canada isn’t open to us,” Kam said. “I was a little surprised by how many supported the governor’s decision to extend the lockdown. But increasingly people seem to appreciate the importance of maintaining health regardless of the economic impacts.”

Tourism officials from around the world, including Hawaii, who are participating in an ongoing series of open online discussions at, also are cautious about aggressively pursuing reopening scenarios, said Peter Tarlow, a world-renowned tourism and safety security expert on the executive board.

Tarlow said COVID-19 conditions are changing rapidly and there have been relatively few tourism success stories, although social distancing, masks and slower reopenings seem to result in better outcomes. Most destinations also favor reopening domestic travel before welcoming visitors from nearby regions or international arrivals, he said.

Germany, which limits tourism based on COVID counts per 100,000, appears to have found balance at the moment. Tarlow said Northern Europe mostly has fared better than Southern Europe.

England also has been successful with some limited openings; on the other hand, Tarlow said the economy is coming back much slower than people thought it would.

The Canary Islands are mostly open; however Barcelona has began to pull back, he said.

Tarlow said Greece’s reopening was going well at first, but conditions became problematic when Greece started to get drive-to traffic from an open-land border with the Balkans.

Tarlow said Latin America and Mexico are having a tough time. He said conditions have worsened in Thailand. Japan and some other parts of Asia are doing better, albeit Tarlow said there’s still uncertainty about whether China’s reports are accurate.

Australia and South Africa, which are entering their winter seasons, are struggling again, he said.

Quarantines in Hawaii and other U.S. destinations have been blamed for the collapse of tourism, which in Hawaii fell to 564 visitors on Saturday. Normally in July, the state receives about 35,000 daily passengers, most of them tourists. However, Paul Brewbaker, principal of TZ Economics, said Friday that fear of COVID-19 is the main reason that Hawaii tourism is still in a tailspin.

“People aren’t sitting at home saying ‘I would be coming to Hawaii if it weren’t for the quarantine,’” Brewbaker said. “They aren’t coming on planes because they don’t want the novel coronavirus.”

Given Hawaii’s dependence on tourism, there’s tremendous pressure to reopen Hawaii tourism soon. However, Brewbaker said Hawaii officials must remember that “history tells us reopening too soon is deadly for health and economies.”

Brewbaker said data sets from the 1918 flu pandemic show that destinations that locked down too late or reopened too early fared much worse from a health and economic perspective.

“The solution to the economic problem is the solution to the public health problem. They aren’t separate,” Brewbaker said. “People won’t travel if the pandemic is still hot.”

Amelia Lim, managing director for CBRE Hotels Advisory in Hawaii, said Thursday at the PATA event that hotel data sets reflect new slowdowns in travel demand.

“We are not that optimistic about how recovery is going,” Lim said. “Oahu will be the laggard.” She said that’s based on how long Oahu’s recovery will take because of COVID.

According to Lim, by 2023 Oahu’s revenue per available room forecast won’t even have returned to 90% of where it was in 2019. RevPAR, the amount of revenue that each hotel room generates regardless of its occupancy status, has long been considered the most telling measure of hotel economic performance.

Lim said ultimately some hotel assets in Hawaii and elsewhere might best be served by conversion into other uses such as residential housing.

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