Hawaii sees July visitor arrivals plummet 98% from a year ago

Only 22,562 visitors flew to Hawaii in July, which last year was Hawaii’s best tourism month.

That’s a 98% drop from the 995,210 visitors who came in July 2019, according to preliminary statistics released by the Hawaii Tourism Authority on Thursday. Overall, visitor arrivals to Hawaii in the first seven months of the year plummeted about 65%.

That’s way worse than what most economists had initially envisioned, and it’s not like they were painting rosy pictures. Hawaii’s visitor industry remains under siege as COVID-19 containment measures and dropping visitor demand have slowed tourism — the largest contributor to the state’s growth — to a trickle.

In February, the University of Hawaii Economic Research Organization was still forecasting Hawaii’s visitor arrivals would finish the year 1.8% above the record 10.4 million arrivals in 2019. At that time, the researchers weren’t the only economists who thought a strong domestic market would balance out losses from China and other Asian markets.

By late March, UHERO said it expected visitor arrivals and visitor spending to drop about 41% this year. That forecast assumed the tourism economy would completely shut down and get back to a fraction of last year’s business in June.

Come late May, UHERO anticipated that tourists would begin to return in late July, and year-end arrivals would average nearly 60% lower than in 2019. Based on that scenario, it expected a recovery so gradual that by 2022 there would be just over 8 million visitors to the state, compared with more than 10 million in 2019. Statewide hotel occupancy, it expected, would average just 63% in 2022 compared with 81% in 2019.

UHERO’s late May forecast also outlined a more pessimistic scenario that assumed tourism wouldn’t reopen in a significant way until autumn. In that forecast, UHERO said visitor arrivals would “post an annual decline of 70% this year and remain significantly below the 2019 peak through the end of the forecast horizon.”

Carl Bonham, UHERO executive director, said in an email that UHERO was working on a new update.

How low can Hawaii tourism go?

Paul Brewbaker, principal of TZ Economics, said myriad factors will determine Hawaii’s recovery pattern, which he said is likely either a swoosh — a steep downside gradient, then a partial bounce, followed by a gradual recovery — or a U, which represents a longer recovery with a less defined trough.

The answer depends on when Hawaii tourism reopens, how much COVID-19 cases are raging in Hawaii and in its source tourism markets, and if any new developments come to fruition. Travel would benefit immensely if cheap, convenient, reliable COVID-19 testing became available on a broad scale. The emergence of a COVID-19 vaccination or medication also would be a game-changer.

“The objective here now this fall is to try not to let it just play out as a U-shaped recovery until next summer whenever the vaccination rises,” Brewbaker said. “That’s just a slow grinding economic death, right? There will be nothing left next summer but the living dead. It will be the zombie apocalypse.”

After spending months on the bottom, visitor industry leaders have begun turning to worst-case scenarios in their playbooks.

It was February when Hawaii tourism last saw any gains, and hardships are mounting as the tourism lockdown that started in March has headed into fall. HTA reported that only 1,695 passengers flew into Hawaii on 32 flights on Wednesday and of those only 397 were visitors.

Gov. David Ige recently pushed a pre-arrivals testing program back to Oct. 1 that would have allowed trans-Pacific passengers with approved negative COVID-19 tests taken within 72 hours of their trip to Hawaii to bypass the state’s mandatory 14-day self-quarantine. Earlier Ige had announced Aug. 1 and Sept. 1 as reopening dates.

A mandatory 14-day quarantine remains in effect for out-of-state travelers to reduce the spread of COVID-19. A partial interisland quarantine also was reinstated on Aug. 11. Most beaches, hiking trails and businesses also are closed on Oahu, where Honolulu Mayor Kirk Caldwell, with Ige’s permission, has implemented a new stay-at-home order.

“If this goes on much past Christmas, I think we’ll see a mass exodus of people leaving the state,” said Waikiki resident Dave Moskowitz, who since March has been laid off from BLT Steak Waikiki.“Even if there’s some recovery, people are worried that it won’t be enough to support all of the jobs that were lost. Workers are making tough decisions.”

Employers are struggling through the downturn too. Keith Vieira, principal of KV &Associates, Hospitality Consulting, said some hotels have benefited from essential travelers — but only a little. Also, a few hotels report­- ed some weekend leisure travel gains from June 16 to Aug. 11, when Hawaii’s interisland travel quarantine was lifted across all isles.

“Most of the hotels in the state, including the major ones, are still closed,” Vieira said. “If you look at the visitor arrivals, most are coming in and staying with friends and family or alternative accommodations. Very few are going to hotels, where they know the quarantines will be enforced. “

Both travel lockdowns have garnered mixed reviews. The visitor industry generally has said it can’t recover until there’s a way for visitors to bypass the quarantine, although fear of travel remains an impediment.

Quarantines and other lockdowns also have been unpopular with some residents, who view it as an intrusion on personal freedom and prevents them from staying close to friends and family.

Adding to the confusion, earlier this week the Centers for Disease Control and Prevention modified its recommendation that travelers self-quarantine for 14 days following a trip out of the country, or out of the state.

Still, many local residents, especially those in the health care community, support steps to mitigate a surge in COVID-19 cases.

On Thursday the Kauai Chamber of Commerce released the results of a survey indicating that its business community prioritizes health and safety, although it’s suffering greatly.

The Kauai Chamber, which surveyed 129 businesses from Aug. 13 to 18, said almost 40% of the businesses said that they will close in the next six months unless visitors return to Kauai.

However, more than 70% said they supported a quarantine to safeguard the community. Over 75% also indicated that Kauai was not ready to reopen to tourism until either a vaccine or standard medical treatment for COVID-19 was found or cases dropped statewide and there were adequate medical resources.

Mark Perriello, president and CEO of the Kauai Chamber said in a statement, “Our businesses are willingly sacrificing in order to ensure the health and safety of our families, friends, and neighbors.”

Still, he said, “More will need to be done in order to keep our local businesses afloat during this ongoing economic crisis.”