Lanai’s largest employer has ended a unique job-support program that had kept more than half the island’s workforce off unemployment or other government income programs since March.
Lanai Resorts LLC informed state and Maui County officials last week that it has furloughed or temporarily laid off 752 workers at its two Four Seasons Resort properties, owned by billionaire Larry Ellison.
The move is expected to blow up Lanai’s unemployment rate to around 58% and make it the highest of any island by far after staying under 5% this year through July.
Lanai has a workforce of about 1,300 people among a population of roughly 3,000 that includes many retired former pineapple plantation workers on an island that has overwhelmingly relied on tourism since the 1990s.
Previously, the two resorts, the island’s major employers, had kept all hotel workers on full pay and benefits despite the fallout from COVID-19 that has wrecked Hawaii’s visitor industry over the last six months.
Ellison’s generosity drew praise from Maui County Mayor Mike Victorino, who in April said: “Lanai is really, really, really fortunate. I think there’s some, really, mahalos that need to go to Larry. Yes, he’s a billionaire, but he’s given his kindness to the people who have helped him all these years on the island of Lanai.”
Ellison, who bought 98% of Lanai in 2012 and manages his holdings through an affiliate of Lanai Resorts called Pulama Lanai, continued providing full pay and benefits through July for all of Pulama’s roughly 1,250 workers on the island, which include workers beyond the two hotels.
Pulama said on Wednesday that it implemented layoffs and furloughs affecting about 15% of its staff on Lanai and in Honolulu in addition to Lanai resort workers, though the company did not share the number of employees affected.
“While we have implemented a number of cost-reduction measures, with no firm date for travel restrictions to be lifted, our hospitality and construction operations remain in limbo,” Pulama said in a statement. “These two operations are responsible for the bulk of our employment on Lanai. With regret, we are left with little choice but to take these steps to ensure the company can continue through this difficult time.”
The two hotels, which were re-branded as Sensei Lanai and the Four Seasons Resort Lanai after Ellison spent $150 million on improvements, anticipated welcoming out-of-state guests two days ago based on an expected lifting of the state’s 14-day mandatory quarantine for visitors who obtain a negative COVID-19 test within 72 hours of travel.
However, Gov. David Ige deferred this travel program on Aug. 18 after deciding on Aug. 6 to also impose a mandatory 14-day quarantine for any travel to a neighbor island, which effectively put the brakes on travel between islands by Hawaii residents other than those visiting Oahu.
Victorino supported the new interisland travel restriction, and said on Tuesday that the county would try to help support the unemployed on Lanai with health services, unemployment connections and food drives.
“Unfortunately, as this pandemic has gone on longer and longer, they’re unable to reopen and so I understand their position,” the mayor said at a briefing Tuesday. “The necessity for (helping the Lanai) people, the workers, wasn’t there because Mr. Ellison had paid them for four months straight — full wages and full benefits. I hope that this will pass very soon, but in the interim, I understand and we will do and we stand ready to help them in any way.”
Lanai Resorts said in its layoff notice to the state Department of Labor and Industrial Relations that the layoffs and furloughs were effective on or about Aug. 11, though the letter was dated Aug. 27 and received Aug. 31.
The timing didn’t meet a 60-day advance notice under federal law for mass layoffs, but Lanai Resorts said it issued the notice as soon as practicable in part due to multiple local government emergency orders related to COVID-19.
“The entire property and its operations will be closed for business for the foreseeable future,” the company said in the notice. “Four Seasons Resorts Lanai intends for this furlough and layoff to be temporary; however, given the unknown certainty surrounding COVID-19, it is possible that the furlough and layoff become permanent.”
Lanai Resorts isn’t the only one taking such actions.
About 20 other major visitor industry businesses have filed new or amended mass layoff notices in the last month, including some employers that had previously furloughed employees for what they thought would be for less than six months and have now filed new or updated layoff notices because of a longer-than-anticipated duration.
Hilton Hawaiian Village Waikiki Beach Resort cited uncertainty over local government leaders allowing the revival of tourism for its Aug. 3 notification affecting 1,800 employees.
“Contrary to our expectations, government orders continue to impose substantial limits on our operations,” the company said in its notice.
Others that filed mass layoff notices in recent weeks include Kahala Resort, duty-free retailer DFS Group LP, Fairmont Kea Lani Maui, Hawaiian Airlines, Polynesian Cultural Center, Grand Wailea, Kualoa Ranch, airport food service firm HMS Host, Hyatt Regency Waikiki and Four Seasons hotels on Oahu, Maui and Hawaii island.