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Struggle of North Shore’s largest employers reaches deep into tourism-dependent community

  • JAMM AQUINO / JAQUINO@STARADVERTISER.COM
                                Oahu’s North Shore, where most residents and businesses rely on tourism for economic survival, has been among the communities hardest-hit by the tourism collapse. The impact is enormous, affecting businesses from surf schools to farmers. Above, tables sit empty at the Hukilau Marketplace near the Polynesian Cultural Center.

    JAMM AQUINO / JAQUINO@STARADVERTISER.COM

    Oahu’s North Shore, where most residents and businesses rely on tourism for economic survival, has been among the communities hardest-hit by the tourism collapse. The impact is enormous, affecting businesses from surf schools to farmers. Above, tables sit empty at the Hukilau Marketplace near the Polynesian Cultural Center.

  • JAMM AQUINO / JAQUINO@STARADVERTISER.COM
                                Turtle Bay Resort, the largest employer in the area, is still closed.

    JAMM AQUINO / JAQUINO@STARADVERTISER.COM

    Turtle Bay Resort, the largest employer in the area, is still closed.

  • JAMM AQUINO / JAQUINO@STARADVERTISER.COM
                                <strong>Jerry Gibson</strong>
                                <em>Vice president, Turtle Bay Resort, pictured above with Kirsten, one of the resort’s horses</em>

    JAMM AQUINO / JAQUINO@STARADVERTISER.COM

    Jerry Gibson

    Vice president, Turtle Bay Resort, pictured above with Kirsten, one of the resort’s horses

The managers of Waimea Valley called an all-staff meeting in late August to tell employees, “Don’t worry, we’ll get through the pandemic.”

The staff went from 72 employees to 26 in March amid coronavirus-related fears and government lockdowns. It closed for a time and reopened June 5 with 44 workers and a focus on attracting more kamaaina and military to the cultural and nature park, a North Shore ahupuaa stretching from the mountains to the sea.

Richard Pezzulo, executive director of Hi‘ipaka LLC, owner and manager of Waimea Valley, said reopening garnered only about 20% of the nonprofit’s pre-COVID business, but it returned some hope.

Then, Honolulu Mayor Kirk Caldwell ordered a second stay-at-home order for Aug. 27, which he has since extended through at least Sept. 23.

“Just two hours after that optimistic all-staff meeting, I found myself sitting with the managers, talking about who do we furlough now and how do we get on,” Pezzulo said. “We went back down to 24 workers, even less than we had during the first shutdown.”

Almost all jobs on the North Shore are tourism-related, so Pezzulo said the community has been harder-hit than most as employers are forced to extend temporary closures or permanently close.

“The uncertainty is taking its toll on businesses and on individuals. There’s a lot of anxiety with families that are working and those that are not,” he said.

Now Waimea Valley is running on reserves, a worrisome proposition for the nonprofit whose Native Hawaiian cultural roots go back to at least the 11th century, when it first became known as a “sacred valley of the priests.”

Pezzulo figures Waimea Valley can make it until at least the end of April, which he hopes will be long enough to weather the storm. He doesn’t expect tourism, which dropped 98% in July and 65% for the year, will come back any sooner.

Gov. David Ige has twice pushed a pre-arrivals reopening plan. The plan, which was first announced in June, was originally going to launch Aug. 1, then Sept. 1 and now Oct. 1 at the earliest, and what few guidelines Hawaii has haven’t been updated.

Turtle Bay Resort, the largest employer on the North Shore, is still closed, and employment there has dropped to about 20 employees from more than 740 before the pandemic.

Jerry Gibson, Turtle Bay Resort vice president, said the resort still hasn’t decided when to reopen, and only recently decided to cancel all of its October reservations.

“We want to reopen, but we want to make sure it’s the right time,” Gibson said. “The state needs to be healthy, and visitors need to be able to come here and be able to enjoy what we have to offer. There’s also got to be enough travel demand, which we think is going to be just a trickle in the beginning.

“In the meantime we know this is really hard on the community. About 80% of the people that work at the hotel live within a 10-mile radius,” he said. “People were OK at first because of the stimulus and plus-up money, but I worry as this drags on.”

Gibson said 432 cars recently came through the resort when it sponsored a food and produce giveaway. In addition to food distributions, Gibson said the resort is supporting a community garden, which has helped provide food and income for some North Shore residents.

Turtle Bay Resort’s closure also has been tough on the owners, who need to maintain building security and systems, he said. But they’ve been taking advantage of the lull to forge ahead on planned redevelopment projects. Additionally, a painted mural is taking shape by the employee entrance to cheer the team when they come back.

“The mural is a symbol of hope,” Gibson said. “We know that tourism will come back. We just don’t know when.”

Other large North Shore employers, like Kualoa Ranch and the Polynesian Cultural Center, also have filed Worker Adjustment and Retraining Notification Act notices warning that continued uncertainty could lead to extended closures and mass furloughs.

John Morgan, president of Kualoa Ranch, said even without the shutdowns, business has been off about 90% from pre-coronavirus times.

“We closed March 16 and reopened for all of June, July and for most of August,” Morgan said. “We originally furloughed 250 out of 370. Then we brought back a whole bunch of employees, even during the stay-at-home time, by repositioning them into essential categories in April. We got a lot of work done fixing up the place and painting and doing agricultural and landscape.”

Still, business wasn’t strong enough to prevent the company from filing a layoffs notice even before Caldwell’s second shutdown order.

“We can’t survive on just the local and military market,” Morgan said. “Until the mandatory 14-day self- quarantine is lifted, the tourism industry and the economy will suffer. Reopening tourism safely needs to be the highest priority.”

The instability of the North Shore’s largest employers is contributing to the trickle-down impacts experienced by smaller businesses.

So Da Bomb, a beverage truck in the Hukilau Marketplace, is struggling; before COVID-19, its owner Kalin Uluave said, it had experienced its best six weeks ever.

“We were excited for a busy summer and had just renewed our lease two weeks before the first shutdown,” said Uluave, a former Brigham Young University-Hawaii student who launched the concept nearly four years ago after winning $5,000 in a university business competition.

After the shutdown hit, Uluave said, the Polynesian Cultural Center (PCC) temporarily closed, and while the Hukilau Marketplace stayed open, sales fell about 85%, forcing him to furlough all but one of his nine employees.

He’s been able to keep the business alive with savings and the generosity of PCC, which worked with its tenants, and initially kept nearly all employees who wanted to keep working on the payroll. The center also encouraged its employees and their families to support the Hukilau Marketplace and other local businesses.

“My wife and I had been saving, and we were planning to buy a house next year in Laie. But six months living off savings really has decimated that dream,” he said. “It’s not looking like it’s going to get better, either. PCC has pretty much had to let go of anyone and everyone. They have a skeleton crew. They’ve got vice presidents changing the trash cans.”

Uluave said he’s felt the impact of PCC’s struggles not just at work, but also in his community, where as many as eight families on his street already have packed shipping containers and left the island.

Increased unemployment as well as a drop in enrollment at BYUH have meant fewer customers for businesses and fewer long-term renters in the community, he said.

“The writing is on the wall for a lot of people. Unemployment checks only last so long, and leaders of the state and economists are saying it could take five years to get back to 2019 tourism numbers,” Uluave said.

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