Disaster could be lasting setback for economy

The wildfires on Maui are likely to have a major impact on the tourism industry — the state’s primary economic engine — with the Valley Isle as a huge draw for Hawaii’s core U.S. visitor market.

Maui led the tourism rebound after COVID-19, and although it’s had some slowing in recent months, statistics from the state Department of Business Economic Development and Tourism show that during the first half of the year Maui drew more than 1.48 million visitors, or 30% of all Hawaii tourists. It also generated $3.5 billion in visitor spending during the first six months of this year, or 32.3% of all the visitor spending to Hawaii.

The immediate and most devastating impact of the wildfires is the loss of life, homes and other infrastructure. The historic Best Western Pioneer Inn and The Plantation Inn are among the massive property losses of the wildfire sweeping through downtown Lahaina, and there’s the potential for the loss of additionalstructures to come.

Mufi Hannemann, president and CEO of the Hawaii Lodging &Tourism Association, said the Best Western Pioneer Inn at 658 Wharf St. was “obliterated — unfortunately, it was just destroyed.”

Built in 1901 by George Alan Freeland, the 34-room hotel was one of nine buildings that constitute the Lahaina Historic District. Best Western did not immediately respond to a request for comment.

Mike White, a Hawaii Tourism Authority board member, who confirmed that The Plantation Inn at 174 Lahainaluna Road had burned down, said he expects that there could be more hotels in Lahaina that have sustained damage and perhaps in nearby Napili- Honokowai, where there are quite a number of smaller properties. But getting updates has been challenging as phone and internet serv­ice in West Maui has been down.

“The loss of all business in Lahaina is so tragic along with hundreds of homes,” White said. “The devastation is so widespread it’s going to take a Herculean effort to provide housing and to get the businesses stood up again.”

Damage is still occurring and being assessed and people have only begun to come to terms those losses. Officials are focused on moving thousands of visitors out of Maui so that they can direct limited resources to residents.

Lisa Paulson, executive director of the Maui Hotel &Lodging Association, said “Right now, I’m working on life safety. I haven’t even wrapped my mind around the economic impact. I’m trying to get guests off the island — there’s an estimated 15,000 in Kaanapali without power, cells or communication. I don’t even have a number in Wailea yet.”

Still, it likely won’t take long for broader economic impacts to wreak havoc, too. Closures of hotels and other visitor industry businesses from damage or drops in arrivals can cause reductions in work hours or job losses that have a trickle-down economic impact. Worse yet in a state where many people live paycheck to paycheck, difficulties can drive people to move away from Hawaii as they did in droves during the pandemic plunge.

When visitors see scary images coming out of Maui or hear that officials have asked visitors to leave Maui, confusion about the geography of the Hawaii requires careful messaging to prevent the drop in arrivals from spreading.

It has happened following previous natural disasters.

The impacts of Hurricane Iniki, which devastated Kauai on Sept. 11, 1992, and wrought billions of dollars in direct damage, are still felt. Employment took years to recover. Coco Palms Resort, which was once frequented by Hollywood icons like Elvis Presley, fell into disrepair after it was hit by the hurricane and despite many stops and starts has yet to reopen.

Kona Village, shuttered in 2011 when a devastating earthquake-­generated tsunami sent waves surging across the Pacific, only reopened July 1 after a seven- year complete renovation. Hawaii County officials said several waves hit the coast, causing damage to homes, businesses, parks and roadways. Officials recalled that damage along the coast included at least one house being washed into Keala­kekua Bay by the waves. They said several hotels in South Kohala and North Kona were affected, including the Kona Village Resort.

In 2018, eruption-related tourism losses from Kilauea Volcano rose into the hundreds of millions of dollars. There were tourism impacts statewide as dramatic coverage of lava lakes and lava bombs scared some visitors away from Hawaii island. That caused problems with tourism bookings as far away as Kona and even other parts of Hawaii.

In 2019, Kauai’s tourism took a hit again when torrential rain caused massive flooding and landslides and like Maui’s current situation required the mass evacuation of visitors so that officials could focus limited resources on shoring up residents.

Hawaii Tourism Authority Public Affairs Officer Ilihia Gionson said, “It’s going to take a lot of education. During the Kilauea Volcano eruption, we had to tell people it was OK to go to other parts of Hawaii, even Hawaii island. Our work is just beginning.”

White said eventually the messaging will have to include updates on the parts of Maui that are untouched by the devastation and where hotels can still operate. He said dissuading visitors for too long, “risks further loss of jobs.”

“We have to fill in the gaps and make sure that people understand that there are still many things to do and many places in full operation even on Maui,” he said.

A challenge is that Maui was caught flat-footed by this disaster, and there have been logistical difficulties in moving visitors off Maui, where on any given day in June the average daily visitor census was 71,790. Communication woes, power outages, ground transportation issues and road closures all are taking a toll.

The Hawai‘i Convention Center had been prepared early Wednesday to accept as many as 4,000 visitors. By evening only a few dozen had arrived.

Peter Ingram, Hawaiian Airlines president and CEO, said during a news conference Wednesday afternoon that the carrier had added flights, but its regularly scheduled flights were not full.

Vancouver, British Columbia, resident Tong Zhang said she wasn’t actually near any of the fires herself while visiting Maui, but was stuck at the airport since Tuesday night.

Her original flight to Seattle, which was the first leg of her trip back home to Canada, was canceled Tuesday evening. A rescheduled flight was canceled as well.

“I was supposed to fly at 9 p.m. (Tuesday) from Maui to Seattle, and that flight got canceled,” Zhang said. “I was supposed to fly to Seattle (Wednesday) afternoon at 3 p.m., but they said they can’t fly us to Seattle and to fly us here (to Honolulu).”

Zhang didn’t need the help of those at the convention center and was able to reschedule a flight home herself for this afternoon. She has a friend on Oahu and was able to spend the night with her.

Paulson said the mass evacuations with large buses to the airport didn’t start until late Wednesday afternoon because proper escorts were needed for the restricted bypass.

Another challenge is that many members of Maui’s visitor industry have been affected themselves.

Hannemann, a recent appointee to the HTA board, said,“We are concentrating on No. 1 making sure that our guests have a place to stay and that there’s a place to stay for workers and people in the community who may have lost their homes,” Hannemann said. Hotels that are open are 100% occupied. They are fully reaching out into the community.”

The Council for Native Hawaiian Advancement, which recently was selected for an HTA destination stewardship contract, already has seen great support for its Kako‘o Maui Donation Campaign, and now with the support of partners like the Alaka‘ina Foundation Family of Companies and Kameha­meha Schools, and an anonymous donor hopes to raise $500,000 to assist those on Maui affected by the wildfires. Online donations are open at HawaiianCouncil.org/Maui.

White said that at least eight of the staff at the Ka‘anapali Beach Hotel and The Plantation Inn have lost their homes.

“Imagine combining the loss of your home with the potential loss of your job. It’s simply heartbreaking,” White said.

Jay Talwar, Hawaii Visitors &Convention Bureau chief marketing officer, said two of their staff on Maui have learned that their homes have been destroyed and a third is enduring the uncertainty of waiting to find out. Still, he said everyone is working to help visitors who are on Maui and to let others know, “Now is not the time to visit Maui.”

“Our call center has been very busy. It’s mostly people who are planning to come. We are sharing as much as we can as quickly as we can,” Talwar said. “At this point, our hotels and airline partners may be steering them to other islands.”