Facing Economic Devastation, Hawaii Attempts To Revive Tourism

Hawaii has some the highest levels of unemployment in the country. Joblessness rose to Great Depression-levels in the spring following shutdown orders that local authorities issued in March.

In addition to the business closures and restrictions on large gatherings common across the country, Hawaii was also the first state to require out-of-state travelers to quarantine upon arrival.

That, combined with public concerns over the safety of flying, tanked Hawaii's tourism-centric economy.

For seven months, Honolulu's Daniel K. Inouye International Airport has been largely empty. The concourses have been marked by shuttered concessions shops and public address announcements directing people to quarantine.

The scene represents a stark reversal from the time before COVID-19. Roughly 30,000 people arrived in Hawaii every day during 2019, although the number approached 40,000 during the summer travel season.

That number has declined dramatically since the onset of the pandemic. During the initial lockdowns in the spring, the number of daily arrivals dropped below 500.

The drop coincided with Gov. David Ige's order in March that all travelers arriving from out of state undergo a 14-day self-quarantine upon arrival.

While the measure was initially successful in preventing the spread of the virus, it came at a steep cost. The drop in visitors sent a shockwave through the state's $18 billion tourism industry, which represents the foundation of Hawaii's economy.

Unemployment surged, reaching almost 24% in April and May.

Although the situation has improved somewhat since then, 1 in 6 workers are still out of a job. They are people like Christina Hilfiker, who was a restaurant server in the popular tourist destination of Haleiwa on Oahu's iconic North Shore.

Hilfiker lost her job in March and said she is struggling to get by.

"I'm sort of hanging on by a thread, relying on friends and family. You can get a lot of miles out of a loaf of bread and a jar of peanut butter," she said in an interview.

Hilfiker is one of thousands of Hawaii residents who have experienced lengthy delays in getting approved for jobless benefits.

Like many states, Hawaii's unemployment system has been overwhelmed, saddling applicants with the financial and emotional stress of no income for weeks and even months.

Hawaii's local businesses are also struggling. They have endured not just one, but two full lockdowns — one in the spring and a second later in the summer when the state experienced a surge of new infections.

Many businesses were being sustained by federal benefits from the CARES Act, but those have long since run out.

"It's just really crushing not to get the help," said Melissa Bow, owner of Via Gelato, an ice cream shop in the Honolulu neighborhood of Kaimuki.

She said in an interview that during the second lockdown, many small-business owners were at the end of their rope, struggling to make rent with being able to generate revenue.

"They're just so, so tired," Bow said of her fellow entrepreneurs. "Not sleeping at night, zero income for a long time. No help on the horizon. They're thinking about shuttering their business."

However, help may be on the way. The state of Hawaii recently adjusted its travel rules, allowing incoming passengers who test negative for the coronavirus to skip the quarantine.

That is significant because tourism represents nearly a quarter of Hawaii's economy, according to Sumner La Croix, an economist with the University of Hawaii Economic Research Organization and author of Hawai'i: Eight Hundred Years of Political and Economic Change.

"That's a huge chunk and if that 23% isn't operating, it will look something like depression here," La Croix said.

On the first day of the relaxed travel rules, the number arriving airline passengers more than tripled compared with recent weeks but still represented a fraction of the pre-pandemic level.

Major players in Hawaii's visitor industry hope the relaxed quarantine will help relaunch tourism but are preparing for a slow recovery.

Hawaiian Airlines recently announced layoffs for 30% of its staff. Ahead of the changes, Avi Mannis, the airline's senior vice president of marketing, predicted that the relaxed rules will entice some travelers to fly but many are expected to stay grounded well into 2021.

"How quickly we can put people back to work is going to depend on the success of public health interventions, and testing, and screening that the state is putting in place," Mannis said.

The importance of public health measures has been reiterated by local hoteliers, for whom the lucrative end-of-year holiday season is normally a critical period.

Currently, only around half of the hotels have reopened, according to the Hawaii Lodging and Tourism Association. The group's president, Mufi Hannemann, said it is not yet clear if people will be willing to travel.

"I think October, and how we handle October into November, will be critical in determining what kind of holiday season we have here," he said, adding that a new spike in cases would likely depress travel again.

A winter surge of COVID-19 would be devastating — not just for hotels and other businesses but for the 80,000 Hawaii workers currently out of a job.

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