Javier Cantellops, owner and president of Kihei-based Maui Dreams Dive Co. and Island Style Diving, said in the days since the deadly Lahaina wildfire, business on Maui has dropped so much that he already has had to furlough or lay off 40% of his staff.
“I lost $25,000 to cancellations
in the first three days. Everyone canceled for this week and next week, and the week after that and for September and October,” Cantellops said. “People book three months or so in advance so if they are canceling for October, it be would be January or February before you saw anything that could make up for it. If it continues for two more weeks, there are people who are not going to be about to recoup.”
Cantellops and his employees are not alone. Since the wildfires, Maui is experiencing a sharp rise in initial unemployment claims, which hit 6,663 from Aug. 9-17,
according to state Department of Labor and Industrial Relations spokesperson William Kunstman.
Kunstman said DLIR “cannot determine how many are disaster related at this time,” although since May initial claims had averaged 700 or 800 weekly. It’s the highest level of claims on Maui, the state’s most tourism-dependent island, since the tourism shutdown in the earliest part of the COVID-19 pandemic.
The loss of human lives — more than 100 thus far — drove the initial message from some officials, residents, social media influencers and celebrities strongly discouraging nonessential travel to all of Maui. People needed time to mourn, and space to mount a response to the mass casualties and devastation.
Now, however, as economic woes build, Gov. Josh Green, the Hawaii Tourism Authority and many Hawaii residents urge visitors to avoid only West Maui.
There’s a push to drive the message that visitors are welcome to come to other parts of the Valley Isle, like Kahului, Wailuku, Kihei, Wailea, Makena, Paia and Hana. And certainly, continued tourism is encouraged on Kauai, Oahu, Lanai, Molokai and Hawaii island.
Mufi Hannemann, president and CEO of the Hawaii Lodging &Tourism Association, said tourism arrivals
to Maui dropped 80% the week that the Lahaina wildfire started, and recovering occupancy and keeping other businesses afloat remains challenging.
“Yes, we must be sensitive to the plight of those suffering from the wildfires. But bear in mind that so many
of the victims and their families depend on the visitor
industry for their jobs and futures,” Hannemann said
in a statement. “While they may have lost their homes and more, losing their incomes would only add to the pain and hardship of their situation. That’s why it’s important to keep tourism functioning to keep our economy alive and give our people hope and the ability to rebuild their lives.”
Economic softening has spread to still-open Maui destinations, and the losses are having a negative impact on the overall state economy, said state Rep. Sean Quinlan (D, Waialua-
Kahuku-Waiahole), who chairs the House Committee on Tourism.
“General fund collections are dropping already. This is going to have a huge impact not just on the county of Maui but on the entire state,” Quinlan said. “We are in a state budget crisis. Right now people don’t realize it, but we are having to cut state government everywhere. We don’t know how we are going to pay for all this stuff.”
Jack Richards, president and CEO of Pleasant Holidays, said the company canceled $3.5 million in Maui business in the first 10 days after the fire. They also had to close four out of five concierge desks, and as of Friday had refunded $260,000 in prebooked activities.
“Travel to Maui has dried up. We aren’t taking a lot of bookings for Maui no matter what the time frame in 2023 or even 2024,” Richards said.
He said about 50% of travel cancellations for Maui are rebooking to other islands in Hawaii, but that doesn’t completely offset the losses statewide, and it doesn’t help Maui.
Cancellations in Wailea, Maui’s most exclusive destination where the average daily hotel room rate was $623 in June, have reached 95% for August, according to Quinlan, who said he heard that figure during a Maui economic update meeting.
“If we don’t do something soon or the situation doesn’t change, we will lose the vast majority of the small businesses on Maui,” he said.
Ryan Tanaka, chairperson of the Hawaii Restaurant
Association, said about 102 restaurants were destroyed by the wildfires on Maui, and others across the county are feeling softening.
“Many of our restaurants will ebb and flow with the
resort industry,” he said. “There’s no question that many still had not recovered from COVID.”
Tanaka said aside from
rebuilding, a looming challenge for employers is that the unemployment tax schedule already is high, and additional layoffs, furloughs and reduced hours could trigger another increase in the schedule, which would be felt by
Paying an avalanche of unemployment claims triggered by job losses largely in 2020 amid COVID-19 restrictions caused the Unemployment Compensation Trust Fund’s balance to fall far below a $600 million threshold, triggering hikes to the tax schedule this year that for some employers was as much as $2,000 per employee.
Tina Yamaki, president
of the Retail Merchants of Hawaii, said 176 retail stores burned down and 1,372
retail employees were affected by the Maui wildfires,
which is expected to cause
$312 million in lost sales.
Yamaki said employers are mostly focused on taking care of their workers, but there’s a growing concern that only businesses that were directly impacted by the fire will get the resources that they need.
There was a time when Maui’s economic tourism crisis would have prompted tourism officials and government and business leaders throughout the state to launch aggressive campaigns to recover tourism. That was the playbook after 9/11 and during economic downturns in 2002 and 2009.
But large-scale marketing became difficult after 2019 when visitor arrivals statewide topped 10 million, prompting pushback from residents who felt that tourism produced more problems than benefits. The anti-tourism sentiment among residents grew during COVID-19 and is now reaching a crescendo.
Texas-based tourism safety expert Peter Tarlow, who has consulted in Hawaii, said, “Hawaii has had a love-hate relationship with tourism perhaps since 1893 and the U.S. overthrow of the Hawaiian monarchy. This historic reality still colors the views of many Hawaiians. In most cases, when a natural disaster hits, the local population dependent on tourism does everything in its power to get visitors to return.”
Due to these complexities, Tarlow said grassroots organizations that are Hawaiian owned and operated are the best advocates for Hawaii tourism. He said he is working with the World Tourism Network, which is based in Hawaii and represents small- and medium-size entrepreneurial establishments, to advocate that Hawaii protect its “mom and pop” shops and business establishments.
“Hawaii will have a lot of soul searching after the ‘smoke’ clears,” Tarlow said. “As we learn more and more about bureaucratic errors it is important not just to play the blame game, but to admit past mistakes, learn from them, and make the changes needed so that the local population feels that it is part of the tourism industry rather than a driven leaf blown around
by the economic currents.
“It is for this reason that the World Tourism Network is trying to help all Hawaiians to transform their very real pain and anger into
actions that will permit a
rebuilding not only of the physical but also of the Hawaiian soul. Tourism has to be not something that is antithetical to Hawaii culture but part of it.”
James Kunane Tokioka, state Department of Business, Economic Development and Tourism director, said HTA has asked Green
to declare a tourism emergency, which will allow HTA to access up to $5 million in emergency funding if necessary. He said further details about HTA’s emergency response will be available at its board meeting this week.
“We are certainly sensitive of the fact that many people in the industry have families or loved ones who they lost so it’s not all about marketing. But at some point we need to make sure that we have a plan in place to figure out how we market the state,” Tokioka said. “Regardless of what we do, tourism is the No. 1 engine. If you ask many of the people who were in the visitor industry they are going to say, ‘It’s not soon enough.’ If you ask people who lost loved ones that are not in the visitor industry, they are going to say, ‘We need some time to grieve.’”
Tokioka said HTA’s leadership team left for Maui on Friday to get updates on needs from hotel operators, concessions and people who had grants with HTA. The Council for Native Hawaiian Advancement, which holds HTA’s destination stewardship contract, was part of the initial emergency response at the Hawai‘i Convention Center shelter, and now will provide future planning assistance by using methods similar to HTA’s Destination Management
Action Plan process.
Businesses like Hawaiian Airlines say they are following HTA’s lead. Hawaiian Airlines spokesperson Alex Da Silva said, “We are updating our popular Travel Pono content to try to address the question on the minds of many visitors who care deeply about Maui — ‘Can I visit Maui in a way that is positive and respectful?’”
The spread of economic woes across Maui as the
impact of the wildfires extends beyond two weeks has caused greater tolerance for efforts to recover Maui tourism outside of West Maui. However, the jury is out on when West Maui, an important tourism region for Maui, can reopen to visitors.
Kai Nishiki, a community organizer with Maui Nui Resiliency Hui, said she is not opposed to South and Central Maui and places outside of West Maui that were not affected by the wildfires staying open as long as its in a sensitive way and that priority is given to displaced residents and emergency workers if necessary.
Nishiki said there is pressure to reopen West Maui where a lot of businesses derive much of their income from tourism. But she wants to prevent West Maui from reopening to visitors too soon, and without input from the grieving community.
“I think it’s very important that this decision not be made by the governor or the tourism industry. This needs to be a community-led discussion and a community-led decision,” Nishiki said.
She said government officials should focus on community needs, and tourism officials like HTA must manage tourism, especially in West Maui.
Nishiki recommends hiring more cultural practitioners to help educate visitors about pono travel. She also said that if tourism workers are losing their jobs, perhaps some tourism money can go toward retraining them.
“This is an opportunity to take that workforce servicing tourists and retrain them into jobs that serve our community,” she said.