The daily number of trans-Pacific arrivals rose as Hawaii launched a pre-arrival testing program to welcome travelers again. Now, a week after tourism reopened in the state, visitor arrivals have already started to calm down.
The number of visitors going on vacation or visiting friends was 463 as of October 14, the day before Hawaii began its pre-arrival testing program that gave travelers the option to bypass a 14-day visitor quarantine. That number peaked at 5,124 on Saturday but had fallen more than 48% to 2,637 by Tuesday.
Leading Hawaiian visitor industry leaders recognize the pent-up demand for the better-than-expected traveler numbers achieved for the pre-arrival program launch. Now, it is said, visitor arrivals are getting closer to the 2,000 to 4,000 a day that the industry was expecting, or even lower.
“The first few days were robust, but they have receded,” said Jack Richards, president and CEO of Pleasant Holidays, a Hawaii wholesale travel seller. “I would describe the reopening as choppy.”
The University of Hawaii’s economic research organization has announced that it will not expect a significant economic recovery until the middle of next year, followed by a weakened recovery period.
“Long-term recovery expectations are so far off,” said Keith Vieira, principal of KV & Associates, Hospitality Consulting. “Most hotels in Hawaii that have reopened are only 15% to 20% occupied without reopening all of their hotel offerings. Performance is still poor with a hotel occupancy of 50%, and that’s the best most Hawaii hoteliers can hope for right now. “
It is a sign of the times that, despite the reopening of Hawaiian tourism, The Street Food Hall – celebrity chef Michael Mina’s casual dining concept on International Market Place – announced on Wednesday that it will close on November 8th.
The street – its full name is Michael Mina’s The Street Food Hall – opened in 2017 on an area of 12,561 square meters on the ground floor of the Marktplatz. It houses 11 food stations that offer an international selection of cuisines. The road currently employs around 115 people, according to a notice submitted to the state at the end of September on the adjustment and retraining of workers.
Scott Suemoto, Mina Group’s director of sales and marketing, said the food hall was built around eating together, a model that is unsustainable under social distancing restrictions.
The Street offers a consolidated takeaway menu with bestsellers from the various stations, as well as items from Minas Stripsteak Waikiki, which is at the top of the market. The street could be opened for seated duty between the two closings of the dining room, Suemoto said.
But the second shutdown put the food hall in a critical position, he said. “It kind of made it impossible to recover from the months and months and months of lost revenue.”
Mina also owns Mina’s Fish House at the Four Seasons Resort Oahu on Ko Olina. Suemoto said the company hopes to reopen Stripsteak and Fish House soon.
Real estate analyst Stephany Sofos said many Hawaiian companies are “just sticking to it” and for some it is too late to reopen tourism.
“At the time of The Street closing, I’m sure they tried to get it working and just couldn’t get it,” Sofos said. “Waikiki was built to hold over 10 million visitors, and it will be years before we get close to that number again. It is very sad, but I am sure that many more companies will have problems – and some of them will have to give up. “
To be sure, Hilton Hawaiian Village, Hawaii’s largest hotel hotel, filed an amended WARN notice with the state on October 15, the same day as Hawaii’s pre-arrival test program. Julie Walker, the executive director of human services at Hilton, said in the announcement that the company will potentially extend vacation days for 1,880 employees over the past six months, and will lay off 55 employees for good as of December 13.
Walker says lockdown orders have severely disrupted travel and commerce.
“For example, the state recently announced that out of state travelers to Hawaii must take a COVID-19 test with negative results within 72 hours of their trip to Hawaii,” Walker said on the WARN statement. “If travelers do not meet the test requirements, they must be quarantined for 14 days. Contrary to our expectations, government orders continue to place significant limits on our business operations at this location (e.g., social distancing guidelines, limits on large public gatherings, and capacity restrictions). “
Ben Rafter, president and CEO of Springboard Hospitality, which has 35 hotels in Hawaii and eight other states, said he doesn’t expect the Hawaii hotel industry to pick up again until late December or early January at the earliest.
“Right now Hawaii has the worst hotel markets in the United States,” said Rafter. “Hotels in reopened drive markets like Napa, California; Park City, Utah; and Jackson Hole, Wyo., is fine. Hotels in the urban markets are about 30% occupied. Once Hawaii reopens, we’ll likely be behind the Drive markets but ahead of the urban markets. “
In September, Oahu had a hotel occupancy rate of 21.3%, the lowest of the country’s 25 largest hotel markets and the only one with an occupancy rate of less than 30%. The top performing hotels on the list were Norfolk / Virginia Beach with 56.8% occupancy and San Diego with 54%, Los Angeles with 53.8%, Atlanta with 49.2% and Detroit with 49.1%.
Betty Shimabukuro, editor of Honolulu Star Advertiser Crave, contributed to this story.