Maui job losses mount, but anti-tourism could block recovery
Tuesday, August 22, 2023 | By Allison Schaefers
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 employers statewide.
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