When Hawaii finally opens for tourism, it’s likely to take years to build the visitor base to anything close to what it was before the COVID-19 crisis shut down the state’s travel industry, experts in that business say.
In the meantime, businesses that rely on a mix of residents and tourists are likely to begin failing in the fall, as federal stimulus money that has been propping up the local economy – and Hawaii families and businesses – goes away.
“It’s going to be a long, slow road back when we do start accepting visitors,” said Peter Ingram, chief executive of Hawaiian Airlines, which is the state’s dominant carrier and largest private employer with more than 7,000 workers.
Ingram and others spoke Monday during an informational briefing of a state House committee that is working to respond to the crisis.
Data from the Hawaii Department of Business, Economic Development and Tourism estimated it will be 2023 before visitors to Hawaii top 9 million, which compares to about 10.4 million visitors at a peak in 2019.
After July 31, most people now collecting unemployment insurance payments will lose an extra $600 per week that the federal government has been providing under an economic relief law known as the CARES Act. When that happens, people will have to spend an even greater percentage of their income on necessities like rent, and that will mean less money to circulate through the economy to businesses like restaurants, said Carl Bonham, executive director of the University of Hawaii Economic Research Organization.
“We’re going to see an increasing wave of announcements that your favorite restaurant is closed and it’s not reopening,” Bonham said, during the meeting of the House Select Committee on COVID-19 Economic and Financial Preparedness.
Bankruptcies also are in the offing.
“I’m sure that’s coming in the weeks and months ahead,” Bonham said.
As of April, before some federal programs to put people back on payrolls had kicked in, as many as 220,000 people in Hawaii lost their jobs out of a statewide private workforce of some 650,000.
The overarching question is when Gov. David Ige will lift a 14-day quarantine requirement for air passengers arriving in Hawaii. Although tourists can still come, they’re required by law to stay inside for two weeks, and that caused daily arrivals to drop from about 30,000 to about 1,000, with just several hundred leisure travelers.
Ige has extended the order through July 31; however, a group of public officials and business executives is working to craft a plan that would allow visitors to get tested for COVID-19 at their home destinations and sidestep the quarantine if they test negative.
Dr. Mark Mugiishi, chief executive of the HMSA, the state’s largest private health insurer, said the group will be meeting on Monday afternoon to discuss the testing plan.
A critical issue, Mugiishi said, is that people are supposed to be tested for COVID-19 only if they have symptoms or meet other criteria that leads a doctor to recommend the test. Hawaii thus will likely need to find a partner that could conduct the tests under a sort of business-to-business relationship.
Lt. Gov. Josh Green said last week that the state is working out such a deal with CVS Pharmacy.
Ige told reporters at a press conference Monday that his administration is working on a plan for testing airline passengers but that it is complicated and needs to be coordinated with the state, the counties and the airlines.
“We can’t have those subject to quarantine intermingling with those who are not, and being able to identify which travelers would be subject to which requirements will become increasingly complex,” said Ige. “We’ll announce a date when we are ready to.”
Civil Beat Reporter Eleni Gill contributed to this report.
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