KAILUA-KONA – Alley Geckos, with inventory as unique as its name, is closing.
So, too, is Kona Jewelers, which sits across the street. A simple sign hangs in the window of that store front: “Sorry, closed. (Will not reopen.) All the best.”
A little bit south of the jeweler is the clothing shop, Pacific Nature, which is also in its final days.
Its owner, Peter Dungate, is shuttering that retail space so he can devote his resources to another one of his businesses nearby, The Treasury. He’ll try and keep The Treasury open as long as he can. Which, he estimates, will be a couple more months.
“I’ve been through a lot, but not like this,” Dungate said, standing outside Pacific Nature in the Kona Inn Shopping Village. “This will change retail.”
The outdoor, oceanfront mall in downtown Kona used to be thronged with tourists. But nobody passed by the day last week Dungate spoke outside his shop.
“Retail is always changing anyway, but this is really changing retail more than I could ever imagine would happen,” he said.
Dungate, in his words, knows he’s luckier than most, however. After a 40-year career, he’s saved and planned enough that he’s using the COVID-19 pandemic as an opportunity to retire from retail and focus on other affairs.
“For me, it’s not a sad decision,” he said. “For other members of my family it is, because that’s all they know, so it’s harder on them.”
Still, it’s difficult to paint a rosy picture for any of his fellow business owners. The shutdown has taken a toll. While more Big Island businesses were allowed to reopen this week as part of the state’s phased reopening plan, a look around empty Kona Village shows that plenty of them won’t.
That’s because the pandemic has proven too difficult to bear, some Kona business owners said. Unlike a recession, tsunami, or other disruptive events they’ve weathered before, they can’t count on a return to normal.
There’s simply no light at the end of the tunnel, they said.
“This is too much of a blow,” said Rudo Van Lelyveld, owner of Alley Geckos, the novelty tourist shop that’s closing its doors after 33 years of business at the Kona Inn Shopping Village, a few feet from Dungate’s stores.
Like their neighbor, Lelyveld and his partner Darlene Blair used the pandemic as a springboard to retirement, something they had been contemplating for the last two years. The shutdown signaled it was time to go, they said, because they suspected business would never be the same, even after some locales were allowed to reopen several weeks ago.
“We realized we could reopen but nobody was going to be here,” Blair said. “Really, no tourists coming, it made an effect on our decision to say, ‘That’s it.’”
They called it a bittersweet decision, but a necessary one because there’s no telling what downtown Kona will look like in two months, six months, or even two years.
“I don’t know what’s going to happen to the island, personally,” Blair said. “My heart goes out to the folks having to hang on and wait and see. The wait and see would make me very crazy.”
A recent report by the Department of Business, Economic Development and Tourism outlined Blair’s very concern – Hawaii’s economy could be in for a slow recovery.
The second-quarter 2020 Statistical and Economic Report, issued May 22, projects the state’s economic growth to fall by 12.1% in 2020 due to the pandemic.
Using economic indicators such as job count, income and unemployment levels as well as the GDP, it projects Hawaii’s economy to increase at 0.7% in 2021, 0.6% in 2022 and 1.1% in 2023.
The report doesn’t estimate what percent of businesses will close as a result of the pandemic, an official at the DBEDT office said, but its numbers illustrate the unfavorable economic climate businesses are enduring.
Hawaii’s non-seasonal unemployment rate jumped in April 2020 to 23.5% — the third highest in the nation after Nevada and Michigan.
Around 121,000 non-agriculture payroll jobs were lost as compared to the same time last year. Of those, accommodations jobs took the biggest hit at 64,000, followed by food services and drinking places at 41,000, and retail trade at 9,700. Overall, the hospitality sector lost 70,000 payroll jobs.
Hawaii’s economic backbone – tourism — will fall by 67.5% this year to 3.4 million visitors, the report said. Visitor arrivals – which account for around 95% of Dungate’s retail business, he estimated — should gradually increase over the coming years but will not reach the 2019 level until 2025.
All in all, it’s a “bleak” report, Dennis Boyd, director for the Small Business Development Center in Kailua-Kona, said.
His office has been flooded the last two months helping businesses navigate the application process for the Paycheck Protection Program.
Now, however, it’s unclear from the government whether the forgivable loans were based on full-time equivalent positions or head counts, which can represent a big difference in the business world.
It’s another layer of confusion during an already uncertain time for these operators, Boyd said, and a common statement he hears from them is, “I just don’t know what I’m going to do.”
His SBDC office also couldn’t estimate what percent of stores would or wouldn’t make it, but one way or another, the COVID-19 shutdown will prove to be “a gamechanger.”
“This is cold water in the face,” Boyd said. “We can’t rely on tourism as much as we have been.”
It will be interesting, he said, to see how many of the businesses that do survive adapt and won’t need to operate in a store. After things return to normal, will storefronts remain empty because businesses learned to survive without them, without paying rent?
Along that front, Boyd projected – as did other storeowners in downtown Kona – a desolate, empty summer for the Big Island, regardless how soon the state fully reopens.
“I don’t see how we have a summer season,” Boyd said.
“A ghost town,” Blair predicted.
Already, as Kona emerges from the shutdown, its business landscape looks different.
About a mile south of the Kona Inn Shopping Village, Bongo Ben’s now sits vacant. The oceanfront restaurant was a landmark, where the line of early morning diners waiting for a table was a ubiquitous sight on Alii Drive.
But it closed at the end of May after a disagreement with its landlord over renovations and a lease agreement, a situation made more untenable by the mandated requirements and restrictions during the shutdown, owner Beth Martinez told the community in a Facebook post about the decision.
“Aloha friends,” she wrote, thanking everyone for the help and support during their seven years of business. “It’s been a pleasure serving you, and we will miss that privilege.”
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