LIHUE, Kauai—Well over a third of Kauai businesses may fail within the next six months if there is no recovery in the visitor industry, but nearly 70% of business owners and managers support government interventions to try to contain the COVID-19 pandemic, anyway.

In fact, 37.5% of Kauai businesses agree that “more rigorous enforcement interventions would allow for more business to safely reopen,” especially actions to crack down on people who don’t wear masks and unsafe large gatherings.

Those are key results of a new survey by the Kauai Chamber of Commerce. A total of 129 businesses of the chamber membership of 409 responded. The response rate is higher than many similar online surveys.

Just over half of Kauai businesses believe Hawaii should not reopen to tourism until daily case numbers have stabilized at a level acceptable to the state Department of Health. Nearly 15% of business owners and managers said Hawaii should not reopen to tourism on Sept. 1 if the case count then is as high as it is now.

And nearly 11% said reopening to tourism should be delayed until there is a vaccine or standard treatment for COVID-19, even though business failures could multiply exponentially if vaccines and more effective treatments are not introduced soon.

The finding that 36.5% of businesses could fail if tourism does not recover within six months was apparently higher than a recent report by the University of Hawaii Economic Research Organization (UHERO), which reported that 6% to 17% of businesses believed they would not survive the pandemic crisis.

Of Kauai businesses, only 46% said they can survive for more than six months.

Passengers board a North Shore shuttle at Kee Beach earlier this year. The loss of tourism is having a big impact on Kauai’s economy. Allan Parachini/Civil Beat

“With almost 40% of businesses indicating they will close within six months, this survey is also a warning sign to government and community leaders,” said Mark Perriello, CEO of the Kauai chamber.  “It really is a dire statement,” Perriello said in an interview Friday. When chamber officials tallied the survey results, he said, “people were surprised. So was I.

“I thought the membership would be more evenly split. People are nervous about the future of our island.”

Perriello noted that the new Kauai survey was already in the field when Honolulu Mayor Kirk Caldwell issued the most recent lockdown order for Oahu, so it wasn’t clear how — if at all — that announcement would have influenced business owners on Kauai.

He said the results may be interpreted in some quarters as at odds with the traditional pro-business positions of national, state and local chambers of commerce. But, he said the Kauai chamber “is more than just about the businesses, it’s about the community.”

The statewide Hawaii Chamber of Commerce immediately took note of the Kauai results. “Losing 40% of Kauai businesses would be devastating not only for business owners and the economy — but also for Kauai residents who depend on the jobs, goods and services these businesses provide,” said Sherry Menor-McNamara, CEO of the organization.

“Businesses should not be put in a Catch-22 position where they are the ones choosing between public health and their own survival. The state government needs to create programs that can provide stabilization funding to sustain the business community across the state until it is safe to reopen.”

Businesses Across The Island Are Hurting

A wide range of businesses responded to the survey. Nearly 60% reported having one to 10 employees, while 24 said they have more than 50. Unsurprisingly, 38.6% are headquartered in the central part of the island in and around Lihue. Nearly 30% are in the Koloa/Poipu-Kalaheo area on the tourist-intensive South Shore. Just under 20% are on the North Shore or east side and 11% are on the west side.

Nearly 70.5% of business owners and managers said they agreed with the statement that the 14-day quarantine “is necessary to safeguard the health and safety of Kauai residents regardless of its impact on local businesses” while 47.2% agreed that “social distancing and mask requirements are more important than my business concerns.” Another 42.7% agreed with the statement: “Social distancing and mask requirements have not impacted my business.”

A total of 29.7% of businesses reported that COVID had no effect on their operations, while 48.4% said they had cut hours and staffing and 21.8% had closed temporarily. No respondents reported they had actually gone out of business because of COVID.

A majority of business owners surveyed by the Kauai Chamber of Commerce support government interventions to try to contain the COVID-19 pandemic. 

The largest proportion of responses — a combined total of 36.2% — came from businesses in the tourism, hotel and food service and retail sectors. Real estate-related businesses accounted for 8.6% of responses while agriculture accounted for 6.3% and nonprofits, 7%.

One of the respondents was the Kauai Island Utility Cooperative, Kauai’s publicly owned electric company. Spokeswoman Beth Tokioka, who is also a member of the Kauai Chamber of Commerce board, said she was shocked at the survey results.

“The results of this survey blew me away. On the one hand, Kauai is a tight-knit community that pulls together during crises. That’s just who we are,” Tokioka said. “Yet, so many businesses are hanging on by a thread, worried for their employees and not sure they’ll survive.”

That businesses are still prioritizing health and safety above their own business, Tokioka said, “speaks to how urgently we need to address the barriers that remain to getting our people back to work safely.”

Hawaii’s Changing Economy” series is supported by a grant from the Hawaii Community Foundation as part of its CHANGE Framework project.

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