The return is hardly an illusion: data shows there were substantially more tourists in Hawaii in March of this year than the same month in 2020, when Hawaii tourism was just starting to feel the effects of COVID-19.
Still, there’s one thing missing: tourism jobs. Hotels and restaurants have brought workers back to be sure, but not nearly in proportion to the numbers of visitors. While numbers show March of 2021 was better than March of 2020 in numbers of visitors, March 2021 was significantly worse in terms of hotel and restaurant jobs – by almost 40,000.
Hawaii hotels and restaurants employed approximately 73,000 workers in March 2021 compared with 112,000 in March 2020. And that’s despite 8% more visitors per day in March 2021, according to the Hawaii Tourism Authority’s visitor census for March.
The reason for this is simple, says Carl Bonham, executive director of the University of Hawaii Economic Research Organization. Even though tourists are coming back, there still simply are not enough to fill all the hotels.
“We know businesses are not going to rush to restore full staff when hotels are operating at 43% occupancy,” Bonham said, citing the recent statewide occupancy rate. “If you just look at March, they probably had more people than they needed.”
The problem is that Waikiki, which remains the state’s tourism bellwether, depends a lot on international travelers and nobody knows when they are coming back.
“If we had higher occupancy, we’d have a lot more people working now,” said Jeff Wagoner, president and chief executive of Outrigger Hospitality Group, who spoke last week at a press conference organized by the American Hotel and Lodging Association.
The problem with major markets like Japan is that travelers returning from the U.S. must quarantine for two weeks when they get home. That makes a week-long trip to Hawaii impractical if not impossible for Asian visitors with limited vacation time.
It’s not just the drop in numbers of travelers that’s a problem, said Glenn Vergara, vice president and general manager of the Waikiki Resort Hotel, which is owned by Korean Air Lines. Things wouldn’t be the same even if the hotel was able to make up for lost business with U.S. visitors, who tend to be more budget conscious, Vergara said.
“Historically, the international traveler has been the one that’s been willing to open their wallets,” he said.
Without them, he said, there’s simply less demand for services. For example, he said, the hotel has a Korean restaurant, but there’s no demand to open it without visitors from Japan and Korea. And that means fewer jobs.
Around midday on Thursday, the hotel lobby was mostly quiet, save for a trickle of guests checking in at the front desk, asking questions or leaving bags with the bellman at a station in the corner. Two desk workers and one bellman seemed like enough for that time, but appearances can be deceiving, said Jungmin “Coco” Kim, one of the desk clerks on duty.
Kim, who is working with the hotel workers union Unite HERE Local 5 to try to get more workers back at the hotel, said it can be overwhelming when more than a few tourists arrive to check in at the same time.
Often there’s just one clerk on duty, she said, and sometimes not even one bellman. That means desk clerks sometimes have to deal with luggage.
Plus, it takes longer than normal these days to check people in. Clerks have to examine the guests’ records to make sure the guest had a recent COVID-19 test needed to avoid the state’s 10-day quarantine, she said, and there are additional safety precautions and policies to discuss.
“Guests start to get frustrated,” she said. “They’re already tired from the airport.”
Vergara agreed there’s more work to do checking people in, but he said the hotel simply can’t bring on much more staff when occupancy is only at 40% to 50%, the restaurant is closed and group and banquet business is non-existent.
“We’d love to bring our employees back,” he said. “But as much as I want to bring them back, we can’t bring them back for them to just stand around.”
The situation could stay this way for a while. The hotel and lodging association, for example, expects Hawaii’s hotel jobs to remain roughly where they are now – down to approximately 24,300 jobs for the year compared with approximately 44,300 for the year in 2019.
Even before COVID-19, hotel managers were scaling back the number of workers in certain positions as a result of tools like apps that let hotel guests check themselves into rooms instead of waiting in line. That trend is likely to accelerate in 2021.
A recent Washington Post article discussing this trend cited a conference call in which Chris Nassetta, the chief executive of Hilton Hotels, shared his plan to reduce labor costs at the chain’s 6,400 hotels.
“The work we’re doing right now in every one of our brands is about making them higher-margin businesses and creating more labor efficiencies,” he told investors in February. “When we get out of the crisis, those businesses will be higher-margin and require less labor than they did pre-covid.”
Meanwhile, restaurant workers face a similar challenge as a result of COVID-19 and consumer trends.
COVID-19 protocols have significantly hurt restaurants. After enduring complete shut-downs and orders allowing take-out only, restaurants still face capacity constraints as a result of government orders and social distancing protocols. The result is fewer seats and thus fewer customers – which means less need for staff, said Vergara, the general manager of the Waikiki Resort Hotel.
One bit of good news is that it seems unlikely any hotel positions will completely go away any time soon. Even occupations that require contacts with multiple people and objects in short periods of time, like valet parking attendants, can be done safely, said Louis Tripoli, a retired Navy rear admiral who now works as a consultant for the hotel and lodging association.
“Some jobs will require a little more modification than others depending on the risk exposure,” he said.
Bonham, the UHERO economist, agreed he does not see COVID-19 causing some jobs to go the way of buggy whip makers and elevator operators.
“I’m not a big fan of the idea that some sectors of the economy are gone forever,” he said.
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