The September 11th attack
Visitor industry braces for post-attack downturn
By Frank Cho
Advertiser Staff Writer
The economic impact from Tuesday's terrorist attacks is only just beginning to be felt throughout Hawai'i's visitor industry as thousands of stranded travelers leave their hotels to head home but fewer new tourists arrive to take their place.
Retailers, restaurants and hotels say they are preparing to hunker down for the expected downturn. Some say they are cutting staffing levels in response, others are planning marketing campaigns to keep their businesses afloat through the traditionally slow post-Labor Day travel season.
The submarines of Atlantis Adventures Hawai'i, a popular visitor attraction, will be tied to the pier this weekend as many hotels sit largely empty. Waikiki restaurants won't be packed as usual; some are cutting back on staff. Numerous business meetings and social gatherings in and around Waikiki have already been called off.
Still, despite the lull, those in the visitor industry say it's just too early to tell how deep, or how long, the slowdown will last.
"It's coming, there is no question about it," Bob Taylor, president and chief executive officer of Maui Divers of Hawai'i, said referring to an expected economic and visitor slowdown in the state.
Taylor said his company would normally have 700 to 800 visitors a day, but that has fallen to about 300 in just a few days. In response, Taylor said Maui Divers is planning to reduce work hours for most of its sales staff. The company employs about 700 workers statewide.
"It's really bad," said Erick Converse, manager of the Round Table Pizza in the Hilton Hawaiian Village.
Converse said business is off by 50 percent from Monday, with sales falling from around $5,000 a day before Tuesday to less than $3,000.
"The Hilton said its occupancy was at 90 percent last week and now they are like 50 percent and they told us that this will probably last until next week," Converse said.
Like many other managers trying to deal with the downturn, Converse said he has reduced his daily crew from as many as 15 to just five or six workers. He also has not scheduled 10 of his 35 employees for work next week in anticipation of the continued sluggish visitor arrivals.
Outrigger and Ohana Hotels and Resorts, Hawai'i's biggest hotel chain with 30 properties statewide, said nearly 2,000 rooms were emptied yesterday. Another 2,000 rooms are expected to be emptied today, but the number of visitors scheduled to arrive is barely half that.
"It is something we are watching very closely," said Jim Austin, a spokesman for Outrigger and Ohana hotels.
Austin said Outrigger and Ohana properties were expecting 4,264 arrivals between yesterday and Monday. But over that same period, Austin said, the hotel expected guests to check out of 6,494 rooms.
"The part that remains the variable is the people who have not booked with us yet. The question is will they book, and when will they book," Austin said.
At the Hawai'i Prince Hotel Waikiki, management said visitors continued to check out at a steady pace.
"With no arrivals from Japan, we have been pretty slow here," said John Foley, the hotel's director of rooms.
Boutique hotel operator Marc Resorts said phone call volume to its reservation lines is down 60 percent, and most of those are canceling or pushing back reservations.
"We have received new bookings in the last 24 hours, most of which are for November and December 2002," said Kathryn Acorda, a spokeswoman for Marc Resorts.
Business leaders said some of the lull was expected because of problems with air travel and the jittery mood of consumers. Now that it appears to be here, they say they hope the downturn will be short.
But if travelers and consumers hunker down for a longer stretch, it could have serious implications for the state's already struggling economy.
"What we are doing, like any good business would do, is come up with contingency plan," said Paul deVille, chief executive officer for Pomare Ltd., parent company of Hilo Hattie.
Business has slowed at Hilo Hattie's, deVille said, but he said it is too early to tell by how much, or how long it could last. He said the first flights from Japan arrived empty to take stranded Japanese travelers home, but later flights are expected to bring tourists to Hawai'i.
"Typically we would be cutting back some already because September is the beginning of the slow (retail) season," deVille said.
There were pockets of optimism.
Japan Airlines and All Nippon Airways both said they plan to begin regularly scheduled service to Hawai'i and other destinations starting today. And Outrigger said it has seen few requests to cancel reservations at its properties.
But some say they are concerned that even if people come, they may not spend as much.
"We just don't have a very clear sense," said Dwight Yoshimura, Ala Moana Center general manger. Yoshimura said that despite a lot of foot traffic at Ala Moana yesterday, retailers there reported slow sales.
Yoshimura said some marketing projects are "in the pipeline" to drum up sales. "But we might have to tinker with them (promotions) once we know more."
At the Outrigger and Ohana hotels, Austin said the company is looking at discounting room rates and starting other promotions to attract visitors. It may also adjust its work force if the lull lasts longer than expected.
"How long is this going to last? When we are sure, that's when we will start adjusting," Austin said.
