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The Honolulu Advertiser
Posted on: Thursday, September 20, 2001

The September 11th attack
Visitor industry laying off staff

By Johnny Brannon
Advertiser Staff Writer

Unemployment claims are skyrocketing as Hawai'i's economy reels from the impact of last week's terrorist attacks on the World Trade Center and Pentagon.

Waikiki restaurant chef Rizaldy Alconcel fills out forms at the state unemployment office after having his hours cut back at one job and being laid off at another. This is the first time he has filed for unemployment benefits.

Richard Ambo • The Honolulu Advertiser

About 1,200 workers filed unemployment claims statewide Monday and Tuesday — nearly as many as filed claims during the entire week before the attack, according to the state Department of Labor and Industrial Relations.

"I've never seen it this busy in the nine years I've worked here," said labor department spokesman Tom Jackson.

Many hotels and other businesses connected to the state's massive visitor industry have been hit especially hard as a dramatic drop in travelers brought Island tourism to a virtual standstill.

Yesterday, Aloha Airlines became the first local company to announce major layoffs when it joined the ranks of national carriers announcing cutbacks and said it will let go roughly 250 workers, with some of the cuts effective immediately. Hawaiian Airlines also expects to announce schedule and employee cutbacks.

Most of the state's major hotels and retailers said they had not had any large-scale layoffs, but most of the people applying for benefits this week have been from tourism businesses that have scaled back by cutting a few workers and reducing employee work hours.

Many workers streaming into the unemployment office in Honolulu hadn't worked for days and had no idea when they would be called back. Such workers are eligible for partial benefits based on the number of work hours they miss, regardless of whether they are still considered employed.

Several large hotels that cut back on workers' hours have arranged for unemployment officials to process large numbers of claims on-site, Jackson said. Unemployed workers who qualify can receive a maximum of $383 per week for up to six months, but federal labor officials could extend the time limit if necessary.

State economist Pearl Imada Iboshi said there is no immediate way to quantify the Sept. 11 terrorist attacks' impact on the state's economy. But officials fear that the unemployment lines will steadily grow if the downturn lasts much longer and the threat of large-scale layoffs grows. Hotels continue to report low occupancy and businesses statewide — from restaurants to skydiver schools — continue to suffer.

Matthew Ching, who works for a company that produces weddings for visitors from Japan, hasn't worked since Saturday.

"I'm the only one supporting my family, so I need some kind of money coming in," he said. "Right now we're down to my last paycheck, and after that we'll have to use credit cards. It's really depressing to see everyone out of work. There's just no money coming into Hawai'i."

Hotel operators say they hope to avoid laying off workers completely and are optimistic the industry will recover quickly.

"Layoffs is the last thing we want to do, and we don't anticipate it," said Claire Morris-Dobie, spokeswoman for the 639-room Hyatt Regency Kaua'i Resort and Spa. Occupancy levels are down, she said, but some guests who were delayed on other islands while airports were closed are now arriving, and others who postponed trips have now rescheduled and are due to come soon.

Cynthia Rankin of Starwood Hotels said the company, which operates more than 7,000 rooms in 13 hotels across the state, said the company had not laid off any employees but had definitely reduced work hours.

"Hopefully that will be the extent of it," she said. "Everyone's hurting and there's a trickle-down effect, but we're hoping it's going to start picking up in the next couple weeks."

The 3,000-room Hilton Hawaiian Village hasn't laid anyone off but has also reduced staff levels by cutting some work hours, spokeswoman Paula Imamura said.

"It's a short-term solution at this time," she said. "We're looking at this on a day-to-day basis and making adjustments. Everyone in the tourism industry right now is facing adjustments."

Hawai'i Hotel Association president Murray Towill said it was too early to know whether widespread layoffs could be expected soon. That will depend largely on how the United States responds to the attacks and on whether any more would occur.

"Part of the issue is the uncertainty of what's happening next," Towill said. "None of us know."

Most travel marketing efforts have been put on hold since the attacks, out of respect for the situation and a realization that advertising would not do much good right now, he said.

"The real issue is the timing of getting back into the marketplace," Towill said. "It's really a sensitivity issue and an effectiveness issue."

Jack Hufstetler, operations director for many hotel shows and special events across the state, said he never dreamed that the work force could be damaged so badly so quickly — and that he would be waiting in the unemployment line.

"I'm just amazed at the impact of this terror attack," he said. "You would never guess how deep it would penetrate into Hawai'i's economy. Now everyone in Hawai'i is a victim of the attack."