The September 11th attack
Hawai'i tourism in turmoil
| • | Some plans must veer off course |
| • | Neighbor Islands cope with tourist, spending drop-off |
| • | Hawai'i's appeal helps draw visitors |
By Susan Hooper
Advertiser Staff Writer
Eric Ramos lives thousands of miles from the targets of the Sept. 11 terrorist attacks, but the long shadow of the tragedy has stretched across a continent and an ocean to cast its frightening pall on him.
Eugene Tanner • The Honolulu Advertiser
Ramos, 29, a waiter at a Waikiki hotel, is one of nearly 6,000 Hawai'i workers who have lost jobs or had their hours cut because of the dramatic and unprecedented drop in tourism that followed the attacks in Washington and New York.
For Florencia Daga, a Waikiki hotel housekeeper, her hours have all but dried up.
The disaster, which involved the hijackings of four commercial airliners, cut to the core of Hawai'i's largest industry by making many travelers terrified of boarding airplanes. Others canceled planned trips to the Islands because the enormity of the catastrophe left them without the heart to take a Hawai'i vacation.
"It was something so far away and it even affects lei stands and businesses in Waikiki," Ramos, who is married and the father of an 18-month-old girl, said last Tuesday while waiting to file a claim for partial unemployment at the state labor department's Punchbowl Street office. "The trickle-down effect — it's amazing how that happened. It's very sad."
Even as they trim payrolls and cut other costs, Hawai'i tourism firms are wondering what the operating rules will be in this harsh new world. Nothing seems the same since Sept. 11, and several analysts have suggested that nothing ever will be again. And in a world threatened by apocalypse, how to market and sell a feel-good product like tourism becomes a major challenge.
Impact on Hawai'i harsh
Christie Wilson • The Honolulu Advertiser
The anxiety in the tourism industry is quickly rippling through the rest of Hawai'i. The $11 billion industry accounts for more than 25 percent of Hawai'i's economy, and provides jobs for about 200,000 people — nearly one-third of the state's total civilian work force. But local companies and residents don't have to be in the industry to profit from its success or suffer with its woes. Many businesses have tourism clients, just as many residents have relatives who work either full-time or part-time for hotels, restaurants, airlines and tourist attractions. When tourism lurches into low gear as abruptly as it did this month, those businesses and families measure the harsh effects in lost sales and lost wages.
For hairstylist Juvenal Hidalgo, at left, below, and receptionist Connie Cuello, business plunged 60 percent, forcing staff cuts.
State economists have estimated that, depending on the severity of the downturn through December, Hawai'i could lose anywhere from 5 percent to 10 percent of its total visitor arrivals for 2001, from $492 million to $1.3 billion in gross state product and from 2,000 to 24,000 jobs.
Economists say they doubt circumstances will reach the worst-case extreme, but they acknowledge that forecasting at a time like this is a difficult task, because nothing in current experience even remotely compares with the Sept. 11 attacks and their aftermath.
"If this were just a Gulf War shock, then we'd all go back to normal in a couple of quarters," said Lawrence Boyd, a labor economist with the Center for Labor Education and Research at the University of Hawai'i-West Oahu.
"That's what makes this historically unusual," he said. "In the past, you have a shock and you get over it." In this case, given the threat of war, the possibility of other terrorist attacks and a continuing case of the jitters by the flying public, "You're dealing with prolonged uncertainty," Boyd said.
Gov. Ben Cayetano has termed the effects of the Sept. 11 hijackings the most severe economic crisis in Hawai'i's history. Analysts say many will be affected, from workers who lose jobs, to hotels that close restaurants, to small businesses that are forced to shut their doors. Even those local consumers who have jobs are likely to curtail their spending out of fear for their own future. And those decisions will translate to less revenue for struggling merchants.
And even if tourism rebounds soon, the trouble that has visited the Islands this month is likely to reverberate for months to come.
"These are very tough and complex times," said Sharon Weiner, group vice president with retailer DFS Hawaii, whose duty-free offerings appeal heavily to Japanese tourists. "We are in terrifying new territory when it comes to our business —Êand I think everyone in Hawaii's business. This isn't just about our company. It's about Hawai'i's ability to survive, in all aspects."
Other crises
Gregory Yamamoto • The Honolulu Advertiser
Hawai'i's largest industry has known hard times before. But the shock the Sept. 11 attacks sent through Hawai'i's tourism businesses is unlike anything the industry has faced before. All U.S. airports were closed for two days following the day of the attacks, and by the time Hawai'i airports reopened Sept. 13, the world had been transformed. Airlines were cutting back on flights, and skittish passengers were canceling trips by the thousands. Hawai'i's tourism industry is particularly vulnerable in the new climate because, unlike other states and most other regions worldwide, it depends almost completely on airlines to convey its visitors.
Billy Remular, secure in his job after 12 years at Aloha Airlines, said sad goodbyes to less-senior friends last week who got caught in the airline's 250 layoffs.
The day before the attacks, 9,506 Hawai'i residents and visitors arrived at the Honolulu International Airport, according to figures from the state Department of Business, Economic Development & Tourism. One week later, the number of residents and visitors flying into Honolulu had shrunk to 7,156 — a decline of nearly 25 percent.
"The visitor industry has been devastated by the national tragedy," said Conrad Okuma, vice president and general manager of E Noa Corp., the operator of E Noa Tours and Waikiki Trolley Tours. Because of the drop in business since the attacks, E Noa Corp. last week announced it will lay off up to 60 of its 300 workers, and the company could not say whether the cuts would be temporary or permanent.
"If you've been in Waikiki recently, you can see that it's pretty much of a ghost town," Okuma said last week. "That's going to have a ripple effect to the other industries as well. The food industry, the beverage industry, the restaurants, the wholesalers and the retailers will be scaling back their operations as well."
Among the other local businesses that have laid off or furloughed workers, cut their hours or in other ways trimmed payrolls since Sept. 11 are Aloha Airlines, Hawaiian Airlines, several hotels and restaurants, some Waikiki showrooms, and attractions like Atlantis Adventures, operator of Atlantis Submarines, Sea Life Park, Waimea Valley Adventure Park and Navatek Cruises.
"It's a matter of survival," said Brian Tamamoto, managing director of consulting firm Human Resources Solutions, and a 20-year veteran of the tourism industry. "At each business, they have to assess: How do I do special promotions to get my customers back in? For the Hawai'i Visitors & Convention Bureau, for the state, the question is: How do we get the tourists back to Hawai'i?"
Hopeful signs
Eugene Tanner • The Honolulu Advertiser
In spite of their very real anxieties, some in the tourism industry point to glimmers of hope.
Stores and restaurants in the Royal Hawaiian Shopping Center and other businesses in Waikiki have seen a huge drop in visitors. Many people say they are staying home because they feel flying is not safe.
Representatives of several companies say that business has slowly improved since the grim week immediately following the attacks. There are reports that some Mainland travelers who had been planning European vacations have canceled them in favor of visiting Hawai'i, which they perceive as far safer. And with out-of-state visitors absent, hotels and retailers are busy wooing kama'aina customers with offers of discounted rooms and merchandise.
In some businesses, local customers are making a difference.
"This week we've seen a little pick-up in the last couple of days in traffic," Becky Iverson, co-owner of clothing store Bungalow Bay in the Aloha Tower Marketplace, said on Tuesday after she rang up a dress sale to a local shopper. "We're getting a positive response from the local people, too, saying they want to put something back into the community."
Iverson estimates 75 percent of her customers are tourists and that business was off about 50 percent the week of Sept. 17, but she said it has since improved somewhat. She and her co-owner husband, Dean, responded to the drop in customers by holding more sales and adding some advertising.
Iverson's worries about the effects of the Sept. 11 tragedy, however, stretch past her cash register and the sparkling glass windows of her shop.
"My concern is with the number of people who have lost jobs locally," she said. "They don't have money to put back into our economy. Without these people being able to put money back into our economy, I am concerned that there are going to be tough times ahead."
Nevertheless, she is — in spite of everything — attempting to stay upbeat.
"We're just trying to remain positive," she said. "I think that's important to relate to the customer. Maintaining a positive attitude is better than a long face. And hope — hope is our big word right now. I think we have to maintain hope for the future."
Reach Susan Hooper at shooper@honoluluadvertiser.com or 525-8064.
