The state of tourism: The Quarterly Report

By Dan Nakaso
Advertiser Staff Writer

Months, years and decades from now, people will look back at the period from Sept. 11 to the expected economic recovery as another historical footnote — like the bursting of the Japanese investment bubble or the Persian Gulf war — that serves to benchmark hard times in the Islands.

Local restaurants left, shed thousands of jobs after Sept. 11 but have been strengthening slowly in recent months. Hawai'i hotel workers, center, particularly on O'ahu, have coped with reduced hours and layoffs as occupancy fluctuates. Workers in the transportation industry, right, such as tour-bus operators, have been hardest hit in the tourism downturn.

"It makes you want to cry," said Peter Manicas, a University of Hawai'i sociology professor and director of liberal studies. "It takes a psychological toll and children learn that they can't repeat the same mistakes of their parents. One of the lessons they learn is, 'I can't make it in Hawai'i.' "

The sharp spike in Hawai'i's unemployment figures — and their eventual subsiding — essentially track the blow dealt to the state's economy driven by the downturn in travel after Sept. 11. The numbers highlight the state's continuing dependence on tourism as an economic growth engine, but they fail to measure the weight on the spirit of those who have lost tourism jobs.

Mike Danbara, a former tour bus driver, stood outside the state unemployment office on Punchbowl Street recently with a fistful of forms for unemployment insurance and remembered driving through Kahala with his three children as they ooh-ed and ahh-ed at the oceanfront mansions.

"I told them, 'That's not going to happen in Daddy's lifetime, but it could happen in theirs,' " said Danbara, who was a week away from turning 40 and was staring into a midlife crisis that includes unemployment, Chapter 13 bankruptcy protection and anxiety over his family's future. "I like to tell them the truth: Daddy first has to find a job."

Hawai'i is expected to trail the rest of the country in bouncing back economically after Sept. 11. Some economists said they believe the revival has begun. Others said it won't truly be seen until the fall or perhaps the end of the year.

But even when the economy is declared healthy once again, the scars will remain.

The unemployment rate peaked in November at 5.3 percent and has fluctuated since around 4.4 percent.

In the worst week — Sept. 29 — 5,337 people filed unemployment claims, where only 1,400 claims were being filed on average before Sept. 11. The last week in April was more typical, with 13,895 people on unemployment statewide — down from a Dec. 8 high of 19,559 people.

The numbers hide the pessimism that sometimes drives people out of Hawai'i, said Andy Kish, who analyzes Hawai'i's economic data for Economy.com.

"If you look closer," Kish said, "the number of people in the labor force has dropped by almost 5,000 from November to February. Those people are just getting discouraged about trying to find work and are leaving the labor force. Maybe they've gone back to school or migrated away. Either way, they've given up."

Right after Sept. 11, some students at UH's School of Travel Industry Management openly questioned whether they should bother getting their degrees.

"There was a noticeable pessimism among the students," said Mark Hukill, the school's interim associate dean. "Some were visibly upset about being connected to an industry that had taken a sharp nose dive."

Hukill told students that bad times in Hawai'i's tourism always get better. "Invariably, tourism will continue to be part of our economy," he said. "My view is that it shouldn't be the only thing driving the economy."

At the beginning of each semester at UH, Manicas tells the 150 students in his introduction to sociology course to write a paper entitled, "How to Get Ahead in Hawai'i."

Their words reveal a cynicism that troubles Manicas.

"A lot of kids say the only way to get ahead in Hawai'i is to be born rich," he said. "Or the way to get ahead in Hawai'i is to move to California. I get kids who tell me the way to get ahead in Hawai'i is to invest in real estate. Where are they going to get half a million dollars? Because two paragraphs later they tell me that they're still living at home."

For each class, Manicas estimated that one-third will leave for the Mainland to find work.

The Sept. 11 blow to Hawai'i's economy was generally restricted to the $10 billion tourism industry, which employs one-third of the state's workers. To Barbara Street, an economics professor at Chaminade University, the experience, once again, underscored the danger of relying so much on visitors.

"We're obligated to tourism," she said. "The sugar industry is gone and we haven't found substitutes for it. That makes tourism all the more important and yet tourism hasn't been able to fill the pukas. It really shows that we need to find alternatives to tourism."

Tourism suffered brunt

Economists had predicted that the effects of Sept. 11 would tear through all aspects of Hawai'i's economy.

Instead, "It turned out that most of the effects of 9/11 were contained to the tourism sector," said Leroy Laney, a Hawai'i Pacific University professor of economics and finance. "The recession that we had was an uneven and spotty recession. Tourism was hit and anything dependent on Japanese tourism was hit even harder. But other sectors of the economy tended to sail through."

Construction, real estate and auto sales — "anything that you had to borrow money for did pretty well," Laney said.

While hotels and tour operators are still shy about rehiring workers, other smaller industries can't find enough qualified help.

Mortgage companies, banks, computer and technical industries, hospitals and healthcare services are asking employment agencies for temporary workers.

"We're swamped, we're really busy," said Sandra Ohara, who specializes in technical-field job placements for Adecco. "We're looking for people to fill a lot of jobs. We get calls coming in every day from Kapiolani Health Systems and Queen's for people with skills."

Other areas strong

Two public job fairs held since Sept. 11 and a third set for May 22 tell the same story.

For the first time, no hotels or tourist-oriented companies came to the January job fair. So far, none are scheduled for the next one at the Neal Blaisdell Center.

"I thought we might have one or two," said Beth Busch, vice president of the western region for Success Advertising, which helps produce the fairs. "There's nobody so far and I don't think they're coming."

But banks are hiring for everything from tellers to middle managers, Busch said. "Healthcare, lots of healthcare, and even retail is strong," she said. "A lot of people are looking for skilled nurses and middle managers."

Laid-off, unskilled hotel workers will find plenty of openings if they're willing to work in fast-food restaurants. "If they're looking for more hotel work, their prospects are not good," Busch said.

But UH's School of Tourism and Industry Management saw signs of hope last week at its job fair.

Typically about 25 recruiters from hotels, transportation companies and tour operators arrive on campus to talk to the graduates. This semester Hukill, the interim associate dean, was relieved that 19 showed up — all with management-track jobs.

"We were wondering if any would come at all," he said. "We are mildly surprised and happy and pleased."

For those who aren't being recruited by some of Hawai'i's biggest hotels, the unemployment line is filled with the faces of rejection.

• Sonny Edra is thinking of going to community college to study computers after he was fired from his job as a cook after nine years. Even if he goes back to school, Edra knows he's going to have to find work somewhere to pay for it. "I'm really upset," he said. "This is really frustrating."

• Virginia Kurzyniec is thinking about moving to Las Vegas with her waiter-husband because she can't find work since being laid off from her job selling shoes for Nordstrom. "I cried for a long time," she said.

Her 10-year reunion at Castle High School is coming up and Kurzyniec said she worries about what to tell her classmates about how her life turned out.

"I might have to make up a story," she said.

• Pearl Naope lost her job as a hotel accountant one month after Sept. 11 and finally got a job last week at a bank inputting mortgage and loan data. The new job is outside her accountant training. But it's work and Naope is grateful. When her boss called to offer Naope the job, she was so happy that she forgot to ask the one question that nags at her.

"There are so many people who are qualified," she wanted to say. "Why did you pick me?"

Reach Dan Nakaso at 525-8085 or dnakaso@honoluluadvertiser.com.