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The Honolulu Advertiser
Posted on: Tuesday, September 16, 2008

Hawaii retailers in Waikiki say they're struggling to make it

 •  Wall Street crisis quickly hurts Hawaii

By Dan Nakaso
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

James Donnelly, location manager for the Hans Hedemann Surf School, examines his inventory of boards. His company is still getting business, he says, because of its heavy use of marketing. "Surfing is still a big enough pull," he says, adding, "we advertise a lot."

GREGORY YAMAMOTO | The Honolulu Advertiser

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Waikiki beach-boy Danny Tamonte has been teaching surf lessons for 25 years and has never seen business so slow.

Tamonte, 46, spent last week offering his services as a surf instructor and wrangled a trio of customers, but he's staring at a couple more gloomy months of slow business — at least.

"This year is the worst," he said, echoing the feelings of other small-business operators in Waikiki. "Gotta hustle more to get business."

A few small businesses up and down Kalakaua Avenue said that customer traffic during this "shoulder season" — the traditionally slow time between summer and the holidays — seems comparable to other years.

Others called it the worst year ever.

Total visitor spending by airline passengers is off 5 percent for the first seven months of 2008 compared with 2007, according to the state Department of Business, Economic Development and Tourism. But total spending for airline passengers for the key month of July was down a whopping 14.9 percent — or $177.3 million — compared with July 2007, DBEDT said.

The drop is due to both a 13.7 percent decline in visitors arriving by air and a decline in how much each of those tourists spends a day, which is down 2.8 percent to an average of $175.

Which might explain why the city and county's visitor kiosk at the Kapahulu Avenue end of Waikiki continues to see about the same number of tourists as during a normal shoulder season. Tourists come there mostly for information about $2 bus fares to free destinations such as the USS Arizona Memorial, the North Shore or how to ride TheBus all the way around O'ahu, said Charlie Wolfe, who coordinates the kiosk's volunteer workers.

"We're down, but we're not down by that much," Wolfe said. "Maybe it's because we have the best maps in Waikiki — and they're free."

'EVERYTHING IS DOWN'

Customer traffic that actually translates into sales is depressingly low at the 30-year-old Gardenia Gift & Jewelry kiosk in the International Marketplace, which operates seven days a week on the labor of Amy Wong, her mother, father and brother.

What's even worse, Wong said, this sluggish period comes after a surprisingly slow summer tourist season.

"This is the worst year ever," she said.

Sept. 11, 2001, may have represented the single worst sales day in the history of Waikiki, Wong said. But this Sept. 11 was just one day out of many depressing days and months dating all the way back to spring break.

"Normally, July and August are our best months," Wong said. "We've had no business at all this July and August. Everything is down considerably."

The family used to employ a handful of employees even during the shoulder season. They're all gone now. Mother and daughter work the morning shifts while brother and Dad take over until midnight.

On top of droopy sales at the kiosk, Wong's husband was laid off after 18 years as a mechanic when Aloha Airlines shuttered its passenger service in April, and he only found work at Hawaiian Airlines last month.

"We were so blessed when he got hired," Wong said. "It's been so hard on us."

At the Hans Hedemann Surf School, instructors are still booking surf lessons and renting body boards and surfboards every morning.

"Surfing is still a big enough pull," said store manager James Donnelly.

But he points to another, major reason why his sales aren't as low as at some other businesses.

"Marketing," Donnelly said. "We advertise a lot."

Across Kalakaua Avenue, on the Waikiki Aquarium side of Waikiki Beach, Air Force Senior Airman Chris Martin, 22, and his girlfriend, Continental Airlines flight attendant Jamie Trobridge, 25, represented that rarest of species in Waikiki these days: Paying customers.

They rented a beach umbrella from one of Hawaiian Oceans Waikiki Inc.'s three beach-boy stands, where manager Donna Lynch said "the last four months have been brutal."

"Every month has gotten progressively worse," she said.

After paying employees for the day, the kiosk often ends up losing money.

"We're upside down on many days," Lynch said.

Trobridge said the $5 fee for one hour's use of an umbrella is worth the cost.

"This guy burns," she said, pointing to Martin. "That's why he's in the shade and I'm not."

Beach boy Phillip Lagmay, who celebrated his 65th birthday on Sept. 11, puffed on a cigar outside the Star Beachboys stand and tried to think of a worse tourist season for Waikiki.

"This year is bad, really bad," Lagmay said. "We've really been affected."

FEWER BEACH BOYS BUSY

During previous busy summers, surf instructors were giving 200 lessons or more per day. And during the off season, they could still count on 30 to 40 lessons per day.

These days, surf instructors are lucky if they even get 20 students a day, Lagmay said.

Star Beachboys normally would have up to 25 beach boys helping tourists. Now it's hardly worth the effort for seven to nine beach boys to show up for work, he said.

As a pair of beach boys called out offers of canoe rides, Lagmay said "I'm here because I'm retired. Otherwise, I couldn't afford to come here."

It's gotten so bad for businesses that Lagmay said an employee of a national pizza chain walked across Waikiki Beach last week with large pizzas he was selling for $6 each.

"Everybody's doing terrible," Lagmay said.

Near the police substation, tourists Rob McCurdy, a 25-year-old visitor from Chicago, and Mike Lewis, 27, who just won an Olympic bronze medal with the Canadian rowing team, separately heard Tamonte's call for surf lessons.

Lewis arrived in Honolulu knowing he wanted to take a surf lesson and just happened upon Tamonte's stand.

But McCurdy plans on dropping even more money during his stay on O'ahu.

He just got certified as an open-water scuba diver here, plans on getting his advanced scuba certification during his visit and may even dive with sharks.

The key to getting the business of customers such as McCurdy is to chat them up, said Falisha Riccobene, who works at one of Maui Divers' several "pick-a-pearl" operations in the International Marketplace.

"We know the economy is down, and we certainly feel it," Riccobene said. "So I feel I have to talk to every single person I see."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com.