Tourists, Hawaii’s visitor industry feel impact of travel cancellations

Hawaii’s visitor industry has lost tens of millions of dollars to cancellations since Gov. David Ige called for a travel pause, and travelers are losing plenty of money, too.

Kamaka Brown, a Hawaii native living in California, had been planning a 12-day stay in Hawaii this month but canceled after Ige on Aug. 23 requested that Hawaii residents and visitors delay all non­essential travel through October. The 74-year-old Brown said he wanted to respect local concerns and did not want to jeopardize his own health during the state’s well-publicized COVID-19 surge.

“I was concerned for my health as a senior. I was concerned about what was happening in Hawaii although I am vaccinated and I do all the precautions,” he said. “When I saw the critical mass that was happening, the situation with the hospitals, the ICUs, the daily infections, the words from the governor, I said, ‘You know what, this is serious and I don’t want to contribute to anything that is happening there.’”

Brown said he contacted Hawaiian Airlines and was issued a refund when he canceled his trip for Sept. 9 to 21. However, he is still out just under $3,000 in lodging costs for a Waikiki Banyan unit he booked through VRBO. He said the owner told him he did not cancel early enough and that Ige’s statement was simply a request, not a mandate.

He appealed to VRBO but was told he had not purchased a trip cancellation policy, and the company does not force hosts to issue refunds outside of their policies.

Texan Cheryl Brown said she and her husband, Robert, canceled their two-week vacation to Oahu and Kauai due to the COVID-19 surge and instead vacationed in the Ouachita Mountains of Arkansas.

The couple, who are not related to Kamaka Brown, had saved three years to take a dream trip to Hawaii and to see their son, who is in the Army and stationed on Oahu. After Ige’s well-­publicized request to pause travel, Brown said she spent more than 10 hours trying to cancel various reservations for their trip. She got credits for their airfare and timeshare bookings but is still waiting to get about $1,000 in refunds from a canceled boat trip and luau.

“I was especially frustrated and disappointed in Gov. Ige’s lack of leadership in this new surge of the COVID delta variant. He did nothing except to ask visitors to cancel their vacations to Hawaii at this time,” Brown said. “Gov. Ige is clueless. It’s just not that simple, and it cost people thousands of money to ‘stay away.’”

Similar stories abound as Hawaii’s visitor industry grapples with mounting pandemic-related cancellations and no clear policies on how to deal with the losses. Not all businesses, especially smaller, less capitalized operations, can afford to be as flexible as others, especially when there’s no mandate.

Mufi Hannemann, president and CEO of Hawaii Lodging &Tourism Association, said the messaging has been difficult for local businesses.

“It’s hard to deal with this because it wasn’t an executive order,” Hannemann said. “Folks that want to come can still come.”

WHILE that’s also true for travelers in the business and group market, strict gathering rules across the islands have had a severe dampening impact, along with the delta surges across the U.S.

Hawaii Data Collaborative reported that on Aug. 5, the seven-day daily average of visitors was 28,003. On Wednesday, Safe Travels Hawaii reported that only 17,012 of the passengers arriving through the state’s entry program were visitors.

A new report from the American Hotel &Lodging Association and Kalibri Labs projects that Hawaii’s hotel industry will finish 2021 down nearly $1.2 billion in business travel revenue from 2019. That makes the Hawaiian islands one of the 10 markets AHLA is projecting to end 2021 with the largest declines in business travel revenue.

Hawai‘i Convention Center General Manager Teri Orton said at a Hawaii Tourism Authority meeting in September that the pandemic has just about halved events and revenue.

Hannemann said that since Ige’s statement, Hawaii’s hotel industry has been reducing year-end forecasts to reflect an escalation in cancellations and a continued slowdown in bookings.

In the summer, Hanne­mann said, occupancy at most Hawaii hotels was running from 70% to more than 80%. Since Labor Day, occupancy has slid closer to 50%, which falls below profitability for most properties, and continues to decline.

“Certainly that’s going to affect employment,” he said. “Some workers have had their hours cut, others that have run out of (unemployment benefits) and were expecting to return to work may not come back as quickly as they would like. There have been some layoffs.”

Hannemann said one large hotel partner told him they have already downgraded their end-of-year forecast by $4 million and are expecting that number will increase as long as the governor’s messaging stays in place. A travel seller told him they have lost upward of $13 million since Ige sought a travel pause.

In contrast to the crowded sidewalks and long lines seen outside restaurants during the summer, the streets of Waikiki were mostly empty Friday afternoon and there was space at most establishments, although foot traffic picked up in the evening.

Kelly Sanders, Highgate Hawaii senior vice president of operations, said in just the first two weeks after Ige’s announcement, Waikiki hotels already had lost $1.7 million in September and $1.6 million for October, and that was factoring in new bookings.

“We are in negative pace here. We aren’t picking up enough new bookings to offset the cancellations,” Sanders said. “Normally, we pick up about a $1 million a day or more in revenue in Waikiki.”

By the time the slowdown ends, Sanders estimates Waikiki hotels could easily have lost $15 million to $20 million in hotel revenue, as well as revenue from food and beverage and retail.

Maui Mayor Mike Victorino said at a recent HLTA press conference that hotels on his island had lost $25 million in revenue and 52,000 room nights.

Jack Richards, president and CEO of Pleasant Holidays, said Sept. 8 that booking cancellations were up over 300% compared to 2019, and that cancellations on Sept. 7 alone were up 463% from the same day in 2019.

Richards said some visitors are leery of booking because they don’t know if they will be able to get a refund if they have to cancel. They also are concerned about Safe Access O‘ahu and all the other changing rules, he said.

“They are concerned that they won’t be able to get dinner reservations or go to their favorite activity,” he said. “There’s no question that Safe Access O‘ahu has had a chilling effect. People have been cooped up for 18 months. If they go on vacation, they want experiences.”

Many destinations have seen dampening demand from U.S. travelers as the delta variant has surged across the country, although not nearly to the same degree as Hawaii.

“Hawaii’s demand is negative,” Richards said. “We still have destinations like Mexico that are positive. There are no restrictions there, and there isn’t a testing requirement to get into the country. About 85% of the hotels that we do business with in Mexico are providing the testing to get back into the U.S. onsite and it’s usually free or at a nominal cost.”

He said the worst part about Hawaii’s situation is that it is confusing and leaves visitors inconvenienced and second-guessing themselves about what to do.

Jessica Lani Rich, president and CEO of the Visitor Aloha Society of Hawaii, a nonprofit that helps visitors in crisis, said she has had calls from visitors concerned about what happens if they decide to cancel or if they travel to Hawaii and then test positive for COVID-19.

“I think if we are going to say, ‘Don’t come here until the end of October,’ there needs to be some sort of cancellation policy,” she said. “Visitors should not be financially punished for doing the right thing.”

Rich said there have been few travel-related cases of COVID-19 in nonresidents; however, Hawaii is not equipped to deal with more than community spread.

“A few weeks ago a number of visitors called and asked, ‘What if I get COVID-­ 19 and I don’t have enough money to afford a hotel for seven to 10 days?” she said. “My answer is, ‘If you think you are going to get COVID-­ 19, don’t travel.’”

Rich said there has been a few instances in which she had to assist visitors who tested positive for COVID-19 during their stay in Hawaii. The easiest, she said, was when a mother and daughter got the virus and were staying in a large hotel suite where they could isolate themselves.

She said it is more challenging when visitors develop the coronavirus while staying in vacation rentals, since visitors are not allowed to quarantine there.

“We had a doctor in the past week who tested positive for COVID. He was here with friends in an Airbnb. They went home and he went into quarantine,” Rich said.

In other case from Labor Day, a visitor was staying at an Airbnb and had to move to a hotel when he tested positive.

“He was very concerned about where he was going to stay,” Rich said. “The state doesn’t pay for accommodations if visitors get COVID or have to quarantine.”

Rich said VASH also assisted the families of two visitors who died from COVID-19 during their visit.

The CDC continues to say that domestic travel is safe for vaccinated travelers, but that unvaccinated travelers should avoid nonessential travel.

Hannemann said he and other industry leaders have asked Ige to consider revising his message to make it clear the state would welcome vaccinated travelers.

“Rumors are flying that Hawaii will continue to ask people not to come here. Because of that, we really need Gov. Ige to address the issue by mid-October and not wait until the end of October, which could jeopardize the holiday season,” he said. “People are already canceling for November because of all the uncertainty.”