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HOTELS State Chief Economist Eu-

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have come to Hawaii daily.
It’s not surprising that
hotel revenue per available
room was at $263.73 for
February and by the week
ended April 25 had fallen
95% to $13.25. Revenue per
available room, considered
by many in the hotel indus-
try as the best measure of
performance, is the amount
that a hotelier gets for each
room regardless of its occu-
pancy status.
“This is catastrophic for
our economy,” said Erik
Kloninger of Kloninger &
Sims Consulting, who spoke
Thursday during a Hawaii
Economic Association brief-
ing on the impact of
COVID-19 on Hawaii’s econ-
omy. “Even after 9/11 when
the planes stopped flying,
people were stuck here, so
the hotels still had guests.” Hawaii hotel occupancy began declining in March as COVID-19 fears and tourism
9/11’s impact
Kloninger said the Sept.
11, 2001, terror attacks
caused a 27% drop in
monthly arrivals and that it
took Hawaii 29 months to
return to the pre-event level.
The 1990 to 1991 Gulf War
caused a 26% monthly de-
crease in arrivals that took
11 months to undo. The
2008 financial crisis caused
a 19% decrease in monthly
arrivals that didn’t come
back for another 41 months.
How long will it take for
tourism to come back this
gene Tian, who also spoke
at the HEA event, which
drew more than 700 regis-
trants, said he assumes the
economy will follow the
2009 recovery path.
Tian said it might take
two years for Hawaii’s non-
tourism sector to return to
2019 levels and another five
or six years for the tourism
sector to get there.
“Even after the virus cri-
sis is finished, then the next
one is coming from the eco-
nomic recession,” said Tian
of the Department of Busi-
ness, Economic Develop-
ment and Tourism.
In the near term, Tian en-
visions that Hawaii’s GDP
CINDY ELLEN RUSSELL / APRIL 13 could fall by more than 12%
year over year to $85 billion.
Hotel occupancy in Hawaii has dropped a staggering amount and will financially
He anticipates year-over-
affect all facets of Hawaii’s economy. Waikiki has seen less car and foot traffic
year spending for tourism
since the lockdown in March.
might fall 57% to $9 billion.
Speaker Paul Brewbaker,
principal with TZ Econom-
STATE OF HAWAII HOTEL PERFORMANCE BY WEEK
ics, said that’s not the worst
GDP decline Hawaii has
lockdowns ensued. During the week of April 19-25, statewide occupancy was just over seen. It actually fell 35% in
10%. In comparison, Hawaii hotels statewide were at nearly 85% occupancy in 1947 during the post-WWII
February and were at nearly 45% in March. ADR is the average daily room rate. period, Brewbaker said.
REVPAR is revenue per available room. The 1936 to 1937 San Fran-
2020 ADR 2019 ADR 2020 occupancy 2019 occupancy cisco Bay Area maritime in-
dustry strikes also took
$350 100% tourism to zero for about
90% six months, he said. Then
$300
80% there was the impact on
$250 70% Kauai tourism from Hurri-
60% canes Dot, Iwi and Iniki,
$200
50% Brewbaker added.
$150 40% “These outsized and fat-
$100 30% tailed event risks are rare,”
20% he said. “But we do have a
$50 history of getting over them.
10%
$0 0% We can still learn from some
of these experiences.”
1/5-1/11/20
quickly and safely Hawaii
recovers tourism, he said.
But the interim is sure to
be painful. Tian’s GDP illus-
tration assumes visitor ar-
rivals will decline 99% in the
second quarter and drop by
60% in the third and fourth
quarters combined.
HTA reported in March
that 434,856 visitors had
traveled to Hawaii — some
54% fewer than March 2019.
HTA also reported that visi-
tor spending fell to $720 mil-
lion, a roughly 52% drop
from the $1.5 billion or so
generated in March 2019.
Sean Dee, executive vice
president and chief market-
ing officer for Outrigger Hos-
pitality Group, said March
results were worse than ex-
pected.
“The restrictions and 14-
day quarantine enacted by
the governor have accom-
plished their objectives
with a decrease of over 99%
in visitor arrivals over the
past six weeks. Of course,
April results will be devas-
tating, and we have had to
temporarily suspend opera-
tions at many of our proper-
ties,” Dee said. “Obviously,
as long as the quarantine is
in effect, we will not be able
to reopen our properties.”
The tourism collapse will
have a trickle-down impact
on all facets of Hawaii’s
economy, including state
revenue, which is highly
dependent on tourism
spending.
Seth Colby, a tax research
and planning officer for the
state Department of Taxa-

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time? In this case, Brewbaker tion who spoke at the HEA

“Maybe never, if that’s
what we want. Maybe never
despite our best efforts.
Maybe three to four years if
all the stars align,” Klon-
inger said. “This is a public
health crisis, and that’s the
first thing that will need to
be addressed. The rest of it
will happen according to
the time frame that we can
accommodate and to the
extent that demand is
there.”
said the decrease event, said the tourism in-
“shouldn’t unduly frame the dustry accounts for 30% to
way that we think about the 35% of state tax revenue,
Hawaii hotel performance info:
future from this point for- accounting for indirect ef-
For the week of April 19 – April 25 ward and the more aggres- fects. It contributes 17.5%
OCCUPANCY ADR REVPAR sively we approach the directly to state revenue,
State of Hawaii 10.3% $128.33 $13.25 recovery of tourism as an Colby said.
export activity.” “Tax revenues are cor-
Oahu 9.8% $142.66 $13.95
related with economic
Maui County 10.0% $115.51 $11.52 Road to recovery growth,” he said. “General
Kauai County 5.5% $125.91 $6.87 Screening, testing, trac- fund collections have been
ing, isolation, tracking or a robust year to date but
Hawaii County 18.7% $96.79 $18.11
combination of those op- are expected to decline
Source: HTA tions will depend on how significantly.”

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