An empty Waikiki triggers a soul searching about Hawaii’s no. 1 tourist destination

How the COVID-19 pandemic could reshape Waikiki as a visitor destination

WAIKIKI, Hawaii (HawaiiNewsNow) - On what would typically be a hectic June morning for Duke’s Waikiki, the restaurant is instead strangely quiet and dim. A skeleton crew is busy stacking chairs, wiping tables and sweeping the floors, preparing for the return of dine-in customers after months of being closed.

Dylan Ching, who runs Duke’s Waikiki and other restaurants in the islands, summed up the COVID-19 shutdown in the state’s no. 1. tourism destination in one word: Depressing.

“This restaurant, it is such a marker for Hawaii. For it not to have life in it or people having an experience and a smile on their face and having a beer and having nachos or fish tacos, that’s like taking a part of you away,” Ching said.

But he’s also struggling with something else: He wants tourism to reopen, but isn’t suggesting that things go back to the way they were — with throngs of visitors crowding sidewalks, beaches and just about every attraction.

“I really feel like we have a responsibility to open up responsibly,” he said, “but have a place that has some good feeling, aloha spirit, that makes people feel like we’re OK.”

The coronavirus pandemic has upended the state’s economy and left Waikiki a virtual ghost town. For industry experts, business owners and residents alike, it’s also triggered a kind of soul searching about how Hawaii tourism should be managed going forward and, by extension, what the future of Waikiki looks like in that new world.

Most agree on one thing: They want Hawaii to see far fewer visitors each year. And at least in the short-run, that’s all but a certainty.

Jerry Agrusa, associate professor at the University of Hawaii’s School of Travel Industry Management, said once visitors start returning to Waikiki later this year it will be a “different normal” — far less crowded than it used to be.

“We won’t have as many, but hopefully we’ll have this higher-spending tourist,” he said. “Somebody that comes here for the right reasons too, not just to come and say ‘I’ve been,’ but come to enjoy what Hawaii has to offer: the weather, the culture, the people. Let’s get that. Let’s focus on that type of tourist.”

A ‘tourism mecca’ empty of visitors

Since late March, in the wake of Hawaii’s stay-at-home orders and mandatory quarantine for travelers, the state’s top economic driver has been in a state of purgatory.

Hotels in Waikiki are empty and most are closed. Many businesses remain shuttered. And eateries are still slowly reopening.

Industry experts agree that the total collapse of Hawaii’s big money-maker would trigger dire impacts for the entire state economy. But the shut-off of tourism to Waikiki has also prompted some debate, especially as residents begin to flock there to take advantage of beaches they rarely frequented.

The question: How do we create a tourism that’s profitable without overtaxing our resources (and our patience)?

Just last year, Hawaii saw more than 10 million tourists each year — and six in 10 were visitors to Waikiki. Resident surveys found a dissatisfaction with the way things were, but there was little impetus to change it.

"Prior to the pandemic, this was a tourism mecca," Argusa said, standing on an empty sidewalk along Kalakaua Avenue on a warm afternoon. He added, "you could get a job every day."

[READ MORE: Waikiki’s wild ride: From the seat of Hawaiian government to a world-famous tourism mecca]

Things are very different now.

Hawaii's tourism mecca is left empty with ongoing quarantine rules

The state plans to reopen tourism to Hawaii in August, wooing visitors back by allowing them to get tested for COVID-19 before arriving in Hawaii in order to avoid the state’s mandatory quarantine.

How quickly tourism will rebound is anyone’s guess. Earlier this year, the state projected that visitor arrivals for 2020 will top out at 3.4 million. By comparison, Hawaii saw 2.1 million visitors alone from January to March of this year. That means the state is expecting roughly 1.3 million visitors over the remainder of the year.

They’re numbers so low that you have to go back to 1970s to see anything comparable. And they’re visible in the empty sidewalks and streets and boarded up businesses.

Agrusa likened the scene to the Sept. 11 attacks — when all air travel in the U.S. was stopped.

"Within three days, this is what it looked like: No flights in, no flights out," he said. "I thought, 'Oh my goodness, we're going to collapse. The island is going to collapse, economically.'"

Hawaii hasn’t collapsed, but the scope of economic pain is unprecedented.

The unemployment rate on Oahu tops 20%, and a number of businesses have already closed permanently. Other business owners say they’re not sure how much longer they can survive without tourism dollars.

Rick Egged, president of the Waikiki Improvement Association, also said he hasn’t seen anything like this since 9/11. But the pandemic’s impact has been far worse.

"Waikiki's streets are very empty," he said. "So there's no question that without a doubt, this is the worst situation that Waikiki tourism has had in its history."

Egged estimates that roughly 50,000 jobs in Waikiki were lost due to the pandemic. Even once the quarantine is over, he said, it could take months — if not years — to get to any sort of normalcy.

Businesses struggle to stay afloat

Like most restaurants in Waikiki, Tiki’s Grill and Bar at the Aston Waikiki Beach Hotel, relies on visitors for its income. Once the 14-day quarantine was put into place, it became increasingly difficult to sustain business.

During the closure, Tiki’s decided to use the downtime for renovations.

And rather than laying off its employees and hiring contractors, the business put its regular staff to work sanding, painting and reorganizing the outdoor deck with refurbished statues, signage and other fixtures.

Back when the coronavirus outbreak first emerged as a potential threat to Hawaii, Tiki’s took the risk of shutting down days before orders were issued — still unsure of how the situation would all unfold.

Michael Miller, director of operations for Tiki’s, said he thought the closure was going to be short-lived.

“We had this thought it was almost going to be like a tropical storm or a hurricane come in, wreak some havoc and then you recover, you get going,” he said. “We had no idea that it would be going on this long.”

Months after it closed its doors, the business is struggling to stay afloat while also covering regular expenses ― like rent and utilities ― along with health care for its 150 employees. Miller said he’s hoping to reopen Tiki’s as soon as the Aston Waikiki Beach Hotel starts welcoming guests back — likely in August.

Doors remain closed at Tiki's Grill and Bar due to ongoing coronavirus pandemic

Just down the road, Duke’s Waikiki also faces extraordinary losses.

The eatery says about 80% of its customers are visitors. Before dine-in could reopen, Duke’s tried to offer takeout. But Ching, the vice president of operations for TS Restaurants for Kauai and Oahu, said it didn’t make financial sense. So the restaurant had no choice but to close entirely in mid-April.

“We have roughly 350 employees at Duke’s. We laid off 350 employees or furloughed,” Ching said, adding that the restaurant did its best to provide extra pay and medical benefits.

“With the closures of the beaches, not just the ocean, it made the beach feel empty. The streets were empty, and at that time it was a little bit more gloomy in the weather.”

Some of Duke’s employees were able to get rehired once the restaurant opened its doors for dine-in service on June 5 — something that Ching had been looking forward to for weeks on end.

One of Waikiki's top restaurants has had to overcome many hurdles during pandemic

What does the ‘new Waikiki’ look like?

Duke’s and many other businesses dependent on visitors are anxiously awaiting the day that tourism returns to Hawaii. But even those who make their living in tourism recognize it’s time for a change.

“We’re a host culture and our tourism and our beauty and our people are what make us special, and sharing that with the world I think is still our bread and butter,” Ching said.

“I do feel that we should do our best to keep our visitors in our resort areas. I don’t feel that they should be in our residential areas or at least we should make it more difficult or we should level the playing field.”

The city agrees.

In a recent news conference, Honolulu Chief Resilience Officer Josh Stanbro said Hawaii needs to consider “regenerative tourism” ― an idea that involves learning from the past to redesign tourism.

“I think we have found over time we’re getting more and more visitors and yet less and less dollars are actually sticking in the economy,” Stanbro said. “With an attempt to diversify the economy and build back better, is there ways that we can continue to have a mainstay?”

Industry experts, like Agrusa, also have a different vision for Waikiki.

The professor said the state needs more “high-spending” tourists — though not necessarily rich tourists — who will invest in staying in a hotel and will support local businesses.

"You want the person that's ready to try everything," Agrusa said.

“We need the folks that stay in the hotels so that we employ more people so that those folks making the money, so that generates the economy, and then the economy can keep rolling and rolling and rolling.”

He said visitors on budget trips, staying at illegal short-term vacation rentals and shopping in grocery stores, drop less money in the islands but have as much impact on the state’s resources.

“Airbnbs or those types of vacation rentals, they don’t hire as many people,” Agrusa said. “Here in these hotels, they hire a lot of folks and that’s what’s important … we need the tourists that help employment.”

Bob Hampton, chairman of a beach activities service at Hilton Hawaiian Village Beach Resort and Spa, also wants to see a future for tourism that isn’t so invasive to residents.

He drew up a plan and submitted it to several lawmakers, offering recommendations on how to safely reopen Hawaii’s doors to tourism and think more deliberately about zoning for resort areas.

Hampton said keeping visitors out of residential areas might help prevent the spread of COVID-19.

And, he said, it would provide a model for going forward.

“Now the residential areas are all dotted with regular tourism and their quality of life is gone and they’re afraid that these tourists are going to bring disease, the virus,” Hampton said.

“So if there was a way we could have our zoning laws enforced, keep the visitors in visitor-zoned areas, local people in residential areas to feel safe.”

He said the last several years have shown Hawaii that more isn’t always better when it comes to visitor arrivals.

“Ten million visitors is not prosperity. Prosperity is 7 million. Because then we have prosperity in quality of life for our residents,” Hampton said.

Amid the COVID-19 crisis, experts at the Economic Research Organization at the University of Hawaii have also urged policymakers to dismiss the old philosophy of “more is better” when it comes to tourism.

In a recent policy paper, two UHERO economists suggested Hawaii adopt “smart destination” technology and practices that consider how to tailor marketing and better manage public attractions.

“There is no better time than now, as we plan for recovery to move toward a technology-based ‘smart tourism’ model,” the paper concluded.

“We shouldn’t default to the old recovery models of indiscriminate promotion: put ‘butts in seats and heads in beds.' We need to manage tourism no matter what the total arrivals are. The decimation of the visitor industry caused by COVID-19 has given us the opportunity to make a fresh (and smart) start.”

But first Hawaii has to reboot tourism.

And to do that, the state has to put its pre-testing plan in place while also beefing up screening at airports and preparing for an increase in contact tracing and testing protocols as new COVID-19 cases rise.

Egged, of the Waikiki Improvement Association, said those best practices will be key in giving visitors and residents peace of mind.

“There’s really nothing that can replace being able to bring visitors back,” he said.

He added that once the state does reboot tourism, Waikiki will likely “recover as quickly as the hospitality industry can in the U.S.” He added that during the Great Recession, the destination was one of the first places to recover.

“I think we’ll recover at a faster rate than most of the hospitality industry,” Egged added.

“Ten million visitors is not prosperity. Prosperity is 7 million. Because then we have prosperity in quality of life for our residents.”
Bob Hampton, Waikiki Beach Activities

And, Agrusa said, a vaccine will be a game-changer for Waikiki and the broader tourism industry.

Why? Because the “product” hasn’t been damaged, he said.

Despite high unemployment levels statewide, Hawaii’s coronavirus infection remained relatively low in the nation, giving the state — and Waikiki — a chance to pick up the pieces and start anew.

“The product is this beautiful ocean, this beautiful weather, the beauty of Hawaii, the beauty of Hawaii culture, because that hasn’t been damaged,” he said.

“We didn’t get an oil spill that pulled the tourists away. We will bounce back.”

Businesses in Waikiki are finding different ways to adapt to a 'new normal'

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