Richie Olsten, who has been in the helicopter tour business on Maui for half a century, has long developed a barometer for an economy dependent on tourism: rental cars parked at the island’s airport .
Alston fears a full-blown economic disaster since wildfires killed 115 people in the historic town of Lahaina. Restaurants and travel companies are laying off workers, and unemployment is soaring.
State tourism officials, who initially urged tourists to stay away, are now asking them to come back, avoid the fire zone and help Maui recover by spending money. Airlines have started offering deep discounts, while some resorts have slashed room rates by 20% or offered a fifth night free.
“I know what a terrible disaster that was. But right now we’re in crisis mode,” Olsten said. “If we can’t keep people who have jobs, how are they going to help family and friends who have lost everything?”
After the Aug. 8 fires, tourist arrivals to Maui dropped about 70 percent, to 2,000 a day.
Air Maui Helicopters in Olsten is now flying one to two flights a day, up from 25 to 30 before the fire.
As Maui Air’s director of operations, Olsten said the airline has fired seven of its 12 dispatchers. Pilots are spared because they only get paid when they work. Typically, they fly eight times a day, four to five days a week. It has now been reduced to just one day a week with only one or two flights.
A number of Maui hotels accommodate federal aid workers and Lahaina residents who have lost their homes. Even so, only half of the hotel’s available rooms are occupied, said Mufi Hannemann, president of the Hawaii Lodging and Tourism Association.
Even southern Maui, 30 miles (48 kilometers) south of Lahaina, is half empty. Hannemann called the situation “quite dire.”
The Hali’imaile General Store, one of Maui’s oldest restaurants, laid off about 30 workers and temporarily closed after business shrank to a tenth of its pre-fire levels.
“It just fell off a cliff,” said Graeme Swain, who owns the place with his wife Mara.
They cut jobs to preserve cash and save Harry Immel from the fate of the San Diego software company Swain ran in 2008. When the real estate bubble burst and the U.S. fell into recession, he made all his employees “suffer” and shattered the company’s growth. Business.
Swain hopes that Hali’imaile will last for decades to come. Hali’imaile, a grocery store founded a century ago for pineapple plantation workers, became a restaurant in 1987.
“There’s going to be a lot of soul-searching to see what’s the right thing to do to preserve this place,” said Swain, who plans to rehire everyone. His goal is to reopen next month.
Government data showed mass layoffs. Nearly 8,000 people in Maui filed for unemployment benefits in the last three weeks of August, compared with 295 during the same period in 2022.
Economists at the University of Hawaii expect Maui’s unemployment rate to climb to 10%. That peaked at 35% during the COVID-19 pandemic, but was only 2.5% in July. This time, there are no pandemic-era Paycheck Protection Program loans for businesses, nor any enhanced unemployment benefits for the unemployed.
Costume designer Gemma Alvior estimates that almost all of her customers at her Pulelehua Boutique in Kahului are locals. But that may not protect her in a place where tourism accounts for 75 percent of private-sector jobs.
“If they don’t have a job and they’re fired, how are they going to buy anything?” she said. “If they’re not working, what do they need to buy clothes for?”
One of the reasons for the slump in tourist traffic is that Hawaiian leaders, along with Hollywood celebrities, have asked tourists to evacuate the island.
The day after the fire, the quasi-state agency Hawaii Tourism said that “non-essential travelers are asked to leave Maui” and that “non-essential travel to Maui is strongly advised against.”
The agency said communities need to focus on recovery efforts and helping those who have had to evacuate.
Around the world, people have seen videos and photos of travelers jamming Kahului Airport to board planes.
The message has since changed.
“Maui is not closed,” Mayor Richard Beeson said in a recent interview.
People shouldn’t go to Lahaina or the surrounding West Maui area — “It’s not a place to gaze,” Beeson said — but the rest of Maui needs tourists. “Respect the West, visit other countries” is the motto of some people.
The Hawaii Tourism Authority has drawn up and published a map showing how Lahaina and West Maui relate to the rest of the island and highlighting how much remains open. Authorities have also launched a $2.6 million marketing plan to lure tourists back.
Two days after the fire, Hollywood actor Jason Momoa told his 17 million Instagram followers: “Don’t go to Maui.” More recently, he advised: “Maui is open. Lahaina is closed .”
Carl Bonham, an economics professor at the University of Hawaii at Manoa, predicted that travel to areas outside West Maui should return to pre-fire levels by Thanksgiving. Discounted tickets and marketing appeal should help, he said.
However, it is unclear when travel to West Maui will resume. The area includes the historic beach resort of Kaanapali, north of Lahaina, with 11,000 hotel rooms. That’s half of Maui’s total.
The disaster prompted state officials on Wednesday to cut their statewide 2023 economic growth forecast to 1.1% from 1.8%. They expect growth of 1.5% next year, not 2%.
State tax revenue is also expected to take a hit, which could require spending cuts in Hawaii. The Revenue Commission, which sets tax revenue forecasts, is due to release new estimates on Thursday. Bonham, a member of the committee, believes the state could lose between $20 and $300 million this fiscal year.
Governors and lawmakers must use the panel’s forecasts to draft budgets.
