Hawaii’s Tourism and Hospitality Industry 1

Impact of Covid-19 on Hawaii’s Tourism and Hospitality Industry

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 Hawaii’s Tourism and Hospitality Industry 2

Impact of Covid-19 on Hawaii’s Tourism and Hospitality Industry

Overview

From April 2020 when the Covid-19 outbreak was officially declared a pandemic by the

World Health Organization (WHO) across the globe, Hawaii’s tourism industry took a

significant hit and achieved a temporary standstill. Notwithstanding the fact that across the

Caribbean, the pandemic occurred at a time where countries such as Hawaii were being hit by

natural as well as economic shocks such as extreme weather events and hurricanes in addition to

the limited access to concessional funding and high levels of indebtedness. According to a report

provided by the United Nations World Tourism Organization (UNTWO) the rate of international

tourism were expected to decline between 60% and 80% (Mulder, 2020). With the tourism and

hospitality industry especially in Hawaii being among the major contributors to the rate of

employment and the economy as a whole, the outbreak of the pandemic has resulted into a

downturn that is affecting a vast array of people.

On this note, the food and accommodation sector of Hawaii employs about 113,000

individuals according to the data provided by the University of Hawaii Economic Research

Organization for the fourth quarter of the year 2019. Such a high level of employment amounts

to over 17% of the island’s non-farm jobs despite not including the thousands of the additional

retail jobs that embark on catering for tourists (Rosewicz, and Maciag, 2020). The intensity of

the situation can also be portrayed through the rapid increase in the number of employees that are

out to seek for unemployment benefits which according to a union that represents over 11,000

employees, the Unite HERE Local 5, this number has plummeted from an average of two

employees over some weeks before the pandemic to at least 30 people applying on a daily basis
 Hawaii’s Tourism and Hospitality Industry 3

(Yerton and Hofschneider, 2020). Furthermore, it is difficult to estimate the short-term or long-

term implications of such a situation considering that it is associated with high levels of

uncertainty as well as the contingent and subsequent relaxation measures.

Legal and Regulatory Issues Contributing to the Disaster

One of the regulatory issues that have significantly contributed to the impact of the

pandemic is the ban of tourism and travels within the region. During the first phase of the

pandemic, authoritative figures in Hawaii’s government such as Governor David Ige officially

asked tourists to stay away from the island for an indefinite period because of the uncertainty of

the period in which Covid-19 would take to be effectively managed (Studdert, Hall, and Mello,

2020). Ige proceeded to ordering the closure of all nightclubs as well as bars while only allowing

restaurants to serve food on take-away basis. Although the primary objective behind such

policies was to prioritize and protect the welfare of the community, it resulted into adverse

effects to the workforce engaged in the tourism and hospitality industry. As such, this mean that

the bar owners and their employees as well as the additional retailers that cater for the needs of

the tourists were out of business. The government itself was also affected by these policies

because it meant that the revenue generated from its tourism and hospitality industry would

significantly drop, which it did and is yet to recover amid the continued presence of the

pandemic.

The other regulatory issues fueling the impact of the Covid-19 pandemic on Hawaii’s

tourism and hospitality industry is the requirement of social distancing and the closure of social

amenities and avenues that people would come together in celebrations or for other activities.

According to Huang et al. (2020), such a regulatory measure has been mandated by the UN’s
 Hawaii’s Tourism and Hospitality Industry 4

preventive practices against the continued spread of the pandemic across the globe. Although

each country complying to such preventive solutions against the spread of the pandemic has been

affected differently which is seen through the infected rates and number of victims, Hawaii is

one of the countries practicing the proposed preventive measures. As a result, Hawaii is currently

facing one of the highest levels of unemployment emanating from its reliance on the tourism and

hospitality sector as one of the primary economic activities (Marks et al., 2020). Combined with

the heightened concerns by the public over travelling during the times of the pandemic, Hawaii’s

tourism economy has been tanked.

Policy Draft for Hawaii’s Tourism and Hospitality Industry

The objectives of Hawaii’s tourism and hospitality industry are structured around the

responsible and sustainable strategies for managing success. As such these objectives include;

honoring the native people and their heritage while perpetuating and valuing the natural

resources of the islands. On the other hand, Hawaii is also focused on supporting a sustainable

and vital economy by engendering mutual respect between the involved stakeholders while also

providing memorable, enriched, and unique visitor experience (Agrusa, Kim, and Wang, 2011).

According to Catherine (2017), some of the guiding principles adopted by the involved personnel

within Hawaii’s tourism and hospitality industry include; sustainability, responsibility,

accountability and quality. Another one of the guiding principles towards the achievement of

these objectives is collaboration whereby the local authorities emphasize on encouraging and

supporting the interaction and ongoing dialogue between the involved stakeholders. When it

comes to the involved stakeholders, the industry is characterized by the international hotel

operators, investors, local authorities, and consultants (Knox and Toy, 2015). Other involved

stakeholders include the; lawyers, architects, construction companies, tourists, local retailers,
 Hawaii’s Tourism and Hospitality Industry 5

tourism and hospitality professionals, as well as the white label management companies. With

such a vast array of stakeholders involved in Hawaii’s tourism and hospitality industry, it is

evident that the economy of the islands significantly relies on the same for the sustainability of

its people and its operation.

In this regard, it is imperative for Hawaii’s authorities to consider the adoption and

implementation of a policy draft in light of managing the crisis influenced by the outbreak of the

pandemic by focusing on capitalizing on its objectives as well as the involved stakeholders. The

proposed policy draft would be the involvement of the government in supporting the survival of

businesses along the value chain in the tourism and hospitality sector. Leung, et al. (2018) argue

that some of the approaches towards implementing such a policy include; the temporary

exemptions from social security contributions as well as Value Added Tax (VAT). The

government can also embrace on the use of credit lines for the Small and Medium-Sized

Enterprises (SMEs) while also providing subsidiaries for working capital as well as the payment

of wages (Gretzel, 2018). According to Ukeje et al. (2021), these SMEs can also apply for some

renovation works and construction through subsidies. Overall, the local authorities ought to

embark on lifting the financial burden from the registered business available within the tourism

industry.

Justification of the Recommended Policy Draft and its Significance

The recommended policy draft is critical to the survival of the Hawaiian tourism firms

and retail businesses. The approach should also focus on women since they are currently over-

represented in the tourism SMEs; they are bound to face greater barriers in their pursuit of

accessing financing. This means that their access to fiscal stimulus packages as well as loans and
 Hawaii’s Tourism and Hospitality Industry 6

public procurement have to be prioritized with the aim of addressing the recovery strategies

within the islands’ tourism and hospitality industry (Velas, 2016). In addition, these tourism

SMEs have to be supported digitally with the aim of facilitating interaction with the targeted

customers and also taking advantage of the e-commerce industry especially during the current

times of the pandemic that require social distancing. In support of this finding, Dredge, and

Gyimóthy (2017) argue that social media and booking platforms have transformed the business

model of the tourism industry whereby the tourist providers are in to interact directly with

potential customers.

Using big data, the involved stakeholders are also in a position to track consumer

behavior while also forecasting demand. Such a capability is vital in helping to understand the

changing market dynamics and the consumer needs depending on what can be provided for them

at a specific period. Finally, the digital platforms also provide augmented reality that creates a

platform for accessing fragile archeological sites while improving the marketing and branding

services of the tourism providers (Indriastuti, and Fuad, 2020). The use of virtual tours would

considerably improve the declining tourism and hospitality industry as it allows people to

explore without having to be physically present. The potential associated with thes technologies

help in providing a sophisticated and diverse touristic approach that would facilitate the

increased sustainability of the SMEs amid the technical and financial difficulties influenced by

the pandemic.
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References

Agrusa, J., Kim, S.S. and Wang, K.C., 2011. Mainland Chinese tourists to Hawaii: Their

characteristics and preferences. Journal of Travel & Tourism Marketing, 28(3), pp.261-

278.

Catherine, E., 2017. Stakeholder Collaboration Strategies in the Hawaii Tourism

Industry (Doctoral dissertation, Walden University).

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Dredge, D. and Gyimóthy, S. eds., 2017. Collaborative economy and tourism: Perspectives,

politics, policies and prospects. Springer.

Gretzel, U., 2018. From smart destinations to smart tourism regions. Investigaciones Regionales,

(42), pp.171-184.

Huang, A., Makridis, C., Baker, M., Medeiros, M. and Guo, Z., 2020. Understanding the impact

of COVID-19 intervention policies on the hospitality labor market. International Journal

of Hospitality Management, 91, p.102660.

Indriastuti, M. and Fuad, K., 2020, July. Impact of covid-19 on digital transformation and

sustainability in small and medium enterprises (smes): A conceptual framework.

In Conference on Complex, Intelligent, and Software Intensive Systems (pp. 471-476).

Springer, Cham.

Knox, J. and Toy, J. (2015). Hawaii tourism strategic plan. Retrieved from:

https://onstrategyhq.com/free-plans/government/state-tourism/hawaii-tourism.pdf

Leung, Y.F., Spenceley, A., Hvenegaard, G. and Buckley, R., 2018. Tourism and visitor

management in protected areas: Guidelines for sustainability. Gland: IUCN.

Marks, M., Zirkle, D., Shanks, M. and Moran, E., 2020. Teaching Macroeconomics Using the

Coronavirus Pandemic Example in the High School Classroom. Journal of Economics

Teaching, 5(2), pp.44-63.

Mulder, N., 2020. The impact of the COVID-19 pandemic on the tourism sector in Latin

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Retrieved from:

https://www.cepal.org/sites/default/files/publication/files/46502/S2000751_en.pdf
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Rosewicz, B. and Maciag, M. 2020. Pandemic-driven declines in tourism takes toll on many

state’s revenues. PEW. Retrieved from: https://www.pewtrusts.org/en/research-and-

analysis/articles/2020/10/14/pandemic-driven-declines-in-tourism-take-toll-on-many-

states-revenues

Studdert, D.M., Hall, M.A. and Mello, M.M., 2020. Partitioning the curve—Interstate travel

restrictions during the COVID-19 pandemic. New England Journal of Medicine, 383(13),

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Ukeje, U.E., Lasisi, T.T., Eluwole, K.K., Titov, E. and Ozturen, A., 2021. Organizational level

antecedents of value co-destruction in hospitality industry: An investigation of the

moderating role of employee attribution. Current Issues in Tourism, 24(6), pp.842-856.

Yerton, S. and Hofschneider, A. 2020. Hawaii’s biggest industry is reeling as the coronavirus

spreads. Honolulu Civil Belt. Retrieved from: https://www.civilbeat.org/2020/03/hawaiis-

biggest-industry-is-reeling-as-coronavirus-spreads/

Vellas, F., 2016. The international marketing of travel and tourism: A strategic approach.

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