Shuttered since last March when statewide Covid-19 restrictions went into effect, Hawaii vacation rental owners and operators are adapting their operations as they await word on when they will be able to welcome guests again.
While hotels were allowed to remain open as essential businesses, and many signed up for a program to house medical professionals and other frontline workers during the pandemic, short-term rentals were not deemed essential. On April 7, City and County of Honolulu mayor Kirk Caldwell announced short-term rentals (lodging for less than 30 days, other than hotels and motels) were deemed nonessential businesses during the pandemic emergency and may not operate, and other county mayors soon followed suit. Compared to hotels, vacation rentals were seen as a greater risk by public officials, who said they are harder to monitor and could contribute to scattered outbreaks.
As pandemic restrictions were spreading across the U.S. in March, some vacation rentals in Hawaii advertised themselves as a good place to ride out the stay-at-home orders, drawing the ire of elected officials and residents.
"We have seen some alarming data points. Most recent data on incoming flights are showing a slight rise in visitor numbers," Kauai mayor Derek Kawakami said in a video address on May 3, when he expanded an emergency proclamation to prohibit short-term rentals from all activity, including advertising. "Further, some vacation rentals are still actively advertising, including promoting themselves as Covid-19 retreats for people from the mainland. This is wrong. It is dangerous for our community, and it cannot continue."
Gov. David Ige has announced the mandatory 14-day quarantine for interisland travel will be lifted June 16, but the quarantine for all out-of-state arrivals will remain in effect at least through July 31. The governor has not detailed a schedule for reopening to trans-Pacific travelers, and has not addressed whether short-term rentals will be able to operate prior to lifting the quarantine. Those in the vacation rental industry are asking to restart to serve interisland travel and essential workers while also keeping business afloat and employees on the payroll.
As with everything linked to Hawaii's tourism industry, vacation rentals have taken a big economic hit during the pandemic. Munro Murdock, Realtor and founder of Love Hawaii Realty, a management company for a portfolio of roughly 50 properties, said in any given year he expects five to 10 cancellations, but they had more than 150 cancellations as the pandemic shutdown was imposed.
Murdock was forced to lay off or furlough more than a dozen employees, then hired them back to conduct deep cleanings of the properties after securing a Paycheck Protection Program loan. With the federal aid set to end on June 15, he has told his staff he will have to let them go again until something changes.
Murdock, who notes all of his units are legal and licensed, says he is notifying clients of the quarantine and does not want to bring guests in during the tourism shutdown, but feels as other industries start to reopen, vacation rentals should be able to operate, as well. Since late May, restaurants, retail stores and other businesses have gradually resumed operations with various social distancing provisions.
"Hotels have been deemed essential, and as our fellow small-business owners like restaurants and retail reopen, we can't help but ask why it is that vacation rentals haven't been allowed to operate," Murdock said. "With interisland travel starting again June 16, why not allow those in-state travelers to book alternative legal accommodations, instead of staying with friends and family or a hotel? ... We are discouraging travel from out of state, but we can't even rent to doctors, nurses, contractors, military and other essential, frontline workers."
Short-term rentals have been key to absorbing much of the growth in Hawaii visitor numbers in the previous decade. From 2015 to 2018, the number of hotel units in Hawaii increased by 1%, to 43,857, as the number of condominium hotel units and bed and breakfast rooms have both declined. Meanwhile, the number of officially recorded vacation rental units doubled from 2009 to 2018 to more than 13,000, with the total number of licensed and unlicensed units likely much higher.
State officials have yet to unveil a detailed calendar and plan for reopening to out-of-state visitors, leaving Murdock scrambling to keep clients informed of the latest news while also staying prepared to take guests when Ige lifts the quarantine order.
"It's a tricky balance to manage bookings for anyone in the travel industry right now, but it's really difficult for us since we still do not have a legitimate reopening date," Murdock said. "We've been promoting the concept: 'Dream now, stay later, book today.' Booking windows are many months out, and we are getting very limited information from the government. If I had to predict, it will be mid to late July, or even August, before Hawaii opens up to out-of-state visitors again."
Motivated by the swift shift in travel patterns and new emerging consumer habits, Murdock recently surveyed previous guests on their post-pandemic views. The results showed 42% of respondents, if regulations allow, would feel comfortable returning to Hawaii in the next six months. Another 33% thought they would be comfortable traveling to the Aloha State within a year.
"I was really happy to see more than 40% willing to come in one to six months if things opened up. I think that's a really positive takeaway," Murdock said. "There's a good chunk of people willing to come, but I think air travel is still a big concern."
Murdock also used the survey to determine what steps guests most wanted the management company to take to ease their worries. Flexible cancellation policies, enhanced cleaning and sanitization procedures, and open, regular communication were the most in-demand policies.
"A lot of people are spending time keeping up with their local news and regulations, so we've found they wanted help staying informed and up to date on what's happening here," he said.
After reviewing the survey, Murdock communicated with his database of clients about the steps Love Hawaii Realty was taking, including a no-fee cancellation policy for the rest of 2020 up to 14 days prior to the reservation start date, and extra cleaning procedures including disinfecting surfaces and use of electrostatic sprayers. Additionally, each rental will have a one-night, 24-hour vacancy between every reservation. Immediately, they saw a spike in bookings, Murdock said.
"As soon as we got that information out, we saw a huge uptick in bookings," Murdock said. "That showed me that people will book once they see we've done what they are looking for and we communicate how we're addressing the issues."