Tovin Lapan
Tovin Lapan

In a report published by the University of Hawaii on April 3, two researchers take a stab at charting Hawaii's next steps after the pandemic shutdown, including what needs to happen for tourism to flourish once again. 

The report published by the University of Hawaii Economic Research Organization (UHERO),  "How to Control Hawaii's Coronavirus Epidemic and Bring Back the Economy: The Next Steps," outlines benchmarks for returning to normal economic activity while protecting public health. The authors, University of Hawaii economics professor emeritus Sumner LaCroix and East-West Center senior fellow Tim Brown, suggest it could be a year or longer before Hawaii is fully open for business again but allow that the economy could bounce back sooner if certain criteria are realized.

The study examines the measures the state has implemented to contain the spread of Covid-19, including stay-at-home orders and travel restrictions, and how both Hawaii's nontourism sector and tourism industry can return.

The authors note that Hawaii, among all 50 states, has some unique advantages in arresting the spread of the virus, namely "our geographic isolation (2,300 miles to the U.S. West Coast), our small population (1.4 million people) and the very small numbers of governments (four counties and one state government) in the state."

"These circumstances reduce the costs and raise the benefits to close coordination between governments, private organizations, individuals and households to both control the epidemic and to minimize economic damage," the study says. 

In normal times, Hawaii welcomes roughly 30,000 people (both residents and visitors) by air daily. That number has fallen precipitously since the containment measures went into effect, but roughly 100 visitors are still showing up in the Aloha State each day. 

But "even this level of arrivals places additional burden on public health officials and resources in the state and counties," the study says, noting Honolulu Mayor Caldwell has asked President Donald Trump to prohibit all nonessential travel to Hawaii.

More resources may need to be dedicated to monitoring those subject to quarantine, including electronic ankle bracelets or location-monitoring apps, and for contact tracing, the report finds. 

"Publicizing Hawaii's 14-day quarantines in locations continuing to send tourists to Hawaii is an option if significant tourism flows continue," the authors write. "Another option to further restrict discretionary travel is for the state to request that airlines and travel booking agencies and websites inform all potential travelers about the state and interisland quarantines prior to travelers booking their itineraries." 

Next, according to the study, to further containment and inch closer to restarting shuttered businesses, the state must establish facilities where exposed people can be cared for in isolation, with potential candidates including hotels in tourist districts and neighborhoods or vacant military housing, such as Kilauea Military Camp. 

Once the state has a handle on the pandemic, which means a sustained reduction in the number of new cases for at least 14 days, a drop in demand on hospital services and emergency services, and more robust testing and monitoring systems, then the restrictions can be lifted.

On the optimistic side of the spectrum, analysts from UHERO believe there is an opportunity for Hawaii to capitalize and restart tourism relatively quickly if it is "perceived as a safe place" and the public health measures are effective, Carl Bonham, UHERO's executive director, told the Hawaii House Select Committee on Covid-19 at an April 6 meeting.

"Hawaii could be the premier destination for U.S. travelers over the next year," he said.

The report said the state would need to demonstrate an effective system for testing visitors with flexibility and high capacity, including using antibody tests that can show if a person has previously contracted the virus, and rapid-result diagnostic tests.

"Clearly testing in the future is the answer for us to restart the economy much, much quicker," Gov. David Ige said April 6 at a news conference. "But those tests have to be proven to be accurate and reliable.

The researchers also posit that the nontourism industries will recommence earlier than the visitor-affiliated businesses. To begin, stay-at-home orders will ease and a wider range of businesses will resume operations.

While the report notes that a  "pessimistic forecast" for restarting significant tourism from overseas is 12 to 18 months, the time likely to be required for vaccine testing, production and widespread vaccination of the Hawaii population to occur, a more optimistic view has tourism resuming more quickly if two conditions are met: First, potential tourists perceive Hawaii to be a safe place to visit; and Hawaii residents can be assured tourists are free of the coronavirus.

"The first condition could be satisfied sometime this summer if Hawaii builds on its already considerable achievements by moving ahead with the testing, contact tracing, isolation and mask policies recommended in this report," the authors write. "The second condition could also be satisfied this summer if rapid antigen and antibody tests become readily available to people wanting to vacation in Hawaii."

UHERO identifies several hurdles to clear to realize the optimistic scenario, many of which are outside the control of state officials, including tourist sentiment, progress on a Covid-19 vaccine and antigen test, and initial resistance to long-haul flying as shelter-at-home orders ease.

"In this intermediate scenario, we could see only a limited resumption of tourism until U.S. and foreign populations are vaccinated," the report states. "Finally, Japanese tourism has typically restarted very slowly after other political and economic crises. A slow return of Japanese and other foreign tourists would weigh heavily on Hawaii's tourism-oriented businesses, as these tourists tend to spend more than U.S. tourists."

The tourism industry is the state's single largest private employer, and UHERO estimates the total number of jobs during the first quarter of 2020 to be about 140,000 lower than the same period in 2019.

"And a big chunk of those losses are expected to come from shuttered and empty hotels and restaurants that have been reduced to serving takeout only, if they're open at all," the report says.

Businesses that rely on in-person interactions, such as meeting and convention spaces, bars, and restaurants, will have to adapt, the researchers argue, and the increased demands to protect employee and customer health could cut into profit margins. But they also suggest there could be a positive outcome from the pandemic

"In the longer run," the UHERO researchers predict, "the changed circumstances of firms, customers and workers will encourage waves of innovation that will place the economy and society onto paths unknowable today."

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