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Here’s Why It’s So Hard To Reshape Hawaii’s Tourism Industry

As recently as early 2020, before COVID-19 wrecked the state’s economy, Hawaii was grappling with a problem much different from today’s economic challenges. The question then was what to do about ever-growing hordes of tourists.

The 250,000 visitors in Hawaii each day equaled nearly a fifth of the state’s population. And residents’ attitudes toward them were plummeting, as visitors took over beaches, hiking trails and homes in neighborhoods that had become meccas for vacation rentals.

Then the virus struck. Tourism shut down under orders from Gov. David Ige. And resident sentiment toward the industry only worsened.

By late 2020, 57% of residents who responded to  a Hawaii Tourism Authority survey in September and October completely or strongly agreed that Hawaii was too dependent on tourism, up from 37% in 2019. Almost a third completely or strongly disagreed that their “island is run for tourists at expense of local people.”

Hawaii Sen. Glenn Wakai echoed others calling for change recently when he expressed frustration about the Hawaii Tourism Authority’s inability to get much traction remaking tourism in the islands during the shutdown.

“We wasted a year,” said Wakai, who heads the Senate Energy, Economic Development and Tourism Committee. “They only have vague generalities. They did nothing to reimagine tourism.”

The tourism authority’s president and chief executive, John DeFries, said the agency has made strides in planning to reshape tourism. He pointed, for example, to a series of destination management plans the agency has crafted , with public input, for Maui, Kauai and the Big Island. A report for Oahu is expected to be finished this summer, he said.

Regardless of what eventually comes from HTA’s work, one thing is hard to dispute — if reshaping tourism is a challenge, doing so during a pandemic is especially hard. One reason policymakers don’t want to make changes that may jeopardize the industry’s recovery: Hawaii needs jobs.

“If you don’t want visitors to come back, it’s the same as not wanting your neighbor to have a job,” said Carl Bonham, executive director of the University of Hawaii Economic Research Organization.

Even if it were possible to reimagine tourism, Bonham said, now isn’t the time.

“The whole idea that you could somehow or other, over the course of less than a year, live with an economy with 20 or 30% fewer visitors and have the same number of jobs was never realistic,” Bonham said. “In the short term, and that could be two or three years, it’s all about tourism in terms of getting people back to work.”

Agreements With Vacation Platforms Gather Dust

But even where jobs aren’t an issue, change hasn’t happened.

In some cases, dealing with the pandemic has simply consumed the attention of government officials and business executives to a point that other initiatives have languished. A stalled effort to crack down on unpermitted vacation rentals is a case in point.

Few tourism reforms should have been easier to implement during the pandemic, especially for Honolulu. The issue has support from a rare coalition that includes hotel executives, labor unions, housing advocates and neighborhood groups united against the vacation rentals.

However, property owners and investors see vacation rentals as a way for average folks and small investors to make money from Hawaii’s tourism industry and want more to be legalized.

Critics say illegal vacation rentals bring unwanted tourists into residential neighborhoods, take away housing for residents, and undermine governmental attempts to limit the number of tourists through land-use restrictions. Even tourism executives who benefitted from the recent explosion of tourists from about 8 million annually to more than 10 million in 2019 have said the boom was made possible by the proliferation of illegal vacation rentals .

In November, after years of sometimes acrimonious debate, Honolulu forged agreements with the major vacation rental platforms, Airbnb and VRBO owner Expedia. The agreements require property owners to include property locations on property listings , which would allow officials to determine whether a property was operating legally.

But Honolulu’s city government still hasn’t adopted administrative rules and other steps needed to put the agreement into effect, said Curtis Lum, a spokesman for Honolulu’s Department of Planning and Permitting.

Honolulu also has postponed any action at least until August, he said, which means an expected surge in summer travelers will likely be able to come back into the residential neighborhoods.

Kekoa McClellan, Hawaii spokesman for the American Hotel and Lodging Association, acknowledged that during the early days of the pandemic, the industry shifted its attention away from the short-term rental issue to creating safety policies and procedures for hotels. In that context, he said, it’s understandable that Mayor Rick Blangiardi’s administration also pivoted to dealing with the pandemic and deferred implementing the Airbnb agreement.

“I think they’re committed to it,” he said. “But everybody has only so much bandwith.”

Blangiardi’s office did not respond to an interview request.

Still other efforts are hindered by a lack of common ground and implementation challenges. Consider a proposal to reserve some recreation areas for residents on weekends. The idea has the support of DeFries, Ige and Mike McCartney, director of the Hawaii Department of Business, Economic Development and Tourism. All three discussed the idea last week on the Honolulu Star-Advertiser’s “Spotlight” program.

But implementing such a policy is another issue. Dan Dennison, a spokesman for the Department of Land and Natural Resources, said in an email that the agency has not begun developing such a policy.

Laura Thielen, a former DLNR chair who is now director of the Honolulu Department of Parks and Recreation, said it would be nearly impossible to keep people out of most recreation areas. For instance, she said, even trails with seemingly limited access at trailheads can often be reached from other approaches.

Exceptions could be places like the state’s Diamond Head Monument and Hanauma Bay, which is co-managed by the state and city and county.

But she said such a major change should go to the City Council and involve ample opportunities for public testimony. And it’s almost certain that tourism executives would come out against locals-only parks, beaches and trails, even for a day or two per week.

“I have concerns about that kind of policy: a locals-only policy,” said Mufi Hannemann, a former Honolulu mayor who is now president and chief executive of the Hawaii Lodging and Tourism Association.

If the reef in a place like Hanauma Bay needs a break from the crush of visitors, a solution would be to close it to everyone, he said. “Just to give a blanket, locals-only policy: I don’t think that sends the right message.”

Political Process Often Favors Inaction

The political process is also a major obstacle to overhauling tourism since it often favors the status quo. Even modest changes with powerful political support have trouble.

One of Hawaii’s most powerful lawmakers promoted  a bill that would have imposed a so-called “green fee” on travelers to offset the environmental impacts of tourism. While destinations like Palau and Bhutan charge such fees , Hawaii doesn’t.

Sen. Donovan Dela Cruz, chair of the Senate Ways and Means Committee, sought to change that. His proposed $20 per person fee – arguably modest compared to Palau’s $100 fee – would fund conservation jobs to manage Hawaii’s natural resources.

The measure sailed through the Senate but stalled in the House without a hearing , following  opposition from business and tourism organizations . The bill is technically still alive and could be picked up again during the 2022 legislative session.

Jack Kittinger, who runs the Hawaii office of the nonprofit Conservation International, has extensively studied ways to cover the cost of conservation efforts in Hawaii .

Kittinger said travelers have shown a willingness to pay for a COVID-19 test to come to Hawaii, as required by Hawaii’s Safe Travels program. This, he said, shows visitors would be willing to pay a smaller fee.

“You want a willingness-to-pay study?” he said. “You’ve got it. It exists.”

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