Big Island Businesses Seek Survival Solutions as Pre-Travel Testing Delayed
Hawai‘i’s mandatory 14-day quarantine period will remain rigidly in place through the end of August, leaving Big Island businesses reliant on tourism scrambling for strategies to survive.
While a recent poll conducted by the University of Hawai‘i Public Policy Center indicates that 80% of state residents prefer sidelining tourism in the name of public health, a significant sector of the business community now must navigate what it regards as potentially a proverbial death sentence.
The implementation of a pre-travel testing program originally scheduled for next month would have allowed visitors to earn a quarantine exemption by producing a certified negative COVID-19 test within 72 hours of travel. The governor suspended the start of that program until at least Sept. 1 on Monday, citing surging cases of COVID-19 on the mainland, more new cases in Hawai‘i, and a shortage of testing capacity due to mainland surges depleting the state’s stores of testing materials.
“I was really disappointed,” said Mendy Dant, owner of Fair Wind Cruises, which operates out of Keauhou Bay. “We had put Aug. 1 as our opening day for our biggest vessel. Hotels had Aug. 1 as the first day they were taking reservations. We were trying to be ready for that and hopefully have one month of the summer. We lost spring break and now we’ve totally lost our summer season.”
“It’s really shaky that there’s going to be a way to survive this or recover.”
Fair Wind has plenty of company amid the uncertainty. Wendy Laros, executive director of the Kona-Kohala Chamber of Commerce, said around 30% of the chamber’s nearly 500-member coalition is directly reliant on tourists as their primary consumer base.
“We definitely have struggling members right now,” she said.
Federal aid by way of CARES Act loan programs was robust at the outset of the pandemic and helped businesses survive by way of initiatives like the Paycheck Protection Program (PPP), which allowed companies to avoid layoffs through wage support.
Almost all chamber businesses that needed PPP assistance received it but guidelines on how to spend the funding, and mid-program alterations to those guidelines, have left operations like Fair Wind in limbo.
Dant said the Achilles’ heel of PPP loans was that the federal government initially stipulated the funding must be spent within eight weeks, a directive that proved to vastly underestimate the legs under the COVID-19 pandemic in the United States.
By the seventh week, the government realized its mistake, but it was too late. Nearly all the funding businesses like Fair Wind received had been spent. There was no longer a way to stretch it and create a bridge to either the reopening of Hawai‘i’s economy or another federal aid package.
“That strategy would have worked at the beginning … to keep the business going,” Dant said.
Thus, several Big Island outfits have endured three to four weeks trying to keep businesses afloat since spending the last of their PPP loans. Some were able to secure economic injury disaster loans (EIDL) from the Small Business Association, but the totals received were in many cases less than 10% of what companies thought they may be able to procure.
“The SBA EIDL loan was advertised to be $2 million,” Dant explained. “By the time it got to Hawai‘i, it was only $150,000. There’s a big difference. That’s barely anything. We have our rent; boat insurance that you still have to pay for; expenses and taxes that don’t stop.”
Dant said she’s on the precipice of seeking out separate loans to keep Fair Wind’s fleet afloat into its 44th year of operations, during which it has survived all manner of tragedies including tsunamis, hurricanes, and economic downturns.
And the looming economic catastrophe doesn’t end with businesses shutting down. It starts there.
Come the end of July, federal plus-up payments of $600 to those on unemployment insurance (for which there have been nearly 250,000 claims filed in Hawai‘i since March 1) dry up. That will coincide with Gov. Ige’s month-long extension of the travel quarantine, impacting businesses that will have gone without PPP funding for up to six weeks by that time.
More employees will be furloughed and the amount of personal aid they’ll receive via unemployment will dip drastically.
“A lot of people won’t have health coverage anymore,” Dant said. “It’s going to get pretty sad.”
Laros said there is some light at the end of the tunnel, however. At a meeting of Hawai‘i’s House Select Committee on COVID-19, of which Laros is a member, US Representative Ed Case discussed the possibility of another federal stimulus package that could be realized as early as this month.
The Democrat-led US House of Representatives passed the HEROES Act in May, but the Republican-held Senate has balked at many of the stipulations. Analysts believe both sides of the aisle are incentivized to provide further aid to American businesses and families, with President Donald Trump saying expressly in recent weeks that he will sign another aid bill into law. However, it’s unclear precisely what the next stimulus package will look like.
The HEROES Act proposes continuing plus-up funding of $600 weekly, as well as a stimulus check that would afford eligible families up to $6,000 in direct aid. Senate Majority Leader Mitch McConnell has already voiced his disapproval of continuing plus-up funding, calling it an incentive not to return to work, as some Americans have actually earned more in unemployment benefits than they did from their previously held jobs.
Whatever package is passed, it’s likely that small businesses will be a target for a substantial portion of the aid.
“All that could be coming together before the end of July,” Laros said after listening to Case’s updates. “If that’s the case, there’d be another form of assistance.”
Dant was not as optimistic, saying she won’t feel comfortable until government officials in Hawai‘i expand their concept of public health beyond COVID-19, who has it, and who doesn’t.
“I don’t think that it’s as simple as public health over the economy,” she said. “A lot of our health is also about being able to not stress over paying our bills and possibly being homeless. Also, there’s a lot of domestic abuse going on. It’s not just the COVID-19 virus that is part of our health. It’s a bigger picture.”
Laros stressed taking individual and community ownership over protecting one another as a way to contribute to the most literal definitions of public health, which would in turn cascade to the more abstract and indirect interpretations that include a healthy economy and job market in Hawai‘i.
“It’s just so important for people of this state to understand their part in it,” Laros said. “It’s really important to continue to adhere to the mask-wearing, the handwashing, the physical distancing, and refrain from the large gatherings. Spikes are coming from those kinds of behaviors.
“We keep looking to government to manage the situation when I think it’s important for individual members of the community to take responsibility.”
Officials from the Island of Hawai‘i Visitors Bureau were unable to comment on this story due to direction from the Hawai‘i Tourism Authority, which is a state agency under the direction of the Ige administration.
The agency line on COVID-19 and the reopening of Hawai‘i’s tourism economy on a large scale has been that the HTA is eager to restart business in the state but wants to do so under the safest conditions possible while avoiding “the need to backtrack in the future.”