Chamber, UHERO Survey Projects Grim Business Outlook
A recent survey indicates COVID-19 will shutter more local businesses than previously thought, as the return of tourism to Hawai‘i is likely to be delayed again.
In a survey conducted by the Hawai‘i Chamber of Commerce and the University of Hawai‘i Economic Research Organization (UHERO), which was released late last week, nearly one out of five businesses questioned said they don’t expect to survive the coronavirus pandemic. The data is according to a press release from the Chamber.
The follow-up survey, which connects data from another set of questions asked in April, showed the number of businesses expecting to close jumped from 6% to 17% in the four months in between.
“The topline findings are troubling, there is no sign yet of significant recovery, and depending on when the pandemic is brought under control and when the tourist economy can safely reopen, the survey suggests that businesses will need significant support if they are to weather this crisis,” UHERO Executive Director Carl Bonham said.
The survey of 464 Hawai‘i businesses found that nearly 20% reported having no revenue at all and another 20% reported earnings of less than half of their baseline monthly revenue in July.
These numbers are slightly improved since the previous survey when over 30% of businesses reported no revenue, but point to only a modest stabilizing effect on the local economy and are consistent with other UHERO data on small business revenue, the release said.
“This latest UHERO analysis further validates that local businesses are still in dire straits, despite the federal assistance many of them received,” Sherry Menor-McNamara, President & CEO, Chamber of Commerce Hawai‘i said. “The dramatic increase in the percentage of businesses reporting they will not survive this pandemic is alarming, but not surprising. Many of our businesses have not reached the stabilization phase, much less, the recovery phase, and will remain in this precarious state until travel reopens.”
Other highlights of the survey included the following:
- Businesses had reduced their staff by 28% of full-time jobs and 35% of part-time jobs between January and April 2020. Since then, there has been only a slight recovery in each category (2% and 6%, respectively).
- A total of 75% of businesses needed to make staff cuts and other reductions, and roughly a third anticipate deeper cuts in the months to come.
- With the last survey, the lowest paying full-time jobs (those paying less than $30,000 annually) were more protected than those of middle-income workers earning between $30,000 and $100,000 per year. However, since then, nearly all of the job losses have been among the lowest salary jobs, which dropped an additional 16% between April and July.
- As it was with the first survey, industries with the highest percentage of revenue from tourists have been impacted the most.
- With their strong reliance on tourism, businesses on the neighbor islands remain more economically depressed than businesses on O‘ahu, with Maui County the most adversely affected.
- Over 70% of the businesses responding had received a Paycheck Protection Program (PPP) loan, with little variation between counties. Kaua‘i has the fewest at 65% and Hawai‘i had the most at 77%.
PPP and other loans helped businesses retain or rehire 60,000 part-time and 165,000 full-time employees.
- Only 10-15% of businesses reported that their enterprise was not impacted in any way by COVID-19.
- If tourism had opened on Aug. 1, then 46% of businesses stated that no additional cuts would be needed, dropping to 30% if the quarantine remains in place until Oct. 1.
- The opening of the kama‘aina economy seems to have halted the decline in food services, retail, and real estate, although there is no sign yet of significant recovery.