Modest Expectations From Visitor Industry On Traveler Testing Program

Oct 16, 2020

Major players in Hawaii’s air travel and lodging industries are taking a wait-and-see approach when it comes to the state’s new travel testing program.

For the past 7 months, the terminals of Hawaii’s largest airport have been largely empty. Daily passenger arrivals remain below 10% of last year’s levels. Many shops in restaurants inside the terminal have closed.

The tourism torrent that brought 10 million visitors to the islands in 2019 slowed to a trickle with the global spread of COVID-19. In August, a total of 22,344 visitors came to Hawaii, according to data from the Hawaii Tourism Authority. That is fewer than arrived on an average day during the same time last year.

Months without significant tourist spending has crippled the local economy. At 12.5%, Hawaii has some of the highest unemployment in the nation.  

Overall economic activity has also cratered. Hawaii was tied with Nevada for the largest decline in state GDP, which dropped by a stunning 44% annualized rate in the second quarter of 2020, according to recent quarterly data from the federal Bureau of Economic Analysis.

For months, business groups, economists, and some elected officials have said that a long-term recovery will not be possible without the resumption of tourism.

Their solution to the public health problem posed by welcoming large numbers of potentially-sick travelers has been to develop a  pre-travel testing program, inspired by such rules rolled out by the state of Alaska, that would allow visitors and returning residents to bypass the current 14-day quarantine required for all out-of-state arrivals.

Relaxing the quarantine for negative travelers is viewed as an important step in reversing that downward economic trend, but major players in Hawaii’s economy are still taking a cautious approach.

“I don’t know that on October 15th we’ll hit an inflection point after which everything will be better,” said Avi Mannis, senior vice president for marketing at Hawaiian Airlines, Hawaii’s largest air carrier.

Hawaiian has been losing roughly $3 million per day during the pandemic and was recently forced to cut more than 30 percent of its staff. That is hardly unique in the airline industry.

American and United Airlines recently announced they would furlough more than 30,000 staff following the failure of Congress to approve another round of rescue funding. Delta Airlines was losing as much as $27 million per day this summer.

Despite uncertainty over what results the testing program will produce, Hawaiian is embracing the new travel policy. The airline is offering passengers options to get a COVID test before flying, both in person at a lab or with an at-home kit.

The options vary by city, so passengers flying with Hawaiian will have to assess their choices and plan ahead before going to the airport.

“You’ll book your ticket and as you get closer to your travel, we’ll present you with all of the options that we have available,” Mannis explained. Those options will come via email.

Airlines offering tests serve two purposes: travelers will be able to bypass mandatory quarantines for destinations like Hawaii and Alaska, but more testing may also reduce public concerns about the safety of getting on an airplane.

Hawaiian and other airlines have maintained that health measures like air filtration, masking requirements, and post-flight sanitizing make the risk of transmission on a flight low.

Ultimately, consumers will be the ones who determine the success of the travel testing program. Mannis expects that some will embrace it, while others will opt for caution.

“I think there’s a segment of the population that will be ready to go, [and] there’s a segment of the population that may chose not to travel for some time,” he speculated.

Testing travelers alone likely won't provide a silver bullet to Hawaii’s economic woes. Pre-flight testing, combined with newly installed thermal screening cameras at state airports, could catch between 80 and 90% of infected passengers.

That means Hawaii will need to maintain strong internal public health measures to minimize the spread of the virus locally. Another spike in cases would likely keep travel depressed, with prospective travelers opting for other destinations.

That is the view of Hawaii’s hotel operators, who are also not expecting an immediate return to boom times with the relaxing of quarantine rules.

Mufi Hannemann, former Honolulu mayor, 2020 candidate for mayor, and current president of the Hawaii Lodging and Tourism Association, stressed that the state’s hotels are predicting only a modest short-term increase in visitor arrivals.

“It’s not going to be hordes of visitors coming here overnight. It’s just not going to happen,” Hannemann said in a phone interview.

He noted that around 200 hotels, or roughly 50 percent of HLTA members, were open in the weeks preceding October 15th. Hannemann expects that number will gradually increase in November and December, as the important end-of-year holiday season approaches.

But the former mayor, who briefly returned to politics this summer on a platform to resume tourism, cautions that any reopening will be highly dependent on the number of visitor arrivals and new cases over the next few weeks.

“I think October, and how we handle October going into November, is going to be critical in determining what kind of holiday season we’re going to have here,” Hannemann predicted.

The stakes are high. Officially, some 80,000 Hawaii workers are currently out of a job, many in tourism-dependent industries like lodging, food service, and travel.

However, the true number may be higher. The state Department of Labor and Industrial Relations reported more than 110,000 unemployment claims were filed in the first week of October.

Adding to the economic pain, the federal benefits that sustained many of those workers and poured billions of dollars into Hawaii’s economy have long since run out.

That has put tremendous pressure on state officials to move forward with reopening tourism, a move that was delayed several times due to a mid-summer spike in cases.

Public health experts advising the state have also embraced calls to restart economic activity and are warning that the public will have to learn to live with COVID.

One aspect of that is accepting some level of virus in the community, says Ray Vara, president and CEO of Hawaii Pacific Health, which operates several hospitals on Oahu and Kaua’i.

“Our baseline is no longer at zero,” Vara stated at a recent meeting of the state House of Representatives Select Committee on COVID-19.

“If we’re going to have activity around our various communities, we are going to see some level of [virus] activity,” he added, noting that the state needs to be prepared to respond to new cases and keep the virus under control.

At the same meeting, Mark Mugiishi, a medical doctor who heads Hawaii’s largest health insurer HMSA, noted that the 100 or so daily new cases currently reported may be as low as Hawaii gets.

“We were in a four-week total shutdown at the county level and that got us down to around 100 [new cases per day],” Mugiishi noted.

“So I think we have to be honest with ourselves that that could be our new baseline. We’re not going to  have conditions that are more restrictive than a total shutdown.”

What that means for the future is unclear. Many local businesses, and their workers, likely will not be able to weather another protracted lockdown without substantial federal support.

Officials are reminding constituents that previous surges were driven by local residents returning from travel or not following social distancing guidelines.

They continue to urge the wearing of masks and avoiding large crowds as critical measures in mitigating potential outbreaks.