With the delay in tourism opening, the number of businesses statewide who reported they would not survive the COVID-19 crisis rose from six to seventeen percent, a 183 percent increase. A follow-up survey conducted by University of Hawaii Economic Research Organization (UHERO) and the Chamber of Commerce Hawaii, in partnership with other industry organizations, identifies the impacts of COVID-19 on businesses, employment, revenue and plans for when trans-Pacific tourism opens, since its last survey in April 2020.
The survey of 464 Hawaii businesses found that nearly 20 percent reported having no revenue at all and another 20 percent reported earnings less than half of their baseline monthly revenue in July. These numbers are slightly improved since the previous survey, when over 30 percent of businesses reported no revenue, but points to only a modest stabilizing effect on the local economy and is consistent with other UHERO data on small business revenue.
“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 Hawaii 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. We have been calling for significant state and county support for businesses, and it’s become even more evident that this support is critical.”
“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 re-open, the survey suggests that businesses will need significant support if they are to weather this crisis,” UHERO Executive Director Carl Bonham said.
Other highlights of the survey include:
- Businesses had reduced their staff by 28 percent of full-time jobs and 35 percent of part-time jobs between January and April 2020. Since then, there has been only a slight recovery in each category (two percent and six percent, respectively).
- 75 percent 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 percent between April and July.
- As it was with the first survey, industries with the highest percent of revenue from tourists have been impacted the most.
Accommodations (96 percent tourism revenue)
Arts and Entertainment (83 percent tourism revenue)
Food Services (47 percent tourism revenue)
Retail Trade (54 percent tourism revenue)
- With their strong reliance on tourism, businesses on the neighbor islands remain more economically depressed than businesses on Oahu, with Maui County the most adversely affected.
- Over 70 percent of the businesses responding had received a Paycheck Protection Program (PPP) loan, with little variation between counties. Kauai has the fewest at 65 percent and Hawaii had the most at 77 percent.
- PPP and other loans helped businesses retain or rehire 60,000 part-time and 165,000 full-time employees.
- 10-15 percent of businesses reported that their enterprise was not impacted in any way by COVID-19.
- If tourism had opened on August 1, 46 percent of businesses stated that no additional cuts would be needed, dropping to 30 percent if the quarantine remains in place until October 1.
- On a positive note, the opening of the kamaaina economy seems to have halted the decline in food services, retail and real estate, although there is no sign yet of significant recovery.
Other participating industry associations include the Kauai Chamber of Commerce, Kona-Kohala Chamber of Commerce, Hawaii Island Chamber of Commerce, Maui Chamber of Commerce, Japanese Chamber of Commerce Honolulu, Hawaii Farm Bureau, Hawaii Restaurant Association and Retail Merchants of Hawaii.