On the Mainland, we tend to think of Hawaii as an expensive destination suitable for a short vacation of a week or two. The state’s fourteen-day quarantine rule seeks to discourage just such tourism. And it has. Very few would come to Hawaii for two weeks of quarantine followed by a week or two of vacation. As a result, the island is all but free of its traditional tourists.
Notwithstanding, there is another market ready for the taking: covid exiles. For example, 420,000 New Yorkers have left the city for safer climes, most notably the Hamptons, Cape Cod and Maine. As an owner of a Cape Cod home, I can attest that the coronavirus has brought us an exceptionally good year, with the house rented continuously from July 4th through Labor Day. Indeed, various members of our family have occupied the house since March and will again after Labor Day. Ordinarily, Cape Cod has a short season of about ten weeks. This year, our house is likely to be occupied for ten months. And of course, this is good for the local economy, even if some restaurants remain closed and various businesses are operating at less than full capacity.
There is, of course, an even better place to go than the eastern seaboard: beautiful Hawaii. If one has to be in exile, do it in paradise. Covid exiles, however, are not Hawaii’s normal fare. To win the business, Hawaii needs to position the islands in a slightly different fashion.
The exiles will be the laptop crowd, professional couples and families in which one or both parents will spend a significant part of the day working by phone or on the computer. They will do the usual tourist things, but not in concentrated quantities. On the other hand, they will be around, potentially for the entire fall season. A key driver will be affordable housing. At least half of Hawaii’s rental offerings on Vrbo and Airbnb are empty. It is possible to negotiate landlords to rock bottom if one offers to stay for a more than one month, with a terrible day rate offset by continuous income. From personal experience, I can attest that many landlords still target high rates and short term rentals. They need to be encouraged to offer their properties long-term and publish compatible rates. Hawaii today does not have to be the high cost option, and landlords should do their share to make potential visitors aware of that fact. And exiles, particularly during quarantine, will need a higher level of service, first and foremost, help in buying groceries and other necessities. Landlords should offer ‘concierge services’ — and they can charge for it.
Ancillary fees should be reduced. Vrbo and Airbnb service fees and occupancy taxes add another 25% to rental costs. The state should work with the agencies to cap their fees at two weeks’ rental. If a weekly rental is, say, $1000, then the service fee is nearly $100. Cap the fee at $250 for a transaction, and that will encourage not only more visitors, but also longer-term visitors. Furthermore, the state’s 14.6% occupancy fee is steep. For now, it should be capped or reduced.
Finally, the state should charge for covid testing. One should be tested at least twice: one upon entry into Hawaii and once before release from quarantine. Both the state and its visitors have an interest in the results of a formal test. Do not view testing as an imposition. View it as peace of mind. Visitors ultimately have the same goal as the local community: to stay healthy. The state can charge for that.
Of course, the state could also lift quarantine. Although incoming risk is better managed with a covid test than quarantine – which can be avoided by the resourceful – the problems of covid transmission, not only in Hawaii but throughout the US, are principally behavioral. Young adults partying with alcohol can spread the virus fast and wide. The lifting of quarantine will tend to bias the market back towards short-term rentals and possibly towards behaviors more likely to create transmission risks.
If quarantine is to remain, the state should target those covid exiles who never thought to spend a month or a season in Hawaii. There are hundreds of thousands of them. Give them a bit of encouragement, and many will come to Hawaii. Let the message spread: Hawaii is looking for long-term renters and making it affordable to do so. Hidin’ out in Hawaii. Paradise is on sale for those willing to make a longer-term commitment.
Even under the best circumstances, the next many months will be difficult for Hawaii. However, by refocusing the tourist sector towards long-term visitors, Hawaii’s economy may find a way to endure, and perhaps even prosper.