In June of 2020, Pamela Tumpap, the president of the Maui Chamber of Commerce, awoke to a shock. April’s unemployment numbers had just come out, and the unemployment rate in the Kahului-Wailuku-Lahaina metropolitan area had jumped from 2.1% in March to 32.9%. “I literally woke up with my heart pounding when I saw the numbers that day,” Tumpap said.
As the pandemic shuttered the economy, jobless claims across Hawai‘i surpassed 80,000. “We went from the lowest unemployment numbers in the nation to the highest unemployment in the nation,” she said. And within the state of Hawai‘i, Maui County was the most impacted county because it is “the most reliant on tourism,” she said.
The summer resurgence of tourists, unwelcome to many residents, gave new life to an island-wide conversation about rebuilding the economy to rely less on tourist dollars. Some residents simply no longer want to work in the tourism industry, while others want different, often better-paying jobs.
Despite years of Hawaii politicians posturing over economic diversification, 29% of the islands’ jobs in 2019 still came from the accommodation industry, restaurants, and bars, which tend to pay relatively lower wages. And with the cost of Maui living on the rise, a more diverse array of jobs, some higher paying, could help residents afford a future here.
“Kids that really love this place, they have to leave to find a decent job, and it has to change,” said Spencer Hyde, a Department of Education employee, at a Maui County council hearing in June.
The most recent emigration data from 2018 shows that over 4.5% of Hawai‘i’s population—67,293 residents—moved to the mainland for personal and economic reasons; a 2021 Maui Chamber of Commerce report stated that 72% of residents leaving or considering leaving Maui wanted better jobs or a more affordable life.
The same high cost of living on Maui that sends residents packing also stymies entrepreneurs opening the very businesses that might employ and help people afford the island. “People don’t really want to start new businesses in places where they can’t afford to live,” said Sumner La Croix, a research fellow with the University of Hawaii Economic Research Organization (UHERO).
Hawai‘i has not exactly made itself attractive to businesses. In fact, the Aloha State is often a top contender on lists of the “Worst States For Business,” placing 42nd on ChiefExecutive.net’s 2021 and 2020 lists, and 49th on CNBC’s in 2019.
According to Tumpap, the Maui Chamber of Commerce president, it’s taxes and the high cost of living. “we have a high regulatory environment. Big businesses pay more in taxes.” She added, “We have significant county and state permitting hurdles.”
According to La Croix, the best way to diversify the islands’ economy is to start by improving basics like housing, traffic, and public education. “If people felt like the basics were a little bit better, they’d be more likely to start up a firm here, or even relocate a firm here,” he said. Congested roads can impinge on businesses with slower food deliveries, delayed arrivals to meetings, and tourists spending more time in their rental cars than dollars. Public education would also need to improve, he said, because families want to send their kids to public schools “if possible.”
Maui residents face a challenge of belonging today similar to the 1930s, ’40s, and ’50s, when 18% of the population left, mostly in search of work. During the Second World War, many left for O‘ahu to fuel a growing defense industry. By 1956, only 37,605 people—about a fifth of today’s count—lived on Maui, according to the Territorial Board of Health. In that thinly populated year, Maui received only 5% of all tourists to the islands—because there were simply not enough beds—and pocketed just 1% of what they spent.
A land use report in 1959 presented two paths to slow Maui’s exodus. The island could fulfill “the Territory’s need for home-grown vegetables, potatoes, onions and alfalfa,” while growing and diversifying the agricultural industry. Or it could “capture a larger share of the Territory’s tourist trade. With its climate and beaches, Maui can compete with Oahu and the other outer islands for tourist dollars.” The report added, oracularly, “The construction of hotels and the people needed to operate them will help in a large measure to build up the population.”
Two years later, developers built Kā‘anapali into a resort. Kapalua, Wailea, and Makena followed. The burgeoning industry employed some residents, extending their lease on island life, and attracted newcomers. The population swelled 62% from 38,691 in 1970 to 62,823 by the next decade.
The plan to prevent an exodus by boosting tourism may now be backfiring. In hearings and interviews for this story, Maui residents often lamented that an excess of tourists risked “killing the goose that lays the golden egg,” mobbing the island to the point that it becomes less attractive to future visitors. But underneath that is the risk of overdependence: Those golden eggs are all in one basket.
Before the pandemic, the Grand Wailea was one of Maui County’s top employers, with 1,621 people on staff at the end of 2019. Maui Memorial Medical Center trailed the resort with 1,379 employees, followed by the Four Seasons Resort in Wailea (1,000), the Four Seasons Resort on Lanai (850), and the Ritz-Carlton in Kapalua (640). Then, between January, 2020, and this May, about 11,400 tourism-related jobs vanished from Maui County. The number of leisure and hospitality jobs decreased by 24%—about 5,500—and accommodation and food service jobs shrank by 29%—about 5,900. The Hawai‘i Tourism Authority was not far off in estimating the loss of 9,700 accommodation jobs (down 80%) and 4,600 food service jobs (down 46%).
Even as tourists returned to the islands this summer, the jobs didn’t—and economists didn’t really know why, Civil Beat reported. Hotel jobs may not bounce back as corporate executives reimagine the hospitality industry for post-pandemic times. In an earnings call this February, Chris Nassetta, the president and CEO of Hilton, which operates the Grand Wailea on Maui, said the global hotel company was working on making its brands “higher-margin businesses and creating more labor efficiencies particularly in the areas of housekeeping, food and beverage and other areas.” He estimated that, after the pandemic, Hilton’s businesses will “require less labor than they did pre-COVID.”
None of these major hotels, as one might guess, are locally owned. On a broader scale, a 2016 state report showed that 84.3 percent of hotel or tourism-related properties had their property taxes paid by entities with out-of-state mailing addresses. Information like this can disillusion some residents, who think tourist dollars don’t actually fuel the Maui economy as much as industry insiders claim. In blunter terms: “Our money is getting sucked out of the state,” said Albert Perez, the executive director of Maui Tomorrow.
For now, alternatives to tourism remain thin, and people are trying to figure out what Maui can become. On July 7, Maui County council chair Alice Lee sent out a survey in her newsletter, asking, “How can legislation support new and emerging industries during the post-COVID era?” It’s a question older than the state of Hawai‘i, and one that Maui residents have a chance to answer differently this time.
The 2021 Maui Chamber of Commerce report recommended looking at robotics, artificial intelligence, and biotechnology, and expanding 5G access. It also suggested developing existing industries like construction, film, and the age-old refrain of agriculture.
La Croix, himself a professor emeritus of economics at UH Manoa, stressed that a research university fuels the economy and creates a diverse array of jobs. In fiscal year 2020, the 10-campus University of Hawai‘i system catalyzed $3.66 billion in local business sales and created over 22,500 jobs statewide, according to a UHERO report released this May.
“If you don’t have a good research university, then you’re left purely and simply talking about expanding taro farms, which in and of itself isn’t such a bad thing to do,” La Croix said.
For some on Maui, taro farming, and a more self-contained economy to go with it, is just what they want. Anjo Ho’opa’i-Waikoloa grew up in Hana at a time when mostly Hawaiians lived there, and she considers herself “a product of my village and my community.”
Ho’opa’i-Waikoloa teaches preschool and coaches, so the pandemic didn’t impact her quite as much as her relatives who worked in the tourism industry. “My husband and I have chosen fields that put our community first that are not based on tourism,” she said. “My kuleana is to preserve and protect.”
As is, Ho’opa’i-Waikoloa thinks that there are plenty of alternatives to working in tourism. “We have a shortage of nurses, we have a shortage of teachers, we have a shortage of police officers,” she said. “There are so many jobs out there that put community first.”
