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So far, Hawaii has managed the COVID-19 pandemic well. The curve was flattened weeks ago. The state’s testing capacity is among the best in the United States. The Hawaii Department of Health is ramping up its ability to contact trace. They should be commended for these outcomes which are about as good as we could have hoped for.

With the quarantine for visitors in place, I suspect that the state will be able to slowly and carefully open its economy with adequate precautions in place such as requiring masking in public spaces and social distancing.

However, Hawaii is far from out of the woods.

One of the biggest challenges that we will face is how to open up the state to tourism. The quarantine, while porous, has worked remarkably well.

Prior to the pandemic, Hawaii could expect to see anywhere between 200,000 and 250,000 additional tourists residing in the islands on any given day. The quarantine has slowed this down to a trickle (some might argue that this should be lowered to zero but doing so will require draconian methods and would not be an efficient use of state resources).

Moving forward, the state of Hawaii needs to devise a plan to allow some tourism while protecting its residents.

Some have proposed requiring all visitors to take a test for COVID-19 and to verify that they are negative before they can enter the state. This is most likely not workable.

Unworkable Solutions

There are two issues.

The first is that the state cannot compel another person to test for COVID-19. People have the legal right to refuse to be tested. The second is that many legal scholars would say that it is unconstitutional for states to ban entry into their states.

Sure, there are precedents dating back to the 19th century, but it is not at all clear or likely that attempts to ban entry to Hawaii in 2020 would hold up in court even in these extraordinary circumstances. Possible workarounds to these legal hurdles are not likely to work.

One possibility would be to require people who did not test to quarantine for two weeks. In the absence of further interventions, this is a non-starter. Waikiki would consist of two types of people: those who test and those who did not. They look the same. In equilibrium, people who did not test would intermingle with those that did and eventually tourists would realize that the policy has no teeth.

In the end, no one would test.

There are solutions to this, but they are heavy-handed and would exhaust many state resources.

One would be to require tourists to carry proof of their tests at all times and have police officers randomly ask tourists for proof of them. This will likely butt up against constitutional constraints.

Another would be to employ remote monitoring to ensure that those that did not test are quarantining. Once again, there are legal issues to consider here.

Finally, none of these options is welcoming. Nothing says aloha like, “Show me your papers.”

The state and its counties do have one power that can reduce tourism to manageable levels: the power to tax.

The hotel tax should be raised — a lot. As long as the pandemic is a threat, there should be a dramatic increase in the hotel tax. Not only will this slow tourism to the islands, it will raise revenue, especially since the only viable alternative that I see is a blanket quarantine. Once the pandemic subsides, the tax can be lowered.

The economic rationale for this is strong.

Of course, making this scheme feasible would entail careful enforcement of the ban on illegal vacation rentals.

But at least we know that the legal basis for this is more sound than slapping electronic ankle bracelets on tourists who do not offer proof of COVID-19 test results.

The economic rationale for this is strong. Under normal circumstances, tourism confers an externality on the state, for example, by increasing congestion.

These externalities have increased by a massive degree due to the pandemic. The case for a much higher hotel tax has as well.