As throngs of tourists have returned to Hawaii and hotel, restaurant and bar workers were ushered to the front of the line for COVID-19 vaccinations, Tina Yamaki, president of Retail Merchants of Hawaii, heard a common question from some retailers who primarily serve tourists.

鈥淪ome of our members were like, 鈥榃hat about us?鈥欌 Yamaki said.

In the end, even though the state still officially has made hotel, restaurant and bar workers a priority, Yamaki, through her lobbying efforts, managed last week to get access to just one of Oahu’s vaccination centers for retail workers: a site at Leeward Community College.

That story is in some ways emblematic of the situation facing Hawaii’s retail trade businesses. While hotels and restaurants have taken a beating during the COVID-19 crisis, retail businesses have also been hit hard.

The good news is tourists are coming back, which is potentially good for shops in places like Ala Moana Center, the state鈥檚 flagship shopping mall and a hive for visitors.

The bad news is that retailers still face steep challenges: as much if not more than hotels in some ways, and Hawaii’s nascent economic recovery is leaving many of them out.

VIsitors cross Kalakaua Avenue fronting the International Marketplace in Waikiki.
Tourists, such as these on Kalakaua Avenue in front of the International Marketplace in Waikiki, are back in Hawaii, filling hotels. But will that be enough to save struggling retailers? Cory Lum/Civil Beat/2021

UHERO: 10,000 Retail Trade Jobs Lost In 2020

While the COVID-19 crisis has hurt the entire U.S. economy, by some measures Hawaii has been the hardest hit. As of January, the state鈥檚 unemployment rate was the nation鈥檚 highest, at around 9%.

Meanwhile, while hotels and restaurants have suffered enormous job losses, so have retailers. The state had 10,000 fewer retail trade jobs at the end of 2020 than it had in 2019, the University of Hawaii Economic Research Organization reported in its economic forecast for 2021, published earlier this month.

The forecast notes that, according to Colliers International, Oahu鈥檚 retail market lost 107,586 square feet of occupancy during 2020. And even big names have taken a hit. Ala Moana Center, UHERO notes, has lost brands like Banana Republic, Ann Taylor, Williams Sonoma and Forever 21.

Alexander & Baldwin, which owns much of the commercial real estate in Kailua鈥檚 main shopping district , also has taken a hit. In its annual report to shareholders for 2020, issued in February, A&B reported that 199 of its commercial real estate, or CRE tenants sought rent deferrals in 2020, and 107 sought other lease modifications, with some tenants getting both. The value of all this was $12.3 million. The company reported another $19 million in lost revenue due to uncollectible tenant billings.

As of February, the landlord still hadn鈥檛 collected all rents from the last quarter of 2020, A&B said, although no tenants had thrown in the towel and closed.

鈥淎s of February 12, 2021, all of the Company’s properties within its CRE portfolio remain open and substantially all of its existing tenants remain open and operating in some capacity,鈥 the company reported. 鈥淔urther, as of this date, the CRE portfolio tenants have paid approximately 84% of their fourth quarter billings and 84% of their January 2021 lease billings (which includes base rents and recoveries from tenants).鈥

Adding to the challenge, particularly for Oahu retailers, is that international travel to Hawaii, namely from Japan, is virtually nonexistent. So while hotels might be filling up in Waikiki, they鈥檙e not filled with the monied Japanese travelers who like to shop.

鈥淚t鈥檚 a very uneven experience in retail; you can just see from the foot traffic,鈥 said Sumner La Croix, a University of Hawaii professor emeritus of economics. 鈥淪ome stores are doing well, and others aren鈥檛.鈥

One store doing reasonably well on a recent afternoon, at least in terms of foot traffic, was the high-end David Yurman jewelry boutique in Ala Moana Center.

Cory Quon, the store manager, said he was happy that tourists have come back to Hawaii. He had just gotten word about Yamaki’s vaccination program, he said, noting that it’s impossible to stay 6 feet away from a customer, per COVID-19 guidelines, while working at a counter showing expensive jewelry.

“I always thought it was something they would initiate right away,鈥 Quon said.

鈥淧eople probably think we鈥檙e insane for doing this,鈥 said Aly Ishikuni-Sasaki, owner of MORI by Art + Flea in Ward Village and B膩s bookstore in Chinatown, of her decision to start a new venture during the pandemic. Stewart Yerton/Civil Beat/2021

Even as retailers who cater to tourists struggle, there’s been one bright spot for others: the support of residents who see the value of supporting local businesses during the crisis.

Shie Clark, owner of the We Are Iconic boutique in Ward Village, said she鈥檚 had support from her local customers and, like many other businesses, has been able to quickly pivot and expand her online sales, which have increased 170%.

鈥淚t鈥檚 been good to have so much local support,鈥 Clark said.

Doug Johnstone, president of Ward Village, said Clark is just one example of a retail tenant who has adapted by expanding online, using available outdoor space creatively and taken other steps to work through the crisis. Howard Hughes Corp., which owns Ward Village, has tried to work individually with tenants to work out solutions to financial problems, he said.

鈥淎 lot of credit goes to how the retail operators have adapted and recalibrated what they do,鈥 he said.

Clark鈥檚 Ward Village neighbor, Aly聽Ishikuni-Sasaki, owner of MORI by Art + Flea, has also made her way through the pandemic.

In fact, business has been good enough that Ishikuni-Sasaki has opened B膩s Bookshop in Chinatown, which eventually will include an attached bar and a cafe.

鈥淧eople probably think we鈥檙e insane for doing this,鈥 she said. 鈥淏ut you can鈥檛 just sit around waiting for a miracle to happen.”

Hawaii鈥檚 Changing Economy鈥 is supported by a grant from the as part of its CHANGE Framework project.

Support Independent, Unbiased News

Civil Beat is a nonprofit, reader-supported newsroom based in 贬补飞补颈驶颈. When you give, your donation is combined with gifts from thousands of your fellow readers, and together you help power the strongest team of investigative journalists in the state.

 

About the Author