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Four years after Covid-19 hit Hawaii, the pandemic has claimed another victim.

Big City Diner, the old-school restaurant that’s been slinging comfort food like loco moco and kimchee fried rice in Kaimuki since 1998, is officially closing its Waialae Avenue location on Friday.

“It was just the pandemic, things changed,” said Lane Muraoka, the diner’s president and founder. “The cost of doing business was expensive to begin with in Hawaii. It got 100, 200% worse.”

As one of Kaimuki’s oldest restaurants, closure reflects a trend across Hawaii’s food-service industry. Rising costs, paired with labor shortages brought on by the pandemic, are continuing to transform the landscape and threaten the stability of thousands of local businesses.

“It’s been really a struggle,” said Sheryl Matsuoka, executive director at the .

Hawaii’s labor force remains 3% to 4% below pre-pandemic levels, at about 635,000, according to data from the . And while bar and restaurant jobs still make up an enormous part of the hospitality industry, there are nearly 4,000 fewer than there were in 2019.

“We’re in May, almost June, of 2024,” Matsuoka said. “The workers have not come back.”

The loss of Big City Diner is a blow to Kaimuki, a neighborhood where the streets are lined with restaurants and eateries. Along Waialae Avenue, plate-glass windows offer passersby glimpses of diners sharing brick oven pizzas and college students bent over textbooks sipping lavender vanilla lattes. There are high-end restaurants like , serving five-course, French-inspired dinners, Vietnamese pho joints and bakeries like offering strawberry guava cake bombs.

Kaimuki has been a restaurant row for as long as Muraoka can remember. Pointing to a series of black and white images along Big City Diner’s wall, he spoke of the history of the neighborhood and its presence within the diner.

“I wanted to keep the history alive for the community because there’s so much history,” he said. “It’s a generational restaurant.”

Big City Diner soon will be merely part of this history. The restaurant began struggling at the start of the pandemic when officials enforced a temporary ban on dining in at restaurants and bars, Muraoka said. When Big City Diner reopened, it had to balance the safety of employees and customers with the success of its business, he said.

“Everyone was 6 feet apart,” he said. “That’s less than half the restaurant — how am I going to pay the bills?”

Muraoka’s diner survived the pandemic’s initial hit, but not all businesses in Kaimuki were so lucky. Ed Kenney’s Town closed in 2020, and Kaimuki Superette followed two years later.

Those that have remained are still feeling the effects of the pandemic. Even before Muraoka announced Big City Diner’s closing, a lack of staff had led him to scale back operations in Kaimuki from seven days a week to five.

“It was challenging because we couldn’t open every day,” he said.

Big City Diner’s locations in Waipio, Pearlridge, Kailua and Kaneohe will remain open seven days a week.

Other restaurants and food-service businesses across Kaimuki also have struggled to fill jobs.

“Having a difficult time hiring and retaining quality kitchen staff has been a thing for everybody,” said Emmy Antonaras, assistant manager at . “We were definitely no stranger to that.”

The same goes for Daoud Salame, an office manager at . He said the labor shortage is having a ripple effect, contributing to a decrease in employee morale and an increase in overall costs.

“Finding workers, it has gotten a whole lot tougher after Covid,” he said. “That’s one of the biggest challenges that we have.”

Restaurants Nationally Feel Effects Of Labor Shortage

Hawaii is hardly alone. A 2024 industry report by the National Restaurant Association found that 98% of operators reported higher labor costs than those seen in the previous year. 

And it’s not just labor. Some 97% also reported higher food costs. 

“The cost of doing business is a lot higher now than it was before the pandemic, absolutely,” Matsuoka said.

Melissa Bow, owner of in Kaimuki, agrees.

“It’s been a steady march of prices going up, for sure,” Bow said. “We’re not getting eggs or sugar or milk any cheaper than you are, and that’s very different from the mainland.”

Hawaii restaurateurs are also struggling with an increased minimum wage, increased insurance premiums and a decline in travelers from Japan, Matsuoka said.

Spending from visitors from Japan is down 51.7% from the first quarter of 2019, according to data from Hawaii Tourism Authority.

“Because we haven’t gotten back our Asian market, it’s been really a struggle because the sales are not there,” Matsuoka said.

Technology has enabled some restaurants to adapt, Matsuoka notes. Customers often find themselves greeted by tablets rather than by people, or place their orders remotely via in-app menus. Some restaurants, such as Moanalua’s Ruby Tuesday, even have robot servers.

More than three-quarters of restaurant operators feel that using technology gives their business a competitive edge, according to the National Restaurant Association. It could also let restaurants address the staffing shortage, Matsuoka said.

“Let’s say it’s a McDonald’s,” she said. “When you go to the kiosk and place your order and then put in your debit card, you go to the counter and pick it up, right? That eliminated a body taking the order.”

This all gives Matsuoka confidence for the future.

“Restaurateurs are very resilient,” she said. “They’re going to still open restaurants because they love it, because it’s in them to keep opening restaurants.” 

As for Kaimuki, Muraoka said Honolulu’s neighborhood restaurant row will adapt.

“Kaimuki, man, it’s incredible,” he said. “This community will never go away, it will just keep on changing.”

“Hawaii’s Changing Economy” is supported by a grant from the as part of its CHANGE Framework project.