Kona’s Business Prospects: Thanksgiving Week 2020

We’ve certainly had a year to remember…or forget.

The near end of 2020 is a welcome sign for many. We’ve all spent a lot of time anxious about our health, our community, and our local economy. With a huge dependence on tourism, Kona, Hawaii, has been hit incredibly hard by the pandemic’s effects on our economy.

The Bad News

We’ve lost several restaurants and a large number of tourist shops on Alii Drive. Most workers in hospitality have seen minimal opportunities to work in the past eight months. Ironman gave out 600 turkey dinners yesterday, with hundreds of cars in line from early in the morning. There is no doubt parts of our community are hurting.

There are still very few travelers in town, so businesses that rely on tourists are struggling. Scuba shops, restaurants, ocean and land tours, transportation, and all the souvenir shops see very little business.

The Good News

So far, we do not see the out-of-control infection levels per capita that many Mainland areas are seeing. Our hospitalizations are very manageable now.

It appears as if we’ll have effective vaccines available to most in Q1 and Q2 of 2021. Until then, we just have to make the best of what is.

Two of our larger employers in Kailua-Kona–the Royal Kona Resort and the Marriott Courtyard King Kamehameha Kona Beach Hotel have opened recently. Huggo’s On the Rocks and several other local restaurants have opened, and others are expanding hours. 

Many businesses, especially real estate-related, are booming due to the low-interest rates. I’ve heard that many homes are now selling sight unseen, quickly, and at very high prices. 

We have new leadership at the County level, which is focused on improving the island’s business climate by all accounts. We can expect better County permitting processes, allowing more housing (and perhaps at lower costs). We will also see a stronger focus on the rule of law–a prerequisite for investment and innovation.

What Lies Ahead

In the short term–the next five months–I only see more of what we have now: very low economic activity levels for the tourism sector, with bright spots in real estate. 

Our State seems to be doing a one step forward, one step back approach with managing the economy, which I don’t see changing until we get to substantial vaccination numbers.

I do see a considerable boom coming in the summer of 2021 and the year after that. After over a year of little travel and very high savings rates, I think we’ll see a large number of tourists coming to Hawaii next summer. This pent up demand is going to be great for our businesses and our workforce. 

So, here we are at what most would agree is near the end of a horrible year for local families and businesses. That said, it looks like there is good reason for optimism.