IT’S ALL ABOUT THE MONEY: Even in paradise.

... but some say Hawaii needs a breather.

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It’s noon on Thursday, and I head to Da Poke Shack, a legendary lunch spot in Kona on the Big Island of Hawaii. I love this place, though there’s some debate on what locals call “the coconut wireless” about whether Umeke’s is better. You really can’t lose.

I prepare myself for the usual crowd.

There’s no line. We walk right in.

Noon at Da Poke Shack on Thursday, 9/16/21.

A month ago, there was a line out the door with a 30-minute wait.

That was before Hawaii’s Covid numbers started to worry officials so much that Gov. David Ige asked tourists to stay away until the end of October.

The tourists listened.

Happy Hour at the Lava Lava Beach Club that same day.

Even for September, the slowest time of the year, tourist numbers are low. Daily visitor numbers are down more than 30% from summer, to around 20,000. Hotel occupancy has gone from as high as 80% to below 50%.

Hawaii has always been sensitive about Covid, with good reason. There are only 223 licensed adult ICU beds in the entire state. Last year, the situation was so dire that officials closed off Hawaii to tourists for six months unless visitors promised to quarantine for 14 days after deplaning. Arrivals dropped 99%. Nearly 93,000 jobs were lost in the state — more than a third of them in hospitality. Hawaii’s unemployment rate went from a national low of 2% to a whopping 19.4%.

The financial blow was cushioned by stimulus checks and extra unemployment, but those benefits have ended, which is one reason the governor isn’t shutting down the state again. He’s just asking people to wait.

His timing is both good and bad.

“FRIED BY OVER-TOURISM”

“Unemployment ended just as the tourists stopped coming,” says Julie Ziemelis. She’s a resident of the Big Island and runs 365Kona, a website for locals, tourists and house hunters.

However, few business owners are complaining. “Spring break was nuts here, crazy,” she says, “and spring break never ended.” As much as businesses welcomed the return of tourist dollars, “They were so fried by over-tourism since February that they just wanted a break.”

Hawaii has always had a love-hate relationship with tourists. The state needs the money, but the coral reefs don’t need some idiot from the mainland stomping all over them. So the pandemic has many Native Hawaiians and other local residents thinking more seriously about finding more revenue streams.

HAWAII HAS A TECH SCENE?

“It’s still very, very busy, at least on Oahu,” says Ryan Ozawa, who writes about Hawaii’s tech, science and startup scene (yes, there is one). He says his newsletter, Hawaii.Bulletin.com, is for people who are curious about Hawaii “and want to read about more than mai tais, the best surf spots and the best poke bowl.”

Ryan says the pandemic caused many in Hawaii “to feel what it’s like to be an island nation.” He says the state has tried to diversify its economy for years, and some of the billionaires who live here (at least part of the year) have occasionally shown interest in investing in the state’s future. eBay co-founder Pierre Omidyar created the Ulupono Initiative to help Hawaii create a sustainable economy, something that can only happen through technology.

“Look, Hawaii is very dependent on tourism,” says Ryan. “Basically it’s tourism, military, government work… technology is a tiny, tiny slice of that pie.” He says that tiny slice has gotten a bigger over the last decade, but “I would say it’s very slow going.”

There are some accelerator programs here, and one company coming out of them, Volta, just went public on the NYSE. The company is building a network of charging stations for electric vehicles.

But Volta has relocated to California. Ryan says that’s where the money is. “It’s still at the point where if you’re a very, very successful startup, you’re going to move to Silicon Valley, but someday we’ll probably get to the point where we can sustain them here.”

“NOW WE’RE SANTA BARBARA”

What may surprise you is that tourism only accounts for 23% of the Hawaiian economy. Yet it remains the most visible industry, one that’s swung violently up and down over the last 18 months.

For example, you couldn’t get a rental car on the Big Island for months, and if you did, daily prices topped $100. Locals began renting out their personal cars on Turo.

Now car rental lots are overflowing. “We brought a bunch of cars over from California,” the Avis agent told me. They don’t need them anymore.

Prices to rent on Turo are also falling. Julie was renting her car out for $70 a day “but someone told me they can get one now for $40.” (Late last week I saw a Toyota Tacoma available for $30 a day.)

Then there’s the housing market.

Julie refers potential home buyers to Kona real estate agents, and she says sales ballooned 50% during Covid. Everyone realized they could work from home, and home could be anywhere. “We had 30 people bidding on each house.” Median home prices on Oahu, Maui and Kauai top $1 million these days. “Now we’re Santa Barbara,” she jokes.

SO… WHAT’S IT LIKE BEING THERE RIGHT NOW?

I can only speak for Kona, but locally it’s more crowded than it was when the state first reopened last October. It’s still pretty empty, though.

Here’s what downtown Kona looked like in October 2020.

Here it is last week:

Covid numbers are starting to go down, but the state doesn’t forecast total visitor numbers to return to pre-pandemic levels until at least 2024.

Airfares are falling. My Hawaiian Airlines flight had quite a few open seats. You can get a roundtrip ticket from L.A. to Kona for under $300. It’s even cheaper for midweek flights in December. One reason: new competition from Southwest.

Hawaiian restaurants and bars are open, though capacity is capped at 50%. Here in Kona, tables are spaced out, and there are fewer of them, but it’s still easy to get a reservation.

If you want to eat out on Oahu, you now have to show proof of vaccination or a negative Covid test taken within the last 48 hours (employees included).

On Maui, only vaccinated patrons can eat or drink indoors at restaurants and bars. A negative Covid test doesn’t cut it.

On the Big Island, the mayor is considering a measure to publish the names of unvaccinated visitors who promise to quarantine for 10 days.

Julie Ziemelis says even the housing market is starting to cool as prices get pricier. “I’ve been getting more calls from Canadians than anybody else.” (Canadian tourism — worth over $1 billion to Hawaii — dropped significantly after our neighbors to the north were told by their government to stay home during Covid.)

She’d like to see the state use this lull to figure out how much tourism is too much, to see if there’s a balance. “Let’s do it right,” she says.

In the meantime, local businesses hope they’re better prepared than they were in February for the return of tourists. “November is going to be busy,” Julie tells me. “Businesspeople are looking forward to the holiday season.”

Better book that rental car now.

An earlier version of this story said median home prices jumped 50%. It was actually sales volume jumping 50%.

Cover photo of Magic Sands Beach in Kona by… me.

Have you put off travel to Hawaii? If you live there, what are your thoughts? Please leave a comment. Mahalo!