Finding a way. Hawaii workers and businesses are still coping with a changed tourism industry

Cruise ship job sinks | Domestic dependence

The call to war

Patrick Legras lost his job on the ms Patriot cruise ship when its owner went bankrupt. He found a job as a security guard for a private company, but at about half the pay. Legras patrols at the Regency Tower.


Cruise ship job sinks

By Dave Segal

Life is a struggle now for Honolulu's Patrick Legras.

His days as a cabin attendant on the ms Patriot cruise ship have been replaced by nights as a security guard at the Regency Tower.

He's stopped using his credit cards, cut off one of his two cellular phones and canceled his magazine subscriptions. And he said there may have to be more cost cutting as the bills pile up.

"I wish Sept. 11 would have never come," he said wistfully.

Legras, who is single, lost his job in mid-October when American Classic Voyages Inc., parent company of the ms Patriot, filed for bankruptcy in the aftermath of the Sept. 11-induced slowdown. He had worked in the cruise industry for 13 years

"It was my last week before going on vacation when the captain announced the company was filing for bankruptcy," Legras recalled.

The vacation, as it turned out, stretched into three long months of job-hunting as Legras joined thousands of other displaced employees in tourism-related jobs looking for work.

Legras said he tried to get jobs with Roberts Hawaii Tours and as an airport greeter before landing the security job.

"There are jobs out there if you look for them, but maybe it's not what you're looking for," Legras said.

He eventually ended up with a 40-hour-a-week graveyard shift as a Wackenhut Corp. security guard. It hardly pays the bills, however, and Legras, who makes $7 an hour, said he's now trying to land a job as an airport screener.

After Patrick Legras lost his cruise ship job, he found a lower-paying security job.

"I'm making about half the money now as I was making before on the cruise ship," Legras said. "Once you take taxes out, though, I make practically nothing."

He can make $23,000 a year as an airline screener.

"That's about what I was making on the cruise ship," said Legras, after factoring in an approximate $100 a week he was making in tips.

Legras, who owes between $4,000 and $5,000 on his credit cards, said the interest and late fees have been killing him.

"I was doing fine while I was on the cruise ship," he said. "Now I'm frustrated. I've got all my credit cards in trouble right now. All my bills are sitting on my desk and I'm trying to catch up on my payments."



Domestic dependence

By Tim Ruel

In 1997, international arrivals accounted for 43 percent of visitors to Hawaii. This year, it's 30 percent. Nearly two out of three of Hawaii's travelers now come from the U.S. mainland, and tourism spending has fallen as a direct result.

Immediately after Sept. 11, Hawaii lost more than half its monthly Japanese visitors. In October 2001, the number of Japanese visitors fell to 67,440 from 149,840. Arrivals began improving in December, but have not recovered. This year, Japanese arrivals are less than 80 percent of what they were in 2001 as Japanese opt for cheaper and more secure destinations, such as China.

Hawaii's domestic arrivals bounced back much faster after Sept. 11, particularly from the western United States. By May, domestic arrivals here were better than last year, according to data from the state Department of Business, Economic Development and Tourism.

Retailers have been noticing. "We've definitely seen a shift," said Mark Hollander, president of Crazy Shirts.

More than half of Hawaii's domestic arrivals are from the U.S. West, where visitors spend a lot less than the Japanese. On average, U.S. West travelers have spent $1,379 per trip this year. The Japanese have spent $1,649, nearly $300 more per person.

As a consequence, total visitor spending in Hawaii fell more than $325 million in the first half of the year.

Nowhere is the drop more evident than at DFS Hawaii, where duty-free sales are down 31 percent from last year and retail sales are down 21 percent. Business hasn't been so low since the late 1970s, according to a company official.

McInerny, a 145-year-old retailer that plans to close its doors in January, expects sales this year to fall 17 percent to $15 million from $18 million last year.

The days of Japanese tourists coming in and buying sacks of 30 to 40 T-shirts at Crazy Shirts are probably over, said Hollander. "Those are few and far between now, but we're still trying to forge ahead," he said. Sales at Crazy Shirts are stabilizing from a particularly rough stretch last year, and are looking up, Hollander said.

Crazy Shirts filed bankruptcy on Sept. 10, 2001, and was supposed to be sold to California-based Big Dog Holdings, but the events of Sept. 11 had such a negative impact on Hawaii's tourism that the deal was called off and Crazy Shirts was put up for auction. The firm was purchased by Hawaii-based Waikiki Trader Corp.

Companies that benefit from the shift to mainland tourism are those that cater to more independent-minded travelers, such as rental car firms. Brands that are familiar to U.S. travelers should also do well, according to Wendell Brooks III, vice president of commercial properties for Chaney Brooks & Co.

Fewer Japanese will mean fewer sales for luxury retailers, but luxury items have done well in Hawaii compared to other markets and will continue to be popular because of their brands, said retail analyst Stephany Sofos. She suspects middle-market retailers, such as Gap Inc., are more vulnerable to price-conscience visitors.

At the low end of the spectrum, Hawaii's ubiquitous ABC Stores should continue to do well regardless of visitor trends, because the company's resort shops target impulse buyers, Sofos said.

The larger problem with a decrease in Japanese visitors is that the islands will need a larger increase in mainland travelers to generate the same amount of overall spending, Sofos said.

But how many tourists can the state handle? Hawaii has always had fewer than 7 million visitors annually, and the state is still studying how many more it can take. The whole point of recent investments in Waikiki -- such as the city's $15 million remake of Kuhio Beach -- is to draw higher spending, Sofos said. Those investments could be wasted, she said. "I look at this and say to myself, 'oh boy,'" Sofos said.

"Do we want to be the burger-and-beer set crowd, or do we want to be the wine-and-cheese, or the sake-and-sushi?"

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