Maui’s economy, six months after wildfire, continues to falter

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Twisted, charred aluminum mixed with shards of glass still covers the floor of the industrial warehouse where Victoria Martocci once operated her diving business. After a wildfire devastated West Maui, all that was left of their 36-foot boat, the Extended Horizons II, were a pair of engines.

That was six months ago, but Martocci and her husband, Erik Stein, who are weighing the possibility of rebuilding the business, which he started in 1983, said the same questions filled their thoughts. “What will this island be like?” —Mrs. Martocci asked. “Will things ever be close to being the same?”

In early August, what began as a wildfire tore through the town of Lahaina, a popular tourist destination, nearly leveling it, destroying large swaths of West Maui and killing at least 100 people in the nation’s deadliest wildfire in more than a century.

The local economy remains in crisis.

Rebuilding the city, according to some estimates, will cost more than $5 billion and will take several years. And tense tensions remain over whether Lahaina, whose economy long depended almost exclusively on tourism, should consider a new way forward.

Debates about the ethics of traveling to decimated tourist destinations raged on social media after an earthquake in Morocco and wildfires in Greece last year. But the situation is particularly dire for Maui.

State and federal officials scrambled last summer to find shelter for thousands of residents who had lost their homes, relocating people to local hotels and short-term rentals where many still live, often sharing a wall with vacationing families whose realities feel far from yours. Other displaced residents live in tents on the beach, and some restaurant owners have switched to working food trucks.

About 600 small businesses — half of those registered in Lahaina before the fires — are still not operational, according to the Hawaii Small Business Development Center.

A recent report from the University of Hawaii Economic Research Organization predicted that visitor spending statewide this year would decline about 5 percent, or $1 billion, starting in 2023. The decline in tourism is it almost entirely limits Maui, according to the report.

Carl Bonham, the organization’s executive director, said the extent and speed of Maui’s recovery remained an open question. It depends, Bonham said, on several factors, including how quickly “displaced residents can be moved from hotels to more permanent housing, the speed of ongoing cleanup work, the extent and duration of support programs.”

In the weeks after the fires, politicians, Hollywood movie stars, local activists and even the state’s tourism authority urged travelers to avoid parts of the devastated island.

“Maui is not the place to spend your vacation right now,” actor Jason Momoa, originally from Hawaii, wrote on Instagram. “Don’t be convinced that your presence is necessary on an island that is suffering so deeply.”

Some here believe those messages have had a lingering effect on tourism.

A month after the fires, Gov. Josh Green, a Democrat, announced that West Maui communities around Lahaina would officially reopen in October. It was an attempt, he said in an interview, to save the local economy.

“If we weren’t clear and very direct about when we were going to reopen, then the lingering effects of uncertainty would destroy the entire economy on Maui,” Green said. “People didn’t come back.”

Despite the proclamation, the return has been slow. Many business owners have recently received approval for rebuilding loans from the U.S. Small Business Administration. The agency has approved approximately $290 million in loans: about $101 million for businesses and nearly $189 million for homes. The state and several nonprofit groups have also provided grants to help small business owners.

But life in Lahaina still feels like limbo.

Tanna Swanson, a close friend of Martocci and Stein, spends a lot of time at the couple’s home north of Lahaina, doing 2,000-piece puzzles to pass the time and distract herself. She owned the Maui Guest House, a five-room bed and breakfast that burned in the fires. It was also her home.

Since then, he has stayed in a series of hotels and surfed friends’ houses, moving eight times. In December, Ms. Swanson, 66, received a Small Business Administration loan for $270,000.

She wouldn’t have received it (the mountains of paperwork and the emotional toll of the process had long deterred her, she said) if she hadn’t met in person with a representative from the Small Business Administration who came to Maui to meet with business owners. .

She hopes to see more direct outreach, she said, to reduce bureaucratic delays.

On a recent afternoon, Swanson used his visitor pass to enter his neighborhood, which local authorities have blocked off to prevent looting of burned properties.

The desolate swimming pool and some cast steel address numbers on a concrete wall are all that remains of the bed and breakfast, where, since 1988, it welcomed guests from all over the world, who contemplated ocean views from the upper terrace. .

She looked at the scorched palm trees and thought about her former employees (five at the time of the fires) and how, like her, they had lost their livelihoods overnight.

“My everything disappeared in a matter of moments,” he said. “It’s not just me. “It’s the whole community, the whole island.”

An hour away, along two-lane roads where some tourists still stop to see humpback whales in the waters, Britney Alejo-Fishell owns Haku Maui.

Her store in Makawao, a rural part of Maui far from Lahaina, sells traditional Hawaiian necklaces and hosts workshops to create them. Much of his business comes from celebrations among tourists, who in the past flocked to the island. That has all but dried up, said Alejo-Fishell, who said his profits fell 80 percent last fall after the fires. Since then, he has seen a slight rebound.

One recent morning, before teaching a class on how to make leis, he talked about the problems his family business had faced in recent years. She was forced to close her business for a year during the Covid-19 pandemic and then, just a few months after business began to recover to pre-pandemic levels, fires swept through West Maui. She has been living on a reduced income and she is hesitant to accept government loans.

“The phone started ringing with order cancellations, and this continues,” he said. “We had survived Covid, but now this is like a second Covid situation again.”

Ms. Alejo-Fishell, a Hawaii native, said the wildfires had affected many acquaintances, including friends who lost loved ones and their homes.

“They are in mourning and will be for some time,” he said. But, she added, “tourism is our economy and we need it to survive.”

Back in Lahaina, the tragedy of August 8 repeats itself for Mrs. Martocci. She had a diving expedition scheduled for that day, but she canceled it due to strong winds. Hoping to check out the warehouse, she and Stein ran down Honoapi’ilani Highway, which was clogged with traffic due to downed power lines and the growing rush of evacuees. The couple turned around, but spoke by phone to Ms. Swanson, who told them that she had evacuated and had seen thick black smoke, signifying a structure fire, heading toward her warehouse.

“We didn’t know if he was missing, but we had a feeling,” Martocci said.

In recent months, she and Stein have begun saving their business. They considered whether it made sense for her to move, but Ms. Martocci had never felt more at peace than in the crystal blue waters of Maui.

Recently, they worked with the Small Business Administration and received a $700,000 loan. But at 64, Stein is uncomfortable with the idea of ​​taking on the debt he would need to rebuild, especially considering how much uncertainty remains.

He needs a renewed permit with the state’s navigation department to run his business, but to get one he needs a boat, and for now, the marine facilities they’ve used for the past 40 years remain partially closed.

“We’re in a holding pattern,” he said. “There is no idea when it will relax.”

Martocci said he had come to think of his community as a painful Venn diagram, in which everyone knows someone who lost a loved one, a home or a business. Some lost all three.

“The place we all knew and loved has changed forever,” he said. “We just know we have to keep moving forward and find some sense of normalcy.”

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