Possible Moratorium Looms Over Maui Vacation Rentals

There is no simple answer to how Maui is doing after the fires and what travel to the island looks like now and in the near future. Maui residents are also divided from being welcoming to protesting more visitors until the housing situation for fire victims is resolved.

At a meeting today we attended with Governor Josh Green, he said that there are nearly 15,000 short-term rentals on Maui. At the same time, 3,000 long-term rentals are needed immediately to house those displaced.

Maui tourism plan reflects severe challenges ahead.

Some of the key points Green raised began with the fact that Hawaii turns on tourism dollars. He hopes that statewide tourism income will be slightly higher this year than last, despite the tourism losses on Maui.

“We have to convert short significant numbers of short term rentals to long term rentals” — Governor Josh Green.

Governor Green said, “On Maui, you get 352% (more) by being a short-term rental owner… It’s just that Hawaii’s simply too attractive to the world. So we have to adjust this. The hope would be to give a runway statewide, a runway over time, so people (owners) can make the calculation of whether they can move to long-term rentals.

The governor said that alternatively, “we will have a two-tiered society. We will continue to have too little housing for working families, firefighters, and nurses and all the people that we know. And we’ll gradually drift to a society that doesn’t have services and can’t keep local people here. I’m learning things in this job.”

Governor Green introduced the possibility of a Maui vacation rental moratorium:

“I have communicated with my Attorney General… I will contemplate a full moratorium on short-term rentals for a short period of time on Maui. And I would lift it immediately once we get to 3,000 units.

Josh Green, Hawaii Governor

This comes as a new draft HTA plan intends to help increase travel to Maui:

“Working with state and federal management officials, the Hawaii Tourism Authority (HTA) will coordinate the next 12 months of tourist activity and tourism-related economic redevelopment in the region and enhance messaging on the appropriateness of traveling to non-impacted areas in Maui.”

HTA says that a key challenge for the Maui visitor industry is an incorrect belief that the affected area is much larger than it really is. They said that visitors do not understand the geography of the state or of Maui. For example, West Maui’s 109 square miles make up 15% of the island. But that small percentage, according to HTA, has caused Maui and statewide tourism to suffer.

In surveys, however, potential visitors choose not to book travel to Maui due to the “high cost and change fees” and also “out of respect for Lahaina residents.”

After Maui fire, here’s what HTA says it has learned needs to be done:

1. Provide consistent, ongoing communications to all stakeholders and to potential visitors. Confused messaging still appears everywhere. Information available online leaves residents and visitors unsure where to turn and what to believe.

That has clearly been the case on Maui from the point that Lieutenant Governor Sylvia Luke essentially closed the entire island following the August wildfires, giving messages that have continued to reverberate. Governor Green, you’ll recall, was not in Hawaii when the Lahaina fire occurred.

2. Clearly define what’s open on Maui to avoid visitors believing that the impacted area is much larger than it really is. The sooner that this is done, the faster the recovery may be.

Ongoing Challenges resulting from the Maui wildfires:

• The persistent shortage of housing remains a significant concern for Lahaina residents, with many still residing in accommodations intended for visitors and other housing scattered across island-wide.
• Some West Maui hotel industry employees living across Maui face challenges returning to work.
• The forecast for visitors to Maui remains down through 2024.
• Airline seats to Maui are down.
• Hawaii’s visitor count has been trending lower for the past three months, and, as a result, tax funds to help Maui are being reduced.
• Maui small businesses face lower sales, challenging their ongoing viability.
• Visitors are still unsure about the scope of the affected area, believing it is larger than it is.
• Messaging is exacerbated by those not wanting Maui Tourism to resume at previous levels.
• Too high costs and fire concerns remain the two biggest obstacles to Maui travel returning to normalcy.

Here’s some of what HTA hopes to achieve through its new plan:

• Increase Maui travel intent to Maui in 2024 and 2025.
• Grow statewide tourism.
• Create more visits to the other islands to help offset the lack of Maui tourism.
• By early 2024, increase the visibility and call to action for travel to Hawaii “targeting lucrative markets.”
• Support Maui businesses to provide consistent messaging that Maui is open to visitors.
• Expand Maui’s tourism offerings and attractions.
• “Support providing longer-term housing for wildfire-affected households living in visitor accommodations by assisting with communication efforts to short-term rental owners.

Hawaii Tourism Authority is currently requesting feedback on its draft plan. “HTA’s efforts follow the latest rapid assessment from the state Department of Health, which shows financial recovery is the greatest priority of wildfire survivor households, according to 29% of those assessed. Among the top challenges facing wildfire survivor households is high unemployment and businesses cutting hours or closing.”

This all comes as Hawaii faces a downturn in tourism.

The approaching holiday season is anticipated to witness at least a modest reduction in Hawaii’s normal influx of visitors. In fact, some insiders are now suggesting that it might take up to five years for Hawaii to fully recover to pre-Maui fire levels.

Hawaii’s tourism decline persists, with the Maui fire worsening pre-existing challenges. Escalating costs, post-Covid, have finally begun affecting Hawaii tourism, marking just the beginning of many issues.