North Shore businesses are suffering the effects of economic trends and the closedown of TVRs. “The ‘trickle down effect’ is simple to trace…”If you have taken a stroll through Pa‘ia Town recently, you might have noticed something unusual. One year ago, on any given afternoon, you would likely see throngs of visitors browsing in boutiques, ordering box lunches for a trip to Hana, or enjoying an icy-cold margarita on a breezy lanai. But today, the scene is much different. The once thriving town is distinctly quieter, and for some, the change is welcome—fewer cars, more parking spaces and less traffic. But for many of Pa‘ia’s restaurants, gift shops, art galleries and surf boutiques that rely on tourists’ dollars, the recent transformation has proven to be a nightmare.
As news of the closure of the landmark Nagata Store spilled across the headlines, some business owners grew increasingly worried—others were already suffering. As whispered rumors circulate about the demise of other businesses, many are asking the same question: Who, or what, is to blame?
Some say that the closures of ATA and Aloha Airlines and skyrocketing prices at the gas pump are at the root of the problem, but others are convinced that the shutdown of transient vacation rentals (TVR) is the reason Pa‘ia’s visitors are vanishing.
For several decades, Pa‘ia Town has flourished as a haven for short-term accommodations, catering to visitors who prefer the sunny, quiet town as an alternative to the thriving resort areas of Wailea, Ka‘anapali and Kapalua. In addition, as the “Windsurfing Capital of the World,” Pa‘ia appeals to those who are drawn to the magnificent surf of Maui’s North Shore—many of whom arrive with pocketfuls of euros, one of the sturdiest currencies in the global economy.
In the wake of the TVR shutdown last year, North Shore visitors were left with very few options. In June, the Pa‘ia Inn opened its doors to visitors, providing one solution to the shortage of accommodations. While the Pa‘ia Inn may be a sign of good things to come, many believe that several of the town’s businesses will soon be closing up shop—for good.
“We are all suffering, but some more than others,” said one shop owner who requested that her name not be printed. “The county says this is all because of gas and the airlines, but we lost hundreds of paying customers because they’re not allowed to stay here anymore.”
According to Pa‘ia businesswoman Margit Tolman, there are a number of local businesses that are on the verge of ruin—including her own.
In 1990, Tolman started her business on her kitchen counter with a three-ring binder and a fax machine. Tolman said she faced a number of business challenges over the years, including the first Gulf War, recession and the impacts of the 9/11 attacks. While the private accommodation sector slowed down a bit during these difficult times, she said, “It was very consistent and was the backbone of the economy on the North Shore… visitor clientele staying in private accommodations kept the local economy alive.”
Since the decision to close TVRs in Maui County, Tolman and many other residents have seen their business dreams vanish into the balmy North Shore air.
“Nothing affected my business more than the shutdown of vacation rentals last year,” she said. “I have no employees anymore and reduced my office space by 50 percent… and I hope to survive.”
And while the impact has rattled Pa‘ia Town business owners, local employees and job-seekers are also feeling the pinch.
According to Tolman, her last employee—a single mom raising two small children—left in July 2007 to find work in South Maui, making the trek from Kula to Kihei every day.
“Now with escalating gas prices, she is desperate,” Tolman said. “She also lost her home… the property was sold [because] the owner was using the main house as a vacation rental and my employee was living in the cottage for reduced rent.”
Stories like this are not uncommon on the North Shore. But as local business owners and employees grow increasingly frustrated, many are hesitant to speak out.
Maui Vacation Rental Association (MVRA) Member Sharyn Stone has voiced concern for towns like Pa‘ia, which rely on tourist income for financial survival.
“People are hurting, especially on the North Shore,” she said. A major problem, she said, is the staggering loss of jobs, as TVRs employ a variety of services, from housecleaning and landscaping to florists and massage therapists. “The ‘trickle down effect’ is simple to trace… in one place, you’d have at least five people who would be out of work.”
So, what is the solution? Stone said, “Most people think vacation rentals should be regulated, not eliminated… good legislation would do just that.”
According to Brandon Collins, operator of the Pa‘ia Pit Stop, “The closure of some local businesses has had a definite effect on the community.”
While vacation rentals may have had an impact on Pa‘ia’s local economy, Collins attributed the cause of Pa‘ia’s economic slowdown to a mélange of circumstances, including escalating gas prices and fears of a recession mixed with a culturally significant election year.
“As a community, we do feel for those that rely directly on vacation rentals for income,” he said. “We all hope that those who regulate that industry are making the best decisions for the community as a whole without being heavily influenced by the interests of big business.”
As TVR opponents and supporters await the final word from the Maui County Council and the county Planning Department, some business owners silently cross their fingers, hoping the customers who once filled the streets of Pa‘ia Town will soon reappear.