Firefighters Make Progress On Maui Blazes, But Damage Is Done To Island's Tourism Industry

The fire that tore through western Maui Wednesday, claiming 53 lives and at least 271 structures in the historic town of Lahaina, is 80% contained, according to local officials.

As of midday Thursday local time, a reported 11,000 people were without power. The Hawaiian government has declared a state of emergency and activated the National Guard, and President Joe Biden issued a federal disaster declaration as flames raged. 

For those who live and work on the island, one of the most popular tourism destinations in the U.S., the long process of recovery has yet to begin. Property losses are expected to total in the billions of dollars.

One of the hotels confirmed destroyed was the historic Pioneer Inn in Lahaina, a 34-room property originally built in 1901 and acquired by Best Western Hotels in 1997. Best Western confirmed the property was a complete loss.

“We are deeply saddened by the loss of the Best Western Pioneer Inn,” a spokesperson told Bisnow by email Thursday. “All hotel guests and staff were safely evacuated. We would like to express our sincere gratitude to emergency personnel for their exceptional support."

The region supports hotels belonging to many major chains, including Hyatt, Marriott and Wyndham, among others. There are numerous independent hotels and an active market for peer-to-peer and short-term rentals.

In recent years, investors have been attracted to the area's hotel properties. In 2017, Trinity Investments and Oaktree Capital Management purchased the Westin Maui Resort & Spa from Marriott for $317M.

In 2018, Blackstone dropped $1.1B for the Grand Wailea, a Waldorf Astoria resort farther south on Maui's western coast in the city of Wailea. Another of the three fires burning on the island is active northeast of the city.

Earlier this year, Outrigger Hospitality Group acquired the Kā‘anapali Beach Hotel for an unspecified sum.

Deadly wildfires have engulfed the town of #Lahaina on the Hawaiian island of #Maui where the governor has issued an emergency proclamation. Seen here is the Lahaina Square Shopping Center area. Before image: June 25, 2023, after image: August 9, 2023. pic.twitter.com/NVrso87rMb

— Maxar Technologies (@Maxar) August 10, 2023

Western Maui is a major hotel and resort mecca, with hospitality properties concentrated along the oceanfront. Those hotels, along with numerous restaurants, shops and other businesses in the region are supported by a steady flow of tourists who had, as of June, mostly recovered in volume from before the pandemic.

In June 2023, more than 276,000 visitors came to Maui, compared to more than 288,000 a year earlier, and nearly 296,000 in June 2019, according to the Hawaii Tourism Authority.

But visitors to the island are spending more. Visitor spending was $619.4M in June 2023, compared to $549.8M in June 2022 and $477.1M in June 2019, the authority reports, although some of that increase can likely be attributed to inflation.

With nonessential flights into the country strongly discouraged and tourists already on the island being evacuated, the tourism dollars so much of the local economy depends on are suddenly gone.

As firefighters work to extinguish the rest of the Lahaina fire, as well as two others burning farther inland on Maui, the timeline for the recovery and rebuilding process is unknowable, but the longer it lasts, the harder a blow the island economy will take. 

The short-term impact on the local economy will be significant, said First Onsite Property Restoration Regional Account Executive Aaron Poentis, who is a regional account manager in Honolulu. But the long-term impact is going to be largely determined by the actions of city planners as they make recovery plans for an area totally devastated.

“From a long-term perspective, I'd like to believe that people are in general are resilient, regardless of what happens,” Poentis said. “You still have a lot of things that make Hawaii, Hawaii: aquatic resources, the beaches, commercial fishing and all the other things that represent Hawaii still exist.”

UPDATE, AUG. 10, 7:45 P.M. ET: This story has been updated to reflect a new death toll as of Thursday evening.