'We're all in trouble' without tourism, jobs

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HAGÅTÑA (The Guam Daily Post) — If the current level of sales and foot traffic in what once were bustling business areas continue through the summer and into the fall, "we're all in trouble," a business manager said.

Monte Mesa, general manager of Guam Premier Outlets, said the island's economy is driven by tourism.

And tourism has remained at a standstill for more than three months now.

The latest data released last year by the U.S. Bureau of Economic Analysis showed that of Guam's $5.9 billion economy, nearly $3 billion stems from the services sector, mostly tourism.

Gov. Lou Leon Guerrero last week said July 1 remains the opening date for tourism, but the Japanese and South Korean tourists who would normally spend vacations on Guam for several days at a time are not traveling because they're subject to 14-day quarantine rules when they return home. Japan Airlines Guam flights remain suspended throughout the entire month of July.


Hundreds of people form a line that stretched around the former Forever 21 store for a liquidation sale that started at Guam Premier Outlets in Tamuning. Photo by David Castro/ The Guam Daily Post

In prior downturns in tourism, primarily caused by typhoons, "the island might be shut down for a few days," Mesa said, but the downturn was not prolonged.

"We've always been able to recover," he said on Thursday. "But that's without Covid-19."

Mesa said, in the aftermath of typhoons, there were still people with jobs and so even without tourists for a week or so, residents were able to carry the island's businesses through the slow period.

But with the island going three months into a public health emergency, with more than 12,000 employees — in the tourism and hospitality industry alone — now unemployed and with no tourists, the local businesses that have been able to stay open or reopen as restrictions have been lifted, are still struggling.

"Without Covid-19, many can still survive, but with Covid-19 right now and people unemployed, that's a tougher challenge because people are holding on (to their money) and spending it really on food and necessities," Mesa said. "Once they pay their bills, there's not much left for spending in terms of disposable income."

He said many are watching closely and supporting the initiatives the Guam Visitors Bureau is now working on to reopen the local hospitality industry and work with partners in Japan and South Korea.

Mesa said, hopefully, GVB can reopen the flow of visitors "because if this is going to be a new normal — then wow. We're all in trouble."

Mesa said he believes Guam's tourism will recover, though it will likely take six to 12 months.

"A major obstacle to our tourism recovery efforts is the 14-day quarantine rule. This rule needs to be relaxed between Guam and Japan and Korea, especially if visitors have been tested in their home country before arriving on Guam within 48 hours," he said. Guam has lifted the 14-day quarantine requirement for travelers from Taiwan, South Korea and Japan, but that hasn't been enough to convince tourists and major airlines to resume Guam flights and travel because quarantine rules in the tourists' home countries remain in effect.

Mesa agreed with GVB leaders, who have stated that the lull in tourism gives the island's tourism businesses time to prepare and get their businesses ready to accept visitors under the new social distancing protocols.

"They must adjust their services accordingly so tourists can enjoy and comfortably spend at their respective business location," he stated.

Hopefully, Mesa said, the tourists who do come to visit Guam will enjoy Guam so much that they will spread photos about Guam to their families and friends back home.

Struggling to stay open

Mesa said smaller businesses, including the many local merchants who fill the kiosks and smaller shops at GPO, are already struggling to stay open as they don't have the deep pockets of larger companies to help them through this difficult period.

Other businesses have been closing down because there just aren't enough people shopping.

GPO is seeing Forever 21 close, though it was under a bankruptcy process before the Covid-19 pandemic. However, Mesa pointed out, "The Covid-19 global economic situation compounded their bankruptcy recovery efforts and led them to make the difficult decision to close down the Guam store."

Additionally, Chuck E. Cheese's is considering its options as new social distancing protocols are being required before the business is allowed to reopen to the public.

No jobs, no foot traffic

Maria Taitano, owner of Java Junction in Hagåtña, which recently had to close its doors, said for her family's business, the problems started with the business privilege tax increase.

"That was a big chunk of our revenue," she said. "We were promised last year, a year and a half ago, that it would go back. And then you get hit with the minimum wage (increase). And then this happens."

She and her husband, John Taitano, said that during the pandemic, they adapted, as many other restaurants did, to the new requirements. But it was too tough to stay open amid the current conditions, where surrounding businesses — on which they relied for foot traffic for their Hagåtña coffee shop — were closed down.

"People from Agana, Paradise Fitness Center, all of the surrounding shops and offices — they're closed," Maria Taitano said. "There was no foot traffic."

"This was actually a created issue," John Taitano said with frustration. "The government says, 'You guys have to close.' So OK. We conform."

He said he was told "that thousands of people are going to die," but none of that happened.

"Yet we were still mandated to close," he said, adding that even when the Taitanos were told they were allowed to reopen, the restrictions added other costs. "There's no relief. Not a single penny to say, 'OK businesspeople, you folks are going through some terrible times, we are the government, we are going to help you through this thing.'"

Still waiting

Maria Taitano said she and her husband had started applying for the Paycheck Protection Program loan, but hesitated because it was for costs for personnel – as she understood it – for when the shop would reopen.

"We have expenses from March ... that we still had to worry about," she said.

Still concerned about previous bills, the Taitanos continued with the process but stopped short of finishing when they were told there was no money left.

Then when the Guam Economic Development Authority announced its program, Maria Taitano went for it with renewed vigor.

"We're still waiting," she said on Friday.

Looking for solutions

How can the government help?

The Taitanos said GovGuam can start by paying out the federally funded unemployment benefits to those who've lost their jobs or lost hours — and these include their children and other people who used to work at the coffee shop.

"Up to today — we're grateful that we're able to help the kids along," John Taitano said, but he said they are like thousands of other Guamanians who continue to wait for their unemployment assistance.

"And they haven't had a paycheck since March," Maria Taitano said. "Now at least we can help them. What about the ones who don't have families or whose families can't help them? What happens to them?"

Mesa said the local government can help immediately in two ways:

  • Roll back the GRT from 5% to 4% — even if only for a 12-month period; and
  • Reallocate additional funding already received from the federal CARES Act to assist the medium-size businesses that have yet to be supported.

"They have helped the first tier of small businesses, now they need to consider supporting the second tier of local businesses that need financial assistance to continue remaining in business," he stated. "We've been writing about a tax relief or rollback possibility. So far, no progress from the Legislature."

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