Hanalei, Hana Hou!

With commercial boating gone, the economy of this North Shore town has changed and evolved, but it is as strong as ever.

July, 2000

When people ask John Sargent how he climbs the hills above Hanalei, the competitive mountain biker has a simple answer: Put your head down, pedal like hell and don?t look back. This bit of mountain biking advice might also be words that Sargent lives by. Two years ago, he and his home town had to abruptly switch gears and face what seemed like an Everest-sized peak.

On June 7, 1998, his birthday, Sargent was laid off from his job as boat driver and tour guide for Captain Zodiac, the tour boat company that for nearly 20 years took visitors on short day trips to Kauai?s famed and inaccessible Na Pali coastline. Months earlier state and county officials had begun enforcing a Cayetano administration ban on commercial boating activities in the Hanalei estuary. The move, which took both environmentalists and boating operators by surprise, put a swift end to a decades-long dispute and sunk an industry valued at $7.5 million a year and employing approximately 200 people.

Two years later, Hanalei?s bustling streets and Sargent?s busy bike shop, North Shore Bike Doktor, are evidence that both town and businessman have climbed that mountain. According to numerous small business owners in and around town, Hanalei is enjoying its best economic times since before Hurricane Iniki in 1992. Cars line the streets, tourists fill its restaurants and boutiques and hikers jam the nearby Kalalau trailhead, some say as many as 500 a day.

“At the height of boating Hanalei wasn?t this crowded,” says Sargent. “We used to have our down times but now it is busy all the time. Last Christmas was the busiest that I have ever seen this place. And summer, well, I think it will be a little scary.”

Hanalei?s revitalization wasn?t easy or a bit of rocket science according to some of the town?s shop owners and business people. Sargent actually lost two jobs when boating was killed (he also repaired outboard engines), and he fell back on his biking business, which he started in 1990 as more of a hobby than anything else. In 1999, his first year full-time in the bike business, he grossed approximately $110,000. However, his net income was barely a living wage, almost a quarter of what he made in the boating industry. But this year business has been brisk and he hopes to increase his gross sales by about 30 percent.

“It?s been tough. I originally started the business because I love biking, not because I thought I could make a lot of money,” says Sargent. “This year I?m going to start offering more rentals and that sort of thing so I can tap into the tourist market.”

According to Sargent, tourists have always and will always come to Hanalei because of its beauty. What he and others didn?t realize at the time that boating was banned was that the tourists who couldn?t spend money on a tour of Na Pali would instead spend those dollars on other things like food and merchandise.

“The economy in Hanalei has evolved and changed,” says Steve Jure, co-owner of Zelo?s Beach House Restaurant and the Sushi and Blues bar. “We just changed with it. Some things you just can?t control.”

Jure opened Zelo?s nearly five years ago and with several boating company neighbors the home-style eatery became a gathering place for boaters before departure and after their tour was finished. Understandably, when the government ban took effect Jure feared the worst and for eight months his restaurant experienced a slow down, which necessitated his cutting out breakfast service.

But, business did return. Today, Jure serves about 150 to 180 lunches and 280 to 300 dinners a day, numbers similar to those that he racked up during the days of boating.

“I believe that a good destination has a variety of things to do,” says Jure. “People are discovering Hanalei?s other attributes.”

However, Mike Ching, manager of Ching Young Village Shopping Center believes that Hanalei?s good fortune has less to do with adaptive consumers than it has to do with the fact that there are just more of them today. Shortly before Hanalei?s boats stopped operating, United Airlines resumed its one-a-day direct flights from San Francisco, which had stopped after Hurricane Iniki.

“It doesn?t take a genius to figure out that there are 300 or 400 more people on the island because of that flight. There?s the source of our boom,” says Ching. “We may never know for sure how much revenue we really have lost. If we still had boating, things could be that much better.”

Nevertheless, no one disputes Hanalei?s current economic good times. Many of Ching?s tenants, especially those in the clothing business, had their best year ever in 1999 and the first quarter of 2000 surpassed even those benchmarks. He does point out that a couple of his tenants who sell things like film, suntan lotion, goza mats (things you would take on a boat ride) are only eking out an existence.

But for some the good times do have a down side. Kristine Cox and her husband Bobby opened Kai Kane, a surf clothing shop on the outskirts of Hanalei in 1994. Business has been steady and healthy, with the couple enjoying single-digit growth every year.

Hanalei?s robust economy has had some negative impacts to the town?s storeowners, increasing rents up and down Kuhio Highway. Last month, Cox had to relocate her store after her landlord raised her rent by a whopping 25 percent to about $125,000 a year.

“We are in a big upswing now but that could change at any moment,” says Cox. “Things go up and down here, and we can?t be too greedy. I can honestly say that I would prefer to have less business and less cars on the road for the whole community?s sake.”

“We had no idea what was going to happen. It?s like the stock market,” adds Sargent. “The town has changed, and we have to change with it if we want to stay here.”

You can be assured that Sargent won?t be looking back. He prefers to just put down his head and pedal like hell.


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