 and welcome to Restaurants Hawaiʻi on Think Tech Hawaiʻi. I am your host, Cheryl Matsuoka, the executive director of the Hawaiʻi Restaurant Association. Today we'll be hearing from two restaurant tours who will share their current financial state of their businesses and why the Hawaiʻi Restaurant Card business holiday card is so important to their business, especially for the next six months. First, I would like to introduce Hawaiʻi Restaurant Association's executive assistant, Siobhan Garcia. Hey, Siobhan! Hi, Cheryl. Thank you. Yes, I wanted to introduce our two guests today. We have Mike Palmer, who is the managing partner of Hoʻokipa Partners, better known as the Kohiu Avenue Food Hall in International Marketplace, and Michael Skadelsky, who is the director of operations for Eggs and Things Hawaiʻi. Welcome to both of you. Aloha. Good afternoon. Thank you, Siobhan. To our viewers, in 2020, the state of Hawaiʻi launched the Hawaiʻi Restaurant Card program, which infused more than $75 million into Hawaiʻi's restaurant industry. Today, thousands of restaurants remain in survival mode, and they need your support. Once again, as they struggle with reduced foot traffic, supply chain issues, and employee shortages to help promote and provide immediate financial assistance to our restaurant industry and the whole food supply chain, the Hawaiʻi Restaurant Association and American Savings Bank is promoting and launching the Hawaiʻi Restaurant Card Holiday Business Card program. This is a way to give back and support local eateries during the holidays. The cards are available to purchase by businesses and entities to use as employee holiday gifts, client appreciation awards, and just in general to use if you're taking people out like your employees out for their Christmas breakfast. This is a great opportunity for businesses to step up and support local restaurants while rewarding their employees and thanking clients during this holiday season. Now, the Hawaiʻi Restaurant Association sent out a survey, and I wanted to give our viewers some background. This was the impact of the Delta variant. The survey was taken from October 21st to October 26th, and the results were worse than the Restaurant Association expected. Out of 192 survey responses from restaurant owners that collectively, of course, own hundreds of different restaurant locations, in September and October, 80% of the restaurant survey saw a revenue drop by 30% or more. 37 have lost over half of their revenue. At the beginning of September, only 60% of the restaurant owners expected, 60% of the restaurant owners expected to lose over 30% of their revenue. The main factor is the sale, the main factor reduced sales in all the restaurant is lower foot traffic, which includes less visitors to the island and people in general just staying home because of the ongoing health crisis. Our visitor arrivals dropped 27% in September compared to July. So, the Hawaiʻi Restaurant Card will really help our Hawaiʻi restaurants, our whole food chain distribution, supply chain, and farmers, and we're asking our communities kukua and to please purchase a Hawaiʻi Restaurant Card. So, I'm going to first start off with Mike Palmer. Hey, Mike, share a little bit about the history of Cahill Avenue Food Hall. When did you open your concept and how was the month of October 2020-21 for your food hall? Thank you. Thanks again for having me. Yeah, we opened in April 1st. It was formerly known as the Street Food Hall by Michael Mena, and it actually stayed open throughout COVID and did the best it could from using takeout delivery and just relying on local business because as we all know, Waikiki was a ghost town. We're right smack in the middle of Waikiki, the international marketplace. So, normally an absolutely gangbusters location to have, but nobody was immune and unfortunately, as a result of other factors, but primarily the epidemic, the pandemic, they had to shut down and my business partner and I with Hoʻokipa Partners, we had an opportunity to take it over, rebrand it and reopen it, which might sound crazy in the midst of the pandemic, but it was an opportunity we saw and were optimistic about the future. So, we reopened, hired back about 15 of our original employees and open on April 1st with the intent of opening slowly as things came back. Of course, we thought that would have been months ago and unfortunately, you know, things did pick up in summer as we all know, we had an actually pretty good summer by Hawaii standards. A lot of mainland tourists were coming, they were spending money in restaurants and a lot of restaurants were understaffed, but we ended up building our staff up to 50 people. We had initially had to lay off 150 when we closed down. So, that's the number we're looking at when you think of economic impact, opening back up, you know, I will need to hire 50 to 100 more employees when things are in full swing and I can't wait to do that. Now, come Labor Day after the Delta variant and, you know, tourists being told, please don't come to Hawaii, things hit us hard and we saw 40% dip after Labor Day from the whole summer numbers we were having and had to cut hours of employees which was tough because they had all been on unemployment and then their benefits were running out and, you know, as you know, the economic impact of that isn't great, but our goal throughout this has to not then to not lay any employees off because we know how hard that is. So, even though we're losing money on most days, we're staying open to try to at least keep our 50 current workers employed and being optimistic about restrictions loosening and tourism coming back hopefully sooner than later. But yes, not much change since Labor Day, it's been 40% down and haven't seen much change, it's been kind of a flat line. And as you all know, normally there is a dip, the shoulder season, in Hawaii, but we have the international gas to fill that in. So, you don't see a 40% dip, you see a 5% to 10% dip from summer numbers. And like I said, being optimistic that December is great, it's usually the third or fourth busiest month in Waikiki and this restaurant card will be a huge help, I think, to stimulating the economy and helping not only employees, but just the economy in general and bouncing back. Thank you so much. You know, I always say, Mike, I always say restaurant tours are entrepreneurs opening up during a pandemic in April, knowing what we went through and he still opens his doors. Congratulations. Thank you. Thank you. So, Michael, share with us and the viewers the history of eggs and things, how many locations, and how was October 2021 for your restaurants? Yeah, eggs and things as the company's been around since 1974. It's a few years before I was born. It was a husband and wife team, they had one location in Waikiki. They actually had a location in Kaneohe for a little while, but in 2008, a new group of people took it over, the husband and wife or the wife retired, sold it to them. That's exactly when I came on in 2008. And we just had no locations, actually, we reopened on Saratoga Road in Waikiki, and about two years later opened another one in Waikiki. And then right now we have four on Oahu, including one in Colina, that's our latest one. And we have one in Guam as well. Yeah, but so, you know, things were really good. I mean, like Mike mentioned, we understand and we prepare for the seasonal, especially in the tourist areas. But we just went through our numbers for September, October, clearly, like looking at everything, labor, cost of goods and everything. And yeah, maybe our sales didn't drop quite as drastically as a lot of the people surveyed, but there was a significant drop. Very difficult for all of our most of our locations to stay in the black. And one thing like I noticed that, and Mike, you understand like as an operator, like there's a basic amount of people you need to open and select labor in October was extremely high. And, you know, like you don't get a discount or rent if your base rent at least when things are slower. So, you know, once the gross sales drop, it kind of makes everything, all the problems exasperated a little bit. So we saw that both in September, October. But yeah, right now in November, we're seeing a little bit of an uptick. I actually spoke to a couple of customers just this past weekend. And they were saying like they held off when EGAY told them to stay away, mostly because they weren't sure what would be open or closed. And so now they're coming back, they kind of just delayed their trip. So we're hoping, like Mike said, that during the holidays, we get a bigger bump. And hopefully maybe some restrictions are eased a little as well. So how many showed that with the restaurant card? We're expecting a pretty good holiday season. I think our workers could use that. That's awesome. And Mike Palmer, you know, the Hawaii restaurant card infused 1.5 million into our local Hawaii restaurant economy back in 2020. This year, the goal is to infuse 2.5 million into the much needed food supply change. So could you share with us some of the partners that Coheo Avenue Food Hall financially supports? Yes, absolutely. Yes. And I hope we hit that bogey that you just threw out there, 2.5. That would be amazing that we would take it because the last restaurant card had a great impact. We saw a lot of locals using it and coming in. And it was a great program. We were all for it. And I didn't mention before, so the Coheo Avenue Food Hall were actually 10 concepts. We own all of different foods from Mexican to pizza to burgers to Greek to ramen. So as a result of the way the economy is, we haven't fully opened everything because, like Michael said, you got to have employees to staff every single concept and chefs to cook for every concept. So to open everything up when the tourism is where it's at now, we'd go under real quick. So we've been feathering the gas pedal, as I say, to get us back. But Cheryl, as you were saying, the impact of that spending into all the restaurants in Hawaii has a very far-reaching impact. I think sometimes people don't realize with restaurants employing more than 15% of the population in the state. That's a huge number. I mean, the only people up there, the government, I think, the military and restaurants and hospitality. So it's such a huge far-reaching impact. So obviously the business owners, the landlords getting paid on time and the employees, of course, that is the biggest impact, I think. But a lot of people don't think about the vendors. Our vendors are all struggling. Our distributors, they rely on us as their customer. And when our business is hurting, there's hurting as well. So I mean, it's very far-reaching. There's so many industries and impacts. Our maintenance, I'm sure Michael can relate. Even our routine, preventative maintenance we do in our restaurant with all of our equipment, we've had to get smart and even it's just like your house. Sometimes you let things go because you can't afford it. And it's the same for restaurants. You let certain things go because you have to choose now what I'm going to fix. And Cheryl, you can relate to this too, right? You dread it when a major piece of equipment goes down because it's not cheap to fix it. You got a compressor replace and the labor, but those vendors rely on us. So again, this restaurant gift card is a great idea. And I think everybody could really help the restaurant industry and the economy as a whole by using it and buying it for employees as rewards, as bonuses, because it has a really far-reaching impact. It's not just going into the pockets of the restaurant owners. Thank you so much. So I'm going to go ahead and ask Siobhan if you have any questions for the gentleman. Yes, both my questions will be geared to both of you, but we'll start with Michael Skedelski. So we talked a little bit about the survey and how would you say you related most to what the survey came out with in terms of what you would have answered should you have taken this survey? Yeah, I think like everybody, we saw a pretty strong summer and that maybe caused us to hire a lot of people and then seeing the drop-off happen that quickly. And I think it was just a number of factors that happened at that same time, right? We had the numbers high, so I think a lot of the locals were afraid to go out, dying out, and then safe access started and a couple of other things I think added to that. So I think we saw a bottom line get it. Like Mike mentioned, we have to reduce hours. Yeah, so I can relate. When I saw those numbers, I was a little shocked it was that high, and especially the one that's like 37% or 50% or more, but I heard that from our vendors too because some of them were like, well, you guys should hear like people used to order three times a week to order once every two weeks now. And so the distributors and the vendors, they can see it probably a lot quicker than even we can. Yeah. Wow. Yeah, it's hard to hear that we have this big of a dip, and I guess this restaurant card is welcome news at really great time. So we're all really looking forward to it. Mike Palmer, you touched on it a little bit too as well as far as how you're able to relate to that survey. Can you explain a little bit more of in what way? Yes. I think the reminder we have when we get a survey like that is that we're not alone, we're in this together. And not even just the restaurant industry, the hospitality industry, and every industry is impacted by what's been going on. And we have to come together and get through this. There is light at the end of the tunnel. And I think staying positive is important, but it really was striking to me when I look at those numbers and see, even though I always knew it, I wasn't alone, sometimes you could say, oh, well, in Waikiki, it's different than outside, but it isn't. Cheryl and Michael both have restaurants outside of Waikiki, and they're equally impacted. And I think a lot of people don't realize that people's dining habits change. Their habits in general changed as a result of what's going on. And more so in Hawaii, I think, than anywhere else, because of the restrictions are so strict, which I mean, thank God, we had such low numbers for the most of it. But I think it's time to open up. We've got the best vaccination rate in the nation. Good job, everybody. And our employees are safe and vaccinated. So I think it's a very safe environment now. But again, it's the reminder of the survey was, wow, it's really hurting so many people in Hawaii, so many business owners, so many employees, so many vendors that are experiencing the exact same thing. And the ones that are still open, it's amazing, because I know what I'm going through. And I can't imagine looking at financial statements and what's going on with other restaurants, because it's mind boggling if people knew. When I tell people, we lose money every day, we're open five days a week and make money, maybe on two of them. They don't understand how that's possible. But the profit margins are so slim in this industry. It's a wonder why anybody gets into it. But it's more of a passion and a love for serving guests and having a great experience around great food. And I think that's what drives us all that we know we're going to get back there. But it is nice to know you're not alone in that we're in it together. And I think the survey was just a huge reminder of that when you saw the responses of everybody and it's heartbreaking, too. Yeah, completely agree. It was very eye-opening. I don't think people realized what a dip in sales and everything that every restaurant experienced. So I think it was good for the public to kind of hear a little bit, too, what these numbers are and how so many factors are affecting all of our businesses around us. Thank you for that. So my next question, Michael, let's kind of maybe focus on some good for a little bit. We did see with the previous three cards because this is now 4.0. With the previous cards, we did see a lot of restaurants offering incentives. Do you plan to do the same sort of thing that you did in the past to really entice those card holders to come in and spend it at your restaurant? Yes, we do. We haven't finalized anything yet, but we have pitched a few ideas to ownership. And I think we definitely will offer something. And I think the way we see it, too, is the beauty of it is the people receive the card, they get to use it for takeout, dine in. So I think it's very versatile in the way that even if they're unvaccinated or they don't have their negative tests or whatever, they can still do takeout. And for us, like Cheryl was mentioning, like, it's really helpful to know that we try to focus on using much local products, like we use only local eggs, local beef, and to know that trickles down towards everybody. Even our vendor strategic, we try to use more local companies like Waihata, the Otani, Kremium are people who are invested here. So to see that helps them as well. Hopefully, yeah, this one is successful, the first two or three. But yeah, I think it's a win-win for everybody. And also, I love the fact that even if, you know, you worry about when you give a gift card to someone, if they lose it, they don't spend it, what happens, that balance. At least this one, you know, goes to a good cause if it's unspent. Yes, absolutely. And, Mike, would you say the same thing you, you know, not expecting you to give us your exact details yet, but you plan on doing the same thing so people come into Cuyahio Avenue Food Hall and spend their dollars over there? Absolutely, yes. I think, you know, that we are competing for the same pool of guests and customers. But again, there's plenty, plenty of love to go around, as I like to say, but we certainly want to give people incentive to choose us to come. And especially in Waikiki, a lot of locals tend to avoid it. You know, you hear how people say, I stay away from Waikiki, but I'll tell anybody who's out there is listening, this is the best time to be in Waikiki. You'll never see it like this again. You know, there's way less foot traffic. And I took my son to see the U.S., the Mighty Mo last weekend, and I couldn't believe how empty it was. And it was, I was sad for the volunteers and the non-profit. But, you know, at the same time, I'm like, wow, when could you ever be on the Mighty Mo with, you know, a handful of people on it? Never, you know? But yes, we will absolutely offer some incentive. And, you know, why wouldn't we? You know, we want to get people to use that and get out and enjoy restaurants in Hawaii and the entire experience. That's great to hear. You know, it makes their dollar stretch that much further. So that's everybody go eat at Cuyo Avenue Food Hall and eggs and things. Thank you, Kaku. Yeah, thank you, Kaku. And rainbow driving. Can't forget those. Well, you know, I want to thank you both. I know our time's not done, but I did want to say thank you. I also want to say a big thank you to American Savings Bank and also the Chamber. We're all kind of in this program together and we're really grateful that they have continued with this initiative. As we've heard, it sounds like it's going to do amazing things as it did in the past. So thank you to everyone for supporting the restaurants in the food service industry. Back to you, Cheryl. Thank you, Siobhan. So we were talking prior to jumping online and we talked about who can actually buy the card and why. And it's really due to the bank regulations. So businesses, organizations and entities because you have your tax ID numbers may purchase the Hawaii restaurant card business holiday card. So we're hoping that every restaurant, every distributor, every business, every organization, entity, you know, purchases the cards for holiday gifts for their employees or their clients maybe buy a couple extra as you take people out for the holidays. You can use it yourself. And perhaps employee incentives, the first quarter sales, they can use it because the card does not expire until the end of June 2022. So you have six months to use the card. So I was going to ask Michael and Mike, let's start with Michael first. As a business owner myself, I'm always taking clients out and I have employees, I have business partners, you know, we want to encourage them to go to eggs and things right and take people out. And I didn't even realize and that's my fault because your eggs and things that I want is where I go that they even have alcohol. And so you can put alcohol and tips and the whole, you know, the tips and tax, everything can go on this because it's a pure debit card. So let's think of different people and different organizations that could use it as incentives and gifts. Do you have any other ideas? Yeah, I think we've already thought about, you know, pre-pandemic, we would always have employee of the month, employee of the quarter per location. So these would be great to have for that. Of course, you'd have to try to give it out by April or something. We don't have enough time to use it. Yeah, and there's probably a few vendors who really took care of us who actually like really were understanding throughout the pandemic like some of our social media people, they really like like, hey, don't pay us for six months. We understand we're just going to keep doing it. And things like that, I think would just be a good thank you holiday gifts as well. Yeah, I think for us, we definitely would like to try to use it to get back to having that employee of the month, employee of the quarter and just a good thing to have especially for thank you for some employees who are extremely dedicated like our management team throughout COVID. I think those who are salary who worked through the whole thing are probably like, wish they had that little time off that some people had. Because yeah, when we talked to them now, they're like, man, it was a different pandemic for us to work throughout the whole thing. It's people who brought even our employees. So I think it would be a good thank you for them as well. Thank you. Thank you, Michael. And I just got the two minute warning from Eric. So I'm going to have to wrap this up. But I also wanted to remind people that it doesn't expire until the end of June 2022. So if you have a birthday, let's say a person's birthdays in January, February, March, it's a great birthday gift. There's graduations. A lot of people graduate during December from the universities. It's a great graduation gift. So I just want to remind everybody that the Hawaii restaurant business holiday card, right now you can purchase them. And if you purchase them by November 26, you will receive delivery by December 10. You have to order them through the ASBHawaii.com forward slash HRC. So ASBHawaii.com forward slash HRC or email me at info at hawaiirestaurant.org. The denominations are $25, $50 and $100. No minimum order, no maximum order. And again, as I mentioned earlier, the expiration of these cards is June 30, 2022. So as you heard today, to our viewers from two restaurant tours, restaurants are still struggling. And we need your community support. Please, if you're able to support the Hawaii restaurants and the Hawaii food service industry by purchasing a Hawaii restaurant card, business holiday card, any support would be appreciated. And again, the Hawaii Restaurant Association is the voice of Hawaii's restaurants and food service industry. And we look forward to dining together again. Thank you. Ma'a'la.