 and welcome to Restaurants Hawaiʻi on Think Tech Hawaiʻi. I am your host, Cheryl Matsuoka, the executive director of the Hawaiʻi Restaurant Association. And today, from the lens of Hawaiʻi Restaurant Association, we are reviewing 2022 and providing a preview look into 2023. At this time, I'd like to have my two guests please introduce themselves. Hi, Ryan Tanaka. Hi, good morning, Cheryl. How are you? Great. Could you please introduce yourself to our viewers and members? I'm Ryan Tanaka, principal and CFO at Kai Hawaiʻi, which is a structural engineering firm. I also run our investments and so I focus on diversification. We have a nice money market portfolio, an affordable housing portfolio that I created a few years ago in partnership with the city. So we did those seven projects. Last year, I acquired a commercial sewer company that I also run and then we service sanitary sewer systems, stormwater and rain gauges, do a lot of flow metering. I also have a financial consulting company, island business management that I want to operate. And then last, I'm the managing partner and CEO at Giovanni Pestrami, as well as CJ's and Roundtable Pizza at the Houttu Hōmi village. Wow, Ryan. Wow. Do you sleep? Thank you so much. I have a great wife and great children. That's how I can do it. Yes, yes. And now Greg Maples, could you please introduce yourself? Yeah, I don't know if I can follow that very well. That's pretty dang impressive. I love Ryan Tanaka and what an incredible guy he is. My name is Greg Maples. I'm the vice president of operations over culinary services at the Polynesian Cultural Center. I'm also an adjunct professor at BYU Hawaii and have enjoyed probably about five years with the board of directors at the Hawaii Restaurant Association. So that's me. Thank you. So Ryan Tanaka is our current chairman of the Hawaii Restaurant Association and Greg Maples is our past chairman of the Hawaii Restaurant Association. So if any two people know what Hawaii Restaurant Association has been doing in 2022, it's these two gentlemen. And 2022 was a very pinnacle year for HRA. And I looked up the definition of pinnacle and it is the highest point of commotion, right? So the highest point and really and truly that absolutely describes all of HRA's achievements. And at this time, as HRA moves the bar even higher, I'd like to first have our chairman Ryan Tanaka share with our viewers kind of what, looking back at 2022, what were some of the highlights that HRA was able to provide for the food service industry in Hawaii? Ryan? Yeah, it's been, it's been a very busy 2022, starting with we were able to kick off a town hall series for our lawmakers and that allows us to stay close with legislators with making sure that every session that we are not just in the forefront of what bills are being discussed, but that we really have a strong rapport with them. So we identified key candidates who are business friendly, and we brought them on and supported them. So that was one aspect. The second bucket, I would consider are the resources to restaurants. So funding restaurant resolution fund, the employment tax credit, the ERC program, the Hawaii business card, along with the Hawaii restaurant card, excuse me, and along with software technology for restaurants, our job fairs to help them with staffing, and then finally would be community engagement. So it's engaging with our city, with our state, and most recently, our partnership with the U.S. Electronics program under Brotherhood Grants and Sisterhood Grants. And I want everyone to know who is watching this show. Ryan was so instrumental in both the relationships with our lawmakers. The Brotherhood and Sisterhood Grants really was his project that he spent numerous hours not talking about even the amount of investment that he put out for the Brotherhood and Sisterhood Grants because Hawaii Restaurant Association really believes in giving back to the community. And what better way than supporting all of our youth and all of our programs here in Hawaii? So, Greg, look in the rear-view mirror. What was 2022 like? Well, you know, I just loved 2022 for so many reasons. And I want to first talk about that Brotherhood and Sisterhood Grants that Ryan spearheaded. You know, Ryan Tanaka only knows how to do one thing, one way, and that is world-class. I went to just a couple of those many events and they were so well done. What was so great to see is that we not only, not only was a world-class event, but the people that were there. I mean, we had government officials, we had business, you know, very important business people all together in the same room. We had people from the University of Hawaii Athletic, not only directors and coaches, but we had players. We had all these people under one roof. I just can't tell you how exciting it was to be a part of those. And I want to give Ryan a real big out-of-boy for that because I think that went a real, it went really a long ways to build that relationship that I think was one of the big things that happened in 2022. And that was solidifying our relationship with our government officials. Victor Lim, who is a franchisee for McDonald's, if you live in Honolulu and you don't know Victor Lim, you must have just moved here. Everybody knows Victor. He's such an incredible guy. He's been on our board of directors for so long. And I just can't say enough good about him. I spent the other evening at the 75th HRA birthday anniversary with him. And I just love that man. I just love that man. And so he worked so hard for us. And we continue to look at what's, you know, building those relationships. That was really big in 2022, getting our voice heard when it comes to legislation and setting ourselves up for the legislative session in 2023. Which, by the way, is going to run from January 19th through May 5th. That is a busy time for all of us. And hopefully a busy time for those who watch this show because in today's world, we have to pay attention to what's going on in our legislature. Ryan mentioned the second round of the HRC, the Hawaii business, the business holiday card that came out. I think there was over $750,000 that went into the food service industry from this card. This was huge, phenomenal, unprecedented, never done before in the history of Hawaii, never done before in the history of the Hawaii restaurant industry. And so to put $750,000, Cheryl, I want to put that at a boy on your back because you rode that horse like it was, I mean, yeah, you did such a great job with that. And I give you credit for that. You did such an amazing job to make sure that we rolled that out correctly. We have the restaurant revitalization fund and our partnership with the SBA. We've tried to up our relationship with them and that's been really good. They've got such great people to work with over there, don't they? I mean, the people who are doing the RRF and who came on, I think that you had some of them on this show and other people who are trying to help the people of Hawaii, they're just such incredible people. Let's see, what else? Well, you had the free hiring event that comes to my mind. The industry is struggling with employees. We're still struggling with employees. I think we'll talk about that later. But we're able to partner with the HRA, partnered with the American Job Center. And coming up on January 10th, it's a Tuesday from nine to one at the Dole Canary, by the way, there'll be another free hiring event. And so mark your calendar. If you're struggling with employees, this is another really great place that you can go. And we can't ever forget our good Mayor, Mayor Rick Blangiarity, who I came to know, a love and appreciate during the pandemic and the time that we got a chance to spend together. His pushing the Oahu's sidewalk pilot program, the dining on the sidewalk, those restaurants who were able to participate that, not only were able to expand their dining footprint, but which meant they were able to get more sales. It sounds like a small thing, but it's really, it's one of those 1% that makes a big difference. And we give Mayor Blangiarity a huge hats off. HRA also distributed over 20,000 COVID test kits. And a big mahalo goes out to Chefzone for allowing us to use their parking lot. And to Abe Kwok, who was the project leader, who is going to be taking Ryan's place in June of next year. Abe is an incredible man. We're also lucky to even know him. But 20,000 COVID kits were passed out. Those were passed out by actual people who volunteered to come and do it. And we're so grateful for that. So we've had so many initiatives in 2022, because we're coming out of COVID. Cheryl, you've been such a big part of HRA success. And I want to even say even more, if I had a dollar for every tier you shed over restaurants that were hurting, you and I would both retire millionaires. And because you care so much about it, and I want to say thank you to you. And we're in such great hands going into 2023 with Ryan, you, Abe, and some of the others on our executive committee. So that's kind of my high level overview of 2022. Thank you. Thank you so much, Greg. And another way that Hawaii Restaurant Association was able to keep our restaurant doors open and our restaurants and business was the employee retention credit. Ryan, you know how many people kept asking me, is can I apply for this? But I got PPP. Can I apply for this? And there were so many questions, Ryan. And you know, for a fact, how many businesses we were able to convince, right, Ryan? What was our motto? Just apply. What do you have to lose, Ryan? You want to touch about the employee retention credit a little bit? It's just extra federal relief that's available. And so if you haven't already applied, please do. There was a company that began calling our members and just following up with them. And I talked with them and asked how many restaurants that they've spoken with had already received it. And every single one of them did. So it reassured me that, Cheryl, you know, all these efforts were not in vain, that for those who didn't receive it, they did receive it. But he was only about 15% through his list. So I'm not sure where he ended up with, but hopefully, you know, for all those watching, if you have not already applied, there is money available for you through ERC. So please apply and hopefully you'll receive a number of checks. And, Ryan, you know, I keep mentioning it to our restaurants and businesses because it's not only restaurants, but any business that was impacted by COVID, you still can apply because it's a credit, right, Ryan? You want to kind of touch about that because it's not too late, right? Yeah. I don't recall the number of years, but you still have quite a while to apply. So it's a credit, which means that it's for payroll already paid back in 2020, 2021, and even into 2022. So you have the chance to receive three separate payments back. And it's from money's already expended, you have years left to apply for it. So there's really no loss if you haven't already applied. And there's no, you know, reduction in what you receive. So the money sitting there, it's available. Again, please apply as fast as you can to make sure you secure your money. And many times, gentlemen, you know, that's what I spend most of my day just communicating to our restaurants and our businesses that there are other ways that you can be including credits, right, on top of all the different ways that you can save money, which then helps your bottom line. And that's what Hawaii restaurant is all about, is helping our businesses and our food service industry stay in line. Okay, so now we're going to turn around and we're going to start looking at 2023. And what does 2023 bring for our food service industry and our Hawaii restaurants? Greg, you want to take it first? What does 2023 bring? Yeah, 2023, I think is going to bring a couple of challenges. One is going to be the softening of tourism, which we've already started to see. And we see projections going into the new year where they're going to be, it's going to be soft. So, you know, how do we as an HRA help support that? Clearly, we do that through continuing to promote just what you guys talked about, the ERC program, hiring events, etc. You know, the other thing that's going to be weighing, and it's a cloud that stays over our head constantly. And it's the legislation of our government. And it's the ongoing drudgery of knowing that we're headed towards $18 an hour in minimum wage. So somewhere in 2023, we're going to start to fill the effects, the full effects of the $12, knowing that at the end of the year, we're going to take another jump by a dollar. And we're going to have to start really having conversations with our government officials about what is the right dollar amount. Clearly, $18 is not the right amount. That is not sustainable. And it's certainly not something that I would support long term. So, you know, I think that those are some of the things that I think we got to start looking at. The other thing is, and this is something I've been focused on lately, and it's really important to me is we have to work really hard with our government officials to create a place in Hawaii where people want to stay and they want to live. We lost so many wonderful people during the pandemic that left our island and they're now situated and fixed in the mainland. And we're not getting them back. And a lot of them were young. They were some of our children, our grandchildren that left us. And we have got to create an environment where we have affordable housing, where yes, pay is right, but it's got to be right for everybody because you and I both know that we could easily go up to $18 an hour. It just means you're going to pay $75 for a dinner out per person, which is not going to do anybody any good. But we've got to work to try to create an environment on this island where our cakey will want to stay and we'll be able to have some of that tenured, skilled employees. So some of the things that are on my mind are those as well. Thank you, Greg. You are so right. And when we do meet with our government officials and our lawmakers, the first thing they always say is we want to hear from your restaurateurs. We want to hear from the people that's in our community, what exactly is the struggle? Ryan and Greg and Victor, they do a great job communicating what they hear from our business community. But the lawmakers say they need to hear from the actual business owners. So we really encourage people who are in business to contact us if they want to get on our government relations committee because it's so important. You do have a voice and we do need you to support the Hawaii Restaurant Association. I just want to add to that real quick, Cheryl. I know as well as anybody having owned many restaurants how busy people are. But I'm telling you, and I want to speak straight to the people who are listening to this, you have to make time for this. This is not something that you cannot make time for. You have to be willing to go and testify. You have to be willing to go and send the emails, send the text, send, testify whatever it is, and we're going to help you. HRI is going to help you realize what you need to do, right? Cheryl, you're going to be really good about saying, do these things. We're going to be sending things out to help guide you. But I promise you, more than ever, you have to be involved. Or you're simply abdicating your business and your livelihood to those who don't know anything about it. That's true. That's so true, Greg. Very well said because that's what I was trying to say. So, Ryan, let's now look at 2023 and let's just share with our viewers and members. What do you see as the chairman of the Hawaii Restaurant Association happening in 2023? Let me start by echoing some of Greg's comments because the minimum wage discussion was front and center for all of us early this year. And I want to just set realistic expectations that we can fight against it all we want. There was no way that we could have stopped it. And there's no way that I don't really see it to be very difficult for us to try to tear that back down because it's already been passed and because there's now this huge labor market that's looking forward to it. So while the restaurant owners and the employers are getting nervous, you have this contingent that's of Alice's families and people who are struggling who are saying, wow, this is great. We can finally start to pay all of our bills. What we're trying to do is find this middle of the road on the tip credit where you have tipped employees who are getting paid far more than $18, far more than $20, $25. And because of that $7 buffer, they can continue to make that type of money and we can still ratchet down the overall payroll burden through this tip credit. So what we're trying to do is just navigate through that and that's how we would soften the blow on an $18 minimum wage over time. So whether we really tackle it in January in 23 or we wait one more year, it's still on our mind. We have a brain trust that's still planning for that. And it's just a matter of getting the lawmakers on board also and giving that we have a new executive group with Governor Josh Green and Attorney Governor Sylvia Luke just really understanding with the new finance chair in the house, the best way to approach that and work with them in the upcoming, whether it's this session or the following session. So our community engagement remains very active. We will continue to work with our lawmakers in the upcoming session. We are looking at another employer credit. That's another way to soften the blow. There's other things that we can look at, whether it's the unemployment rate and trying to adjust some of those schedules and ratchet those down or whether it's trying to find ways to create subsidies or other innovation in other markets that will indirectly benefit and then eventually directly benefit not just the employer and the restaurateur but also the customer because we want to bring prices also back down. So the community engagement, I would add brotherhood grinds and sisterhood grinds. I'm going to thank Greg for coming down and supporting this program. It really has been profound. UH athletics is our professional sports team and allowing us to come out of COVID where people were scared and confused and really create this clarity on call where we can look towards the future and towards events and excitement all over again. It's a huge milestone for us. That's one side. I would then turn to our market conditions. We don't have any control over the Ukraine-Russia war. We don't have any control over interest rates and over the supply chain shortage and inflation. The fact that we're still at over 7% as early as this past month tells you that it's going to be a while. The federal fund rate has come up to 3.75%. It's arranged, but it's pretty close to that, which means that interest rates are going to continue to climb up. And so to get back down to 2% in inflation target, who knows how many more interest rate hikes we need to experience before we get there. So we're still, everyone's watching that along with exchange rates like Greg said, tourism is going to soften because exchange rates are still very unfavorable to our international traveler. And so hopefully we'll continue to attract the domestic traveler, but the international market is so large for so many of these niche restaurants who cater to whether it's the Japanese, Chinese, Korean or certain of our international travelers. So outside of a restaurant is one aspect, and then I would look inside a restaurant. So in 2023 we'll be finding new ways to pivot, to adapt to changing consumer behavior, whether it's on an ordering, just thinking about the restaurant industry of the future and how we can provide resources to our restaurateurs, to all of our members, so that they can have access to some of these most cutting edge innovative solutions that will create operational efficiency for themselves and for all of their staff. And that's a great retention tool. When staff know that I think the biggest change, we went from a labor shortage to this great resignation earlier this year to now this great retention effort where employers are looking at their employees really more as people first, like looking at their basic needs first, and then as employees second. So what a great change and move in terms of just taking care of our employees, and that's what this is all about. So if we do that, and lead by example, your customers are going to also treat them well. There was the number of instances where employees struggled because of COVID and all the different compliance requirements that were placed on them, these burdens placed on them, many left the industry, like Rick said, they moved completely out of state. So just retraining people on the de-escalation management, re-setting expectations with customers, with employees, and creating that sense of camaraderie again, that healthy culture, that care culture, that we even at HRA, we take so important and we prioritize so much. But also those three things, I would say it's making sure again just to reiterate that we're working with lawmakers, the community engagement, watching everything outside of a restaurant, and then trying to innovate within a restaurant. Those are the three main things for 2023 to look forward to. You know, Ryan said something that reminded me of something, Cheryl. You know, one of the big things that we did in 2022 is we had the Hawaii Hotel and Restaurant Show in February, and that was huge. And we have it coming up again, March 22nd, 23rd of 2023. And that is a really great place to go and talk and meet and, you know, and to get a lot of what when Ryan said we need to focus on the inside of the restaurant, it was very profound. And a lot of times those shows are a place where you can go and you can see other people of the industry. You can, you know, talk to what's coming, the latest technology, etc. Because we're going to need all of that to help us. I agree with Ryan completely. Well said. Thank you, gentlemen. Really wonderful to have both of you on the show today. Thank you so much for helping us look at 2023 as a positive way. And we're looking forward to the new year. And as always, Hawaii Restaurant Association is there to support our restaurants and the food service industry. My last comment is, you know, to our members and viewers, if you're not receiving our Hawaii Restaurant Association newsletters and industry updates, it's free. Just subscribe on our website. If you have any questions regarding anything we discussed today or anything in the food service industry, reach out to me at info at HawaiiRestaurant.org. And again, Hawaii Restaurant Association is the voice of Hawaii's restaurants and food service industry. Thank you, gentlemen. Thank you so much for your time and being part of the discussion today. Merry Christmas. Happy holidays. Thank you. Happy new year. Thank you so much for watching Think Tech Hawaii. If you like what we do, please like us and click the subscribe button on YouTube and the follow button on Vimeo. You can also follow us on Facebook, Instagram, and LinkedIn, and donate to us at thinktechhawaii.com. Mahalo.