Hawaii Restaurants Struggle Ahead of Holiday Season: Rising Costs and Fewer Tourists Impact Local Businesses

Published on November 21, 2025

Hawaii, a popular vacation spot, is seeing a decline in its local restaurant business, especially in the Waikiki region. Many restaurants are struggling to survive as the landscape becomes more challenging due to rising costs and fewer tourists. Businesses were already getting ready for the busy holiday season, which is typically one of their busiest times of the year, when this situation arose. Unfortunately, these coming months appear uncertain due to a combination of external economic pressures and a decline in tourists.

Rising Costs and Fewer Customers Create Uncertainty for Hawaii’s Food Industry

Local restaurants, particularly those in high-traffic areas like Waikiki, are facing a serious decline in sales. Many establishments have reported a drop in revenue, with some even seeing sales fall by as much as 20% compared to the previous year. The situation has been exacerbated by rising operational costs, such as the increased cost of goods and a hike in minimum wage rates set to take effect on January 1st. These rising expenses, coupled with fewer customers due to a reduction in tourist traffic, are creating significant financial strain on local businesses.

The hospitality industry is traditionally one of the key economic drivers in Hawaii, especially for restaurants in tourist-heavy areas like Waikiki. However, with fewer visitors arriving on the islands, local restaurants are struggling to fill tables. A considerable number of tourists have been deterred from visiting Hawaii due to various factors, including higher travel expenses and concerns about the recent federal government shutdown. This shutdown led to widespread airline cancellations, further compounding the issue by preventing many would-be visitors from reaching their Hawaiian destinations.

The Domino Effect on Hawaii’s Economy

The challenges faced by Hawaii’s restaurants extend beyond the businesses themselves. The ripple effects of struggling restaurants are felt across the entire supply chain. Farmers, food distributors, and suppliers all depend on the steady stream of business generated by local restaurants. When a restaurant closes its doors, it doesn’t just affect the owner or the employees—it has a far-reaching impact on the entire local economy. Suppliers and farmers lose valuable clients, and restaurant workers face the loss of their livelihoods.

Furthermore, as the industry faces these difficulties, workers in Hawaii’s food service sector are dealing with the prospect of potential job cuts and reduced hours. This becomes especially worrying as the cost of living in Hawaii remains high, with many residents already struggling to make ends meet. The situation has caused many business owners to worry about their ability to retain staff while also maintaining a viable business model in the face of rising costs and shrinking customer bases.

The Impact of Government Shutdowns on Tourism and Local Business

One of the significant factors contributing to the current downturn in the Hawaii restaurant industry is the recent federal government shutdown. As the shutdown unfolded, many people who had planned vacations to Hawaii were discouraged from travelling due to flight cancellations, long waits at airports, and general travel uncertainty. The ripple effect of these changes has been felt by local businesses, especially those that rely heavily on tourism for their income.

When tourists cancel trips due to concerns over travel disruptions, the local economy suffers in multiple ways. Not only do the restaurants lose out on their customers, but the wider tourism sector also takes a hit. Hawaii, like many other vacation destinations, is reliant on a steady flow of visitors to keep the economy vibrant. With fewer visitors arriving in the state, businesses across sectors are seeing a decline in revenue, and this has made it even more challenging for restaurants in Waikiki and beyond to maintain their operations.

Challenges for Restaurant Owners as Wage Increases Loom

In addition to the drop in tourist traffic, Hawaii’s restaurant owners are also bracing for the impact of an impending increase in the minimum wage. Starting in January, the minimum wage will rise by $2 per hour, adding more pressure to an already strained industry. For restaurants operating on thin margins, this wage hike could be the tipping point that forces some to close their doors permanently.

The increase in minimum wage presents a difficult challenge for restaurant owners, who are already grappling with rising costs for ingredients and operational overhead. While the wage hike is a positive development for workers in Hawaii, it adds yet another financial burden for restaurant owners who are already struggling to stay afloat. Many owners are now faced with the difficult task of figuring out how to offset these increased labour costs without raising prices to the point where they lose more customers.

The Hope for a Community Rally

As the restaurant industry faces these significant challenges, there is a growing call for the local community to support their favourite restaurants during these tough times. The hope is that local residents will recognise the importance of their local eateries and help to sustain them through the difficult months ahead. While tourism is a major contributor to Hawaii’s economy, it is also vital that residents continue to dine out and support their local businesses to prevent further closures.

The Hawaiian Restaurant Association, along with many restaurant owners, is urging the public to shop locally, eat at their neighbourhood restaurants, and continue to support the food industry that makes Hawaii unique. When locals rally around their favourite spots, they help ensure that these businesses can weather the storm and continue to thrive. Community support has always been a powerful tool for small businesses, and it’s now more important than ever that people step up to ensure the survival of their local dining establishments.

Looking Ahead: Can Hawaii’s Restaurants Survive the Strain?

As Hawaii’s restaurant industry moves into the final months of 2025, there is hope that the challenges will begin to ease. However, with rising costs, a shrinking customer base, and ongoing uncertainties in the travel and tourism sectors, the situation remains precarious. Despite the tough landscape, many restaurant owners are still optimistic that with the right strategies, they can ride out the storm and emerge stronger. Whether it’s offering local promotions, diversifying the menu, or providing special deals, restaurant owners are looking for creative ways to attract customers and sustain their operations.

However, much of the future success of Hawaii’s restaurants lies in the hands of the local community. The next few months will be crucial, and it remains to be seen whether residents and visitors alike will come together to support local businesses and help them weather the ongoing economic difficulties. One thing is clear: without community support, the future of many local restaurants could be at risk.

Rallying Together for Hawaii’s Local Food Industry

In conclusion, Hawaii’s dining establishments are dealing with previously unheard-of difficulties. As the restaurant industry gets ready for the holiday season, it is finding it difficult to survive due to a number of factors, including growing expenses, fewer visitors, and an impending increase in the minimum wage. The local economy has been severely impacted by the situation, which affects not only restaurants but also farmers, suppliers, and employees who depend on the sector for a living. Nonetheless, there is still hope that the neighbourhood will unite around their favourite local locations and offer the assistance required to guarantee their survival during this trying period.