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Hawaii is the #1 easiest state to operate an illegal business.
Hawaii is the #1 hardest state to operate a legal business.
How many decades have the major hotel chains been trying to do business in East Hawaii? Nope. Don't want your jobs, the tax revenue, the flights that would come directly to Hilo ITO from Japan if there was a single 3-star hotel on the East side of the island. Nope... better to have business as usual, rather than good business.
Maybe the new business numbers are goosed by all the churn in restaurants and shops catering to tourists. We've all seen these come and go: mainlanders, mostly, with dreams of being their own boss and selling to the steady flow of tourists. So like the transplants, they sink their savings into the business, and it sorta hovers for a while before getting a few bad reviews and folding.
Often the biggest factors are not the regulations or the taxes, but the inability to find good employees and the incredibly high rent. For the rent, essentially, any successful business in a successful location is going to have its profits sucked off as high rent by the commercial property owners. If the business negotiates a low introductory rent, it'll be raised as soon as the business is making real money. And because of the limited space, there is no cheaper equivalent location--so the business pays. And because rents are high in desirable locations, the property value goes up. When the property sells high, all the high rents are locked in because the new owners have to cover their high mortgage.