The city’s use of Oahu hotels to quarantine those who have COVID-19 will cost hundreds of thousands of dollars in federal CARES Act funds each month and is likely to require millions.

A week ago, the city kicked off its first partnership with the 130-room Pearl Hotel Waikiki and the state Department of Health, which manages the hotel quarantine and isolation program. The nightly room cost at the Highgate property is free to those in quarantine or isolation. DOH also may cover the cost of their food, which is either ordered from the hotel or comes by way of Medical Reserve Corps volunteers who buy groceries from an approved list and deliver them to participants.

City spokesman Alex Zannes said the 30-day contract cost the city $379,375 for the exclusive use of the 130-room hotel and included a minimum of four hotel staff to support DOH and to provide towels, linens and toiletries, and cleaning of the rooms at the end of each stay. The city will use some of the nearly $400 million it was allotted as part of the federal CARES Act to pay the hotels.

“The city has an option to renew for every 30 days or commit to renting the property until Dec 30, 2020,” Zannes said. “There is a substantial discount by renting the whole property vs. the per room rates. City has rented the entire property for 30 days.”

The city’s contract with the hotel works out to about $97 per night per room regardless of whether it’s occupied.

The city plans to make deals with more hotels as part of it’s commitment to help reduce the surge of COVID-19 on Oahu, where there’s a fear continued triple-digit daily rises could overwhelm the health care system.

Honolulu Mayor Kirk Caldwell appeared on the Honolulu Star- Advertiser’s Spotlight Hawaii Facebook livestream Aug. 28 and said he is negotiating with two more Oahu hotels to get rooms for people who need to quarantine or isolate.

“We’d like to see maybe up to 700 hotel rooms ready to go as we do the surge testing and people need to be isolated, particularly multi-generational households, … provide a place for them to be isolated and cared for.”

The city hasn’t provided the Star-Advertiser with an update on any new contracts. Based on what the city is paying for 130 rooms, the monthly cost for 700 rooms could top $2 million.

Hawaii’s decision to press unused hotel rooms into this service is hardly unique. Locations like Washington, D.C.; New York City; and Los Angeles already have been using hotel rooms as quarantine and isolation centers for some time. Proponents have said it’s helped those destinations get a leg up in their battle against COVID-19.

Those living in large family groups or close quarters, who can’t quarantine or isolate, have contributed to Oahu’s recent uptick in coronavirus cases.

Newly released inmates from Oahu Community Correctional Center also have been linked to a cluster of COVID-19 cases at the Institute for Human Services in Iwilei, Hawaii’s largest homeless shelter.

DOH guidelines for using the quarantine hotels say homeless people or those who are not independent or have substance abuse or medical issues are not eligible. However, adding hotel rooms, may free up more space for them at places like the Temporary Quarantine and Isolation Center.

With statewide visitor arrivals down about 98% in July, typically the best month for Hawaii tourism, repurposing rooms also suits hotels.

Mufi Hannemann, president and CEO of the Hawaii Lodging & Tourism Association, said the industry has put new safety and training protocols in place and is ready to reopen to tourists when the community is ready. In the meantime, most open hotels have been housing first responders and front-line health care workers, National Guard, military members and their families, airline crews and other essential workers. Hannemann said if there’s a community need for quarantine and isolation centers, there are owners and operators of empty hotels that are ready to assist.

Highgate previously had considered participating in the U Experience, a startup that wanted to bring 150 students to create a “bubble” campus at the Park Shore Waikiki. But there were so many objections about forming a college bubble in the middle of a global pandemic that sources say organizers even got threats.

Officials have not named the hotels that are already partnering with the city and state or those under consideration. However, multiple sources previously have confirmed that the city’s deal is with the Pearl Hotel Waikiki, and that rooms in the Equus Hotel also have been used for quarantine and isolation purposes. Use of the Waikiki Beachside Hostel also has been discussed, along with other off-beach Waikiki hotels in ancillary locations.

While there could be a short-term impact on the hotels that are participating in the program, ultimately tourism consultant Beth Churchill said she doesn’t think it will have long-term implications for Waikiki.

“It might initially be problematic for those one or two hotels or so coming out of the pandemic,” said Churchill, owner of the Churchill Group LLC, a tourism consultancy. “But as far as what the future post-COVID, I don’t think it will be an issue. Other destinations are doing this too and people tend to have short memories. It’s likely the properties will simply rebrand themselves.”

Churchill said if anything the practice may benefit Hawaii tourism by helping to get surging COVID-19 cases under control so that the tourism economy may reopen.

“It needs to be done. We need access to a place where people can go so that they don’t keep increasing the infection rate,” she said.

Kelly Sanders, Highgate’s vice president of operations for Hawaii, declined to confirm the Pearl Hotel Waikiki’s involvement, but did confirm that Highgate had opened one of its shuttered hotels exclusively for the city and state’s quarantine and isolation needs. Sanders said the partnership has been good for the community and for the company, which was able to bring about 25 hotel staff members back to work. Workers have undergone training and so far the process has gone smoothly, he said.

However, not all Waikiki residents support tapping hotels that are in the most densely populated corridors of their neighborhood.

Brandy Aylesworth, who lives in The Palms, which she estimates is only 50 feet or so from the Pearl Hotel Waikiki, said she thinks quarantine and isolation facilities are a “great idea and necessary.” She said she’s not opposed to them, but she doesn’t think they belong in buildings like the Pearl Hotel Waikiki that are near residential housing.

Aylesworth said her 82-year-old father-in-law died of COVID-19 a few weekends ago at The Queens Medical Center. Now, the family members who lived with him also are grappling with infection, she said.

“My family would have benefited from quarantine and isolation centers. We ended up putting my brother-in-law in a tent in the backyard … because he had to isolate,” Aylesworth said. “We think that they are a good idea maybe at a military base or a more isolated hotel, but not at a property that is so close to residential homes.”

Aylesworth said the proximity to the Pearl Hotel Waikiki scares her, especially since she’s already had to take two COVID-19 tests due to family exposure and has worked so hard to stay healthy herself.

“How would you feel if you looked off your lanai and saw someone going down the hallway of the Pearl Hotel Waikiki in a hazmat suit,” she said. “It’s so close I can hear them cough. I worry about the air that I’m breathing because their air conditioning units are on 24/7. I see them out on the lanai, and I don’t think they should be there. I worry if they are taking enough precautions with the trash and linens. I just don’t feel safe.”

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Star-Advertiser reporter Dan Nakaso contributed to this story.