Walkthrough: After making it through Route 1 once again, you will arrive to Iki Town for the Festival being held. As you enter the town, you will run into the mysterious characters that were originally seen in the Prologue, the ones that have the futuristic design in their articles of clothing. They won't say much outside of not being from the region, as well as not understanding the point of a festival. They will leave as quickly as they show up.
At the festival, you will battle Hau once more. His Starter Pokemon has gotten a little stronger, and he's added a New Pokemon to his party as well. After the battle concludes, Kahuna Hala will provide you with the Z Bracelet he made from your Sparkling Stone. With this bracelet, you can use the Z Crystals you can obtain throughout the region in order to use special Z Moves with your Pokemon. After he does, Professor Kukui will mention what is known as the Island Challenge, where a trainer goes from island to island in hopes of defeating all of the Island Trials and Grand Trials (since there are no Gyms found in The Alola Region). Accept the challenge to begin your journey.
Trainers:
Hau (Rowlet Starter) - Level 6 Pichu, Level 7 Popplio
Hau (Litten Starter) - Level 6 Pichu, Level 7 Rowlet
Hau (Popplio Starter) - Level 6 Pichu, Level 7 Litten