Upon arrival in Iki Town, you'll be greeted by Hala. The wise kahuna will tell you about the festival that's taking place, before encouraging you take a look around. If you're observant, you should spot Hau and his Pokemon partner up ahead. Once you've noticed, run up towards him to say "hi".
Well, well, it's time for another Pokemon battle. Hala will helpfully heal your party. After that, you'll be asked if you're ready to battle or not. We're sure you're ready. That said, it would be smart to double check your Pokemon are all in order. Nothing's worse than an embarrassing defeat, after all!
Pokemon Trainer Hau
|Popplio (if you picked Rowlet)||7||Water|
|Rowlet (if you picked Litten)||7||Grass/Flying|
|Litten (if you picked Popplio)||7||Fire|
Otherwise, hit Pichu hard and fast before it causes too much damage. With luck, it'll use Charm and Tail Whip to waste time. Don't hesitate to use Potions should your HP drop either. After Pichu's gone, the battle is the same as before.
Just be careful in case Pichu drops your Pokemon's stats too much. By the way, you can cancel out decreases (and increases) to stats by switching your Pokemon. So if Pichu's gone a little overboard, simply switch out your Pokemon after defeating it.
Succeed and Hala will give you the Z-Ring that he made from the Sparkling Stone that you lent him. With this key item, you can use powerful Z-Moves during battle. Er, if you had some Z-Crystals that is. In order to acquire Z-Crystals, you need to conquer the island trials.
About that... in previous games, your main goal was to beat the Gym Leaders and conquer the Pokemon League. Alola is different because there are no Gym Leaders and no Pokemon League. Instead, the youths of Alola set out to complete the "Island Challenge"--and, of course, you'll be one of them.
Anyway, with the festival over, Kukui kindly escorts you back home.