Hotel occupancy
down again

An accounting firm
says Asia's woes will mean
a bleak '98 for Hawaii

By Russ Lynch
Star-Bulletin

Occupancy of Hawaii's hotels and resort condominiums fell in November, the seventh straight month of declines compared with 1996, according to a new survey.

The accounting and consulting firm PKF-Hawaii today said that travel from Japan is down and although Hawaii may get a short boost in Japanese travel over the holidays because of Typhoon Paka damage to Guam, a favorite destination of the Japanese, that won't continue much into 1998.

"I think we might have a small increase from what we normally would have from what happened in Guam," said Ernie Watari, PKF-Hawaii's chairman and chief executive officer. "But I think in 1998 the increase from Guam's devastation will be negligible because most Japanese will look at the East Asian destinations instead," Watari said.

The collapse of currencies in many Asian countries has made those countries cheaper destinations for Japanese travelers, he said, while this year's more than 10 percent decline of the yen vs. the dollar makes Hawaii a more expensive spot for them.

In its monthly survey of the local hotel industry, PKF-Hawaii reported a slip in statewide occupancy to 71.15 percent last month, from 71.65 percent in November 1996.

Room rates were up, however, averaging $131.14 last month, a 6.4 percent increase from $123.25 in the year-earlier month.

Watari said occupancy on the neighbor islands was up compared with November 1996 while Oahu occupancy was down. This shows that travel from Japan has slipped since most Japanese visitors, whose stays are short, tend to stay on Oahu.

"The downturn for this month is clearly from eastbound travel, because all the neighbor islands are showing increases in occupancy and only Oahu is showing a decline," Watari said.

With Asian currencies in a decline, Japanese travelers are looking closer to home where the yen is strong, he said. "If they come to the United States, particularly Hawaii, they are buying premium dollars. They get huge discounts in the East Asia area," where the local currencies are at discounts of 30 percent, 40 percent or more.

Outrigger Hotels & Resorts, which has more hotel rooms on Oahu than any other operator, said its November figures actually were up over 1996.

"But that needs to be qualified because last year for November, actually for the fall, all our properties did rather poorly," said Joseph Patoskie, Outrigger's market research manager.

"The beachfront properties did better than last year," he said. "It's marginal but it's still better." Off-beach properties also did better.

He said Outrigger's Japanese business for November was also up a little, but the Japan market is still fairly small for Outrigger.

Patoskie also noted that Outrigger does not participate in the PKF monthly study so its figures aren't reflected in the results.

PKF's Watari said last week that he does not believe that absence makes a statistically significant difference, since the survey's results are weighted to take into account Outrigger's market of many affordably priced rooms.

PKF's report shows that the occupancy rate for Oahu fell to 76.06 percent last month from 78.54 percent in November 1996; the Big Island rate rose to 59.91 percent from 56.90; Kauai saw an increase to 71.46 percent from 68.74 percent; Maui had a 70.50 percent rate, up from 69.61 percent; while Molokai's level jumped to 38.22 percent from 28.69 percent.

The statewide revenue per available room rose 6 percent to $98.38 compared with $92.72 in November 1996, the report said.