Isle hotel slump
in 11th month

Waikiki dragged down the
state occupancy rate in March

By Russ Lynch
Star-Bulletin

A slump in business in Waikiki, caused by a fall-off in tourist arrivals from Asia, dragged Hawaii's hotel occupancy down in March.

It was the 11th month in a row in which the hotels and resort condominiums across the state were less full than they were a year earlier, said the accounting and consulting firm PKF-Hawaii, which issued its monthly report today.

Statewide, the occupancy average last month was 77.56 percent, down 2.4 percentage points from 80 percent in March 1997.

Waikiki, which depends for a large part on travelers from Japan who make short trips and often don't make it out to the neighbor islands, was down 6.4 percentage points at an occupancy average of 76.8 percent last month, from 83.2 percent in March 1997.

Some parts of the state did well, but not well enough to counter Waikiki, where the majority of Hawaii's tourist accommodations are concentrated.

The Big Island, Maui and Molokai all showed occupancy increases from a year ago and Kauai was down only slightly.

"The March statistics continue to show the negative effects of the Asian economic flu on our delicate tourism industry," said Ernie Watari, PKF-Hawaii's chairman and chief executive officer.

The statewide average daily room rate continued to rise, at $145.93 last month, up 2.64 percent from $142.17 a year earlier.

But Watari noted that the average daily room rate in Waikiki was down slightly in March, showing that the hotels were adjusting in order to encourage travel when business was down.

Waikiki hoteliers have expressed some optimism after a Japan Travel Bureau report showed that bookings are up a little for this year's Japanese "Golden Week" holiday period, which runs from late April into early May.

But they say business from Japan has remained poor this month.

Although room rates at the hotels fronting Waikiki Beach remained flat at an average of around $160, Waikiki as a whole had an average room rate in March of $125.58, down $1.17 or 1 percent from $126.75 in March 1997.

The Big Island was a bright spot, with occupancy up 4.6 percentage points at 78.4 percent, from 73.8 percent in the previous March, and an average room rate of $158.96, up 3.6 percent from $153.48.

Led by the luxury resort properties at Kaanapali, Maui also did well last month, showing occupancy of 81.2 percent, up from 81 percent, and an average room rate of $177.20, up 5.2 percent from $168.46 in March 1997.

Molokai, while still the state's poorest performer, showed a big percentage increase in occupancy at the expense of a small decrease in room rates. Molokai's occupancy last month was 54.1 percent, up from 46 percent, and the island's average room rate was $78.31, down just over 1 percent from $79.14.

Kauai's occupancy slipped to 72.7 percent from 73.4 percent, and the average room rate of $165.47 was down 1.1 percent from $167.34.

Watari called the overall neighbor island strength encouraging and said it was due to a combination of strong traffic from the mainland and more direct flights.

Statewide, the resort condominiums improved their occupancy from a year earlier, while hotels saw a drop. Condominiums were 76 percent occupied last month, compared with 74.3 percent in March 1997, while the hotel segment was 77.9 percent full, down from 81.2 percent.