Hotel occupancy
falls again

A slowing of Japanese tourists sends
the isles' rate to a 5-year July low

By Russ Lynch
Star-Bulletin

The ongoing slowdown in tourist arrivals from Japan hurt Waikiki hotels again last month, bringing statewide hotel occupancy to its lowest level for any July since 1993.

Statewide occupancy last month was 75.4 percent, down from 76.2 percent in the previous July, according to PKF-Hawaii, an accounting and consulting firm that monitors hotel performance for the industry.

"Unsurprisingly this is the worst July occupancy in five years, when statewide occupancy was 71.67 percent in 1993," said Ernie Watari, PKF-Hawaii's chairman and chief executive officer. "Waikiki, which is most popular with the Japanese tourists, is also showing its worst July in five years."

Occupancy in Waikiki averaged 79.1 percent last month, down from 80.1 percent in the previous July.

The full-service beach-front hotels slipped to 80.5 percent from 82 percent in the year-earlier month. However, the cheapest bracket of Waikiki properties -- the hotels and rental condominiums away from the beach without their own restaurants -- showed a small increase to 76.4 percent, from 76 percent.

The slowdown in demand pulled down prices, which have been steadily climbing for several years.

The highest-priced properties in Waikiki, those on the beach, averaged $151.85 a night, down 1 percent from $153.37 in the year-earlier month. The low-end Waikiki properties averaged $68.76 a night, down 4.2 percent from $71.76.

That brought Waikiki as a whole to an average of $121.26 a night, a 1.8 percent dip from $123.50 in July 1997.

The statewide room rate averaged $135.80 last month, up slightly from $135.45 in the year-earlier month. That was caused by a 14.4 percent jump in the Big Island's average rate, to $156.62 from $144.86.

The Big Island did well in occupancy, too, rising nearly four percentage points to an average of 70.1 percent, from 66.3 percent in the previous July.

The luxury hotels and resort condominiums along the Kohala Coast had the highest room rates in the state, averaging $207.68 a night last month, an increase of 10 percent from $188.74 in July 1997.

July occupancy of Maui's hotels and resort condominiums rose to 72.6 percent, from 74.4 percent a year earlier, but the average Maui room rate dipped slightly to $157.25, from $158.22. The picture was similar on Kauai, where occupancy rose to 76 percent, from 75.2 percent, but the average room rate declined to $154.76, from $156.11.

Molokai, where occupancy typically is below that of the rest of the state, showed a climb to 45.5 percent, from 33 percent in the year-earlier month. Molokai also managed to get its room rates up, to an average of $73.38 compared with $70.39.

PKF-Hawaii has reported on the hotel industry since 1972, in conjunction with the Hawaii Hotel Association.

Last month's survey covered 76 hotels and 63 resort condominiums with a total of 39,166 rooms, or 55 percent of the available rooms in the state.