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Hotels end year
with a fizzle
The drop-off in December
By Russ Lynch
ended a string of six straight
monthly occupancy increases
Star-Bulletin
Hawaii hotel occupancy slipped in December, with more than one-third of the available hotel rooms and resort condominiums running empty, according to the latest report by accommodations-management consultants PKF-Hawaii.
That made December the first down month after six months of year-over-year increases, and hotels remain concerned about the relatively low percentage of rooms they are filling. But there are signs the downturn may have bottomed out after three years of annual average occupancy levels running lower than the previous year, PKF said.
The higher flow of westbound visitors, persuaded to travel by the strength of the mainland economy, helped soften the blow of Asia's economic crisis, the survey firm said.
By itself, December wasn't a great month, with PKF's figures supporting the visitor industry's conclusion that the expected millennium rush to the islands didn't happen. However room rates were up, helping to compensate for the smaller flow of visitors.
"Hotel occupancies decreased across the board due to high-cost millennium travel packages and room rates and as a result of travelers fearing the impact for the Y2K millennium bug," said Ernie Watari, PKF-Hawaii chairman and chief executive officer.
"Many hotels throughout Hawaii were showing lower millennium occupancies with several hotels trying to make it up with last-minute discounts. However, by then most travelers had already made up their minds on how they would spend the turn of the century."
The statewide occupancy rate in hotels and resort condominiums last month averaged 62.8 percent, down 2.2 percentage points from 65 percent in December 1998. The statewide average daily room rate last month, however, was up 7.1 percent at $161.99, from $151.21 in the year-earlier month.
Waikiki hotels in December made it close to their year-earlier levels, with an average occupancy of 69.2 percent and an average room rate of $126.67, compared with December 1998 occupancy of 70.6 percent and a room rate of $125.72.
Occupancy drops were wider in some neighbor island areas, with the Big Island showing a December level of 52.8 percent from 57.3 percent in December 1998; Maui at 59.4 percent occupancy, from 63 percent; and Kauai at 54.2 percent, from 56.2 percent.
However, those islands all managed to raise their room rates, resulting in increases in a key index, the amount of money they brought in for each room they made available.
The Big Island, for example, showed an average room rate of $222.46, up 10.9 percent from $200.59 in December 1998, and Maui's average room rate was up 14.5 percent at $204.49 from $178.66.
On Oahu, however, the island-wide average occupancy level and room rate were both almost unchanged from a year earlier. Oahu hotels and vacation condominiums averaged 68.7 percent full last month, down less than a point from 69.4 percent in the previous December.
Oahu room rates averaged $125.70 last month, up only 58 cents from $125.12 a day in the year-earlier month.
