Occupancy slips in September
Year-to-date performance for Hawaii remains among the top nationally
It wasn't a September to remember for Hawaii's hotel industry, which saw occupancy level off from earlier peak periods.
But year-to-date performance for Hawaii hoteliers remains among the top in the nation.
Hotel improvements and a diminishing number of rooms boosted Hawaii's hotel performance during the first three quarters of this year, even as demand for room nights fell by 3.7 percent, according to a report yesterday from Hospitality Advisors LLC.
The state's average daily rate, hotel occupancy and room revenue were second in the nation to New York, the report said.
September statewide occupancy fell 1.6 percentage points to 77.6 percent compared to the same month last year.
Year-to-date, occupancy grew a scant 0.7 percent as the fall in room supply due to conversions and renovations helped to offset a slight decline in demand, said Joe Toy, presi- dent of Hospitality Advisors.
"Hawaii's hotel market remains very strong, even though we are seeing some leveling off in room demand from the industry's peak period," Toy said.
According to the state Department of Business, Economic Development & Tourism, hotel use for the year has declined by 3.9 percent while timeshare and condo use increased by 17.1 percent and 2.5 percent, respectively.
In September, revenue per available room grew 5.3 percent to $130.11 over the same period last year.
Year-to-date revenue per available room grew to $151.24, an 11.4 percent increase.
"The ability of our hotel industry to attain current profit levels (has) enabled hotel owners to reinvest into the market, as we are currently seeing in Waikiki and elsewhere, which in turn helps Hawaii maintain its leadership positioning in such a competitive market," Toy said.
Reinvestment projects in Waikiki -- such as the Outrigger Beach Walk project, the Royal Hawaiian Shopping Center renovation, the widening of Kalakaua Avenue and refurbishment of Kapiolani Park -- have helped the market gain traction, he said.
Hawaii is experiencing a shift to higher-spending tourists as the destination moves upscale.
Waikiki had the fullest hotels in the state in September, boasting occupancy of 85.6 percent, just slightly below the same period last year, according to the report by Hospitality Advisors.
The average daily room rate at Waikiki hotels surged 13.3 percent to $154.08
As was the case with visitor arrival and spending numbers, September occupancy results were somewhat skewed by an unusually strong 2005.
Conventioneers, honeymooners and East Coast visitors drove up revenues in September 2005.
"We had several large convention groups in September 2005," said Frank Haas, marketing director for the Hawaii Tourism Authority.
Despite September's slight downturn in occupancy, Hawaii's visitor industry as a whole is expected to remain healthy, Toy said.
"Hawaii's hotel industry should be less vulnerable to any potential softening in the market due to a lack of new hotel supply than in the past, most notably the long downturn in the market that occurred during most of the 1990s," he said.