Hawaii hotel occupancy slips in first quarter
Continued softening in demand for Hawaii among visitors from the U.S. East, Japan and Canada led to a 9.2 percent decline in room demand for first quarter 2007 and halted a run-up in room revenues that begin in 2002, according to flash report released yesterday by Hospitality Advisors LLC.
During the first three months of this year, room revenues dropped to $791.1 million as hotel occupancy fell to 77.1 percent, a 6.3 percentage point drop as compared to the first three months of 2006. An increase in hotel room inventory also contributed to the drop in occupancy.
On a brighter note, statewide average daily room rates continued to climb, averaging $201.41 compared to $187.38 a year ago. However, Hawaii hoteliers felt some pressure as the drop in demand caused revenue per available room to fall to $155.23, a scant 0.6 percent drop in performance.
For first-quarter 2007, Hawaii ranked second behind New York City in average daily room rates and hoteliers posted the third highest occupancy and revenue per available room among the top 25 lodging markets.
"For the first time in five years, the decline in room demand has begun to erode the successive records in room revenue that Hawaii has enjoyed over the past several years due to increasing room rates," said Joseph Toy, president of Hospitality Advisors.
"While concern has been expressed throughout the industry, the decline thus far has not been as deep as other major market corrections that occurred in the 1990s and the early 2000s."