Fewer hotel rooms filled in May
Hotels in Hawaii were 69% full during May, the lowest in years
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Hotels in Hawaii in May were the emptiest they have been since 2003, even as room rates increased and overall visitor traffic was up.
Hotel occupancy rates for May came in at 69 percent -- 6.5 percentage points below the same month last year.
Hotel analysts attributed the lower occupancy to the continuing decline in Japanese visitors, as well as the increasing popularity of alternative accommodations such as condominiums, time shares, cruises and bed-and-breakfasts.
That trend has been occurring over the last three to four years, according to Joseph Toy, president and CEO of Hospitality Advisors.
There are also fewer budget- and midprice accommodations on the Oahu market, where many have been replaced by higher-end properties, resorts and time shares. Yet it was the lower-priced hotels that saw occupancy fall the most.
Statewide, revenue per available room fell by 2.3 percent to $129.06. The average daily rate, however, grew by 7 percent to $187.07.
Hotel occupancy also fell on the neighbor isles, most dramatically on Maui.
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The slump in Hawaii's hotels worsened in May, which saw occupancy rates slide to their lowest in four years.
Despite record visitor arrivals and higher daily room rates in May compared with the same time last year, occupancy fell 6.5 percentage points to 69 percent.
The occupancy rate dipped below 70 percent in 2001, 2002 and 2003, when it was at 67.4 percent, 66.1 percent and 64.6 percent, respectively.
Hotel analysts attributed it not only to the 10.3 percent decline in Japanese visitors, but also to the increasing popularity of alternative accommodations such as condominiums, time shares, cruises and bed-and-breakfasts.
That trend has been occurring over the last three to four years, according to Joseph Toy, president and CEO of Hospitality Advisors. Cruise passengers have also been staying on shore fewer nights on average.
Despite a record in May visitor arrivals, revenue per available room fell by 2.3 percent to $129.06. The average daily rate, meanwhile, grew by 7 percent to $187.07.
"We're talking about a shoulder period," said Toy. "So this follows an expected cycle."
Toy said during most of last year, the total number of rooms was reduced due to renovations and condotel conversions. But many of those rooms are now coming back online.
Hoteliers felt the impact of the 10.3 percent drop in Japanese arrivals.
More visitors, including the Japanese, have shifted their preference from hotels to alternative accommodations, according to Akio Hoshino, senior vice president of Jalpak Hawaii. Also, fewer are choosing package tours.
Barry Wallace, Outrigger's executive vice president of hospitality services, said the hotel chain has felt the impact of declining Japanese visitors in the last two months.
Outrigger's luxury hotels were performing well, he said, but the lag could be seen mostly in the midprice and budget hotels -- even as many of those properties have been phased out.
Outrigger's Waikiki Beach Walk project, for instance, replaced many midprice and budget hotels with higher-end products and time shares.
Yet Outrigger's only remaining lower-price hotel, the Ohana Maile Sky Court, recorded the chain's greatest decline in occupancy.
Economy hotels statewide experienced a fall in revenue per room by 5.1 percent to $68.25, according to Hospitality Advisors' May report.
Luxury hotels also showed a slight revenue per room decline of 1 percent to $201.30 for the month. Upscale and midprice properties, meanwhile, remained relatively flat.
But while occupancy numbers slipped, average daily rates went up across the state in May.
On Maui, occupancy fell by 9 percentage points to 71 percent, although the Valley Isle achieved a gain in average daily rates, to $237.26.
Occupancy rates fell slightly on Kauai by 1.8 percentage points to 72.6 percent, though room rates increased by 10.8 percent to $192.04.
The Big Island trailed the others in hotel occupancy, with a 7.2 percentage points fall to 60.1 percent in May. However, consistent with all the other isles, its average daily rate grew by 5.7 percent to $187.30.