Isle hotels 81% full as rates hit record
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Hawaii tourism executives were surprised by July's stronger-than-expected hotel occupancy, which spiked during the summer due to late bookings.
While statewide hotel occupancy fell by 5.7 percentage points to 81 percent in July compared to the year-earlier period, according to a report yesterday by Hospitality Advisors LLC, advance bookings had led officials to expect worse.
A bright spot came in the average daily room rate, which rose by 4.6 percent to a record $210 for the month.
However, statewide revenue per available room dropped by 2.2 percent to $170 -- marking the fifth straight month of revenue declines for the year.
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Hotel room prices in Hawaii reached a record high in July, despite a downturn in tourism traffic that is expected to continue throughout the year.
The average daily rate for a Hawaii hotel room rose by 4.6 percent to $210 for the month, compared to the 2006 period, according to a Smith Travel Research survey released yesterday by Hospitality Advisors LLC.
However, statewide hotel occupancy fell by 5.7 percentage points to 81 percent in July, while statewide room revenue dropped by 2.2 percent to $170 -- marking the fifth straight month of revenue declines for the year.
Still, tourism executives were surprised by stronger than expected hotel occupancy, which spiked during the summer due to late bookings -- a pattern that is expected to continue through the year.
"When consumer confidence recedes you tend to have people book late because of the uncertainty in the economy," said Joseph Toy, president of Hospitality Advisors.
The declines in occupancy in July were across the board at luxury, upscale, mid-price, economy and budget properties.
Kauai was the bright spot on the hotel market survey, recording a 5.6 percentage point gain in occupancy to 86.2 percent for July. The island's average daily rate also rose by 4.8 percent to $216, resulting in a 12.1 percent room revenue gain to $186.
Despite recent downturns, Kauai tends to have more stability in the market because it has a higher proportion of timeshare units, which are essentially prepaid vacations for their owners, versus hotels, which are more discretionary, Toy said.
Meanwhile, Maui continues to lead the state with the highest room rates, averaging $294. Maui's Wailea in particular saw average daily rates jump 13.7 percent to $489, though occupancy slipped by 3.3 percentage points to 81.8 percent. Room rates, however, boosted the island's room revenue by 2.7 percent to $240.
On Oahu, hotel occupancy fell 9.9 percentage points to 81.5 percent because of softer demand and a reintroduction of renovated properties, according to the report. However, room rates grew by 3 percent to $171, while room revenue declined by 8.2 percent to $139.
Occupancy at Big Island hotels dipped by 1.8 percentage points to 75.4 percent, while average daily rates increased by 3.6 percent to $203, resulting in a 1.1 percent rise in room revenue to $153.
"We're showing the classic pattern of a downturn," Toy said. "However, the downturns are not as steep as what they were after (Sept. 11, 2001) or in the mid-1990s when we had a prolonged recession."