State timeshare occupancy rate expected to rise

Hawaii's timeshare industry, which exceeded hotel occupancy by nearly 20 percentage points in the second quarter, is on track to post high occupancy figures throughout the third quarter of 2008, according to an industry study released yesterday.

While Hawaii's hotel occupancy is expected to fall from 10 to 30 percent in the fall, vacation ownership is expected to maintain high occupancy, employment growth, and rising capital expenditures, according to a study from the American Resort Development Association's Hawaii Chapter (ARDA).

During the second quarter, ARDA reported that Hawaii's timeshare occupancy hit 88.6 percent. In the third quarter, ARDA said that timeshare occupancy statewide is expected to rise to 91.9 percent based on bookings through the month of September.

"These figures demonstrate once again that even during downturns in tourism, timeshare continues to stand out as a reliable source of revenue for Hawaii's economy and provide jobs for Hawaii's people," said Mitch Imanaka, chair of ARDA Hawaii.

The booking strength of Hawaii's timeshares are an indication to ARDA that the industry has experienced some immunity from factors, such as rising travel costs and economic decline, which have contributed to the softening of the state's overall visitor industry. Since they already have paid for their accommodations, timeshare owners are highly likely to use their scheduled vacation time in Hawaii, Imanaka said.

"With the expense of their stay prepaid, it's easier for them to cover today's higher airline ticket costs and overcome other economic concerns that are impeding travel to Hawaii," he said.

A separate timeshare study, which ARDA commissioned through Hospitality Advisors LLC, revealed that timeshare was one area of Hawaii's visitor industry that was growing in 2007 and is projected to grow through 2008.

For the year, overall timeshare occupancy averaged 88.2 percent statewide during 2007, which was nearly 13 percentage points higher than Hawaii's average hotel occupancy of 75.3 percent for the year, the study said. Timeshare represents about 10 percent of the accommodations in Hawaii's visitor industry.

Timeshare employed more than 4,500 people statewide at the end of 2007, representing a 28 percent increase in jobs year-over-year for survey respondents, the study said.

"The high timeshare occupancy rates year-round essentially eliminates seasonal fluctuations in employment, which is a huge benefit to the work force," Imanaka said.

New timeshare construction and refurbishment projects, which generated $203 million in capital expenditures in 2007, are expected to grow 50 percent to $314 million by year end, the study said.

Marking time Hawaii's timeshare occupancy in the second quarter compared with hotel occupancy, and confirmed timeshare bookings for the third quarter. 2Q 2008 3Q 2008 Occupancy Occupancy Timeshare Hotels Timeshare Statewide 88.6% 68.9% Statewide 91.9% Oahu 94.4% 72.9% Oahu 91.0% Maui 84.7% 66.9% Maui 93.9% Kauai 92.8% 70.6% Kauai 93.0% Big Island 86.6% 58.1% Big Island 82.1% Source: American Resort Development Association's Hawaii Chapter; Hospitality Advisors LLC.