May's hotel figures bottom out


POSTED: Monday, July 06, 2009

Though summer is well under way, Hawaii's struggling hotel industry has little hope of rising out of its prolonged slump, according to a report released today.

Statewide hotel occupancy fell 6.5 percentage points to 61.9 percent for May from the year-earlier period, setting a record low for the month since the survey began in 1987, according to Joseph Toy, president of Hospitality Advisors LLC, which issues the report.

Fewer visitors came to the isles in May, and more of those who did opted to stay at time shares or with friends and family. The numbers also reflect the impact of swine flu, which recorded its first case in Hawaii on May 5, resulting in fewer visitors from Japan.

“;In some respects it was to be expected,”; said Toy. “;With such a weak market, the off-season (April and May) was expected to fall sharply. Compared to the weak May of last year, we were hoping the declines would narrow, but so far, they haven't. It doesn't bode well for the summer.”;

There should be a small bump this summer, according to Toy, but nothing near the peak achieved during typical busy seasons.

Average daily room rates in May also fell sharply by 12.8 percent to $165.78.

The combination of lower occupancy and room rates drove statewide revenue per available room down by a substantial 21.1 percent to $102.67 compared with the same time last year.

Visitor arrivals to Hawaii dropped 6.9 percent in May, while visitor spending decreased 15 percent, according to recent data from the state Department of Business, Economic Development and Tourism.

Visitors choosing to stay in hotels also dropped 7.5 percent, while the number staying at time shares or with friends and family increased by 4.8 percent and 7.7 percent, respectively.





        Rates at Hawaii hotels in May and the same month last year:




Big Island49.3%57.5%




        Source: Hospitality Advisors LLC



Japanese visitor numbers fell 15.5 percent in May, contributing to a decline in luxury hotel occupancy, which fell 7.5 percentage points to 64.6 percent. Room rates for luxury hotels fell 14 percent to $231.98, while revenue per available room fell 23 percent to $149.78.

In May the state also recorded a 38.4 percent decline in meetings, conventions and incentive travel.

Oahu posted the least occupancy loss, but the lowest statewide average daily room rate of $145.97 due to a broader mix of offerings.

The Big Island suffered from an 8.2 percentage point drop in occupancy to 49.3 percent in May, trailing all other markets for the month.

In the luxury market, Wailea continues to record the highest average daily room rate at $315.47. But even those rates have dropped considerably, said Toy. Wailea's occupancy rate for May was 55.8 percent, meaning nearly half of the rooms were empty.

Toy—sticking with a prediction he made in 2007—said he does not expect signs of recovery in the hotel market until at least next summer.