Isle hotel occupancy falls below standard


POSTED: Thursday, September 10, 2009

Summer was anything but hot for Hawaii's struggling hotel industry, which saw its July occupancy drop to 70.3 percent, a lower level than seen during its off-season months amid the last industry boom.

While Hawaii hoteliers did see some seasonal summer lift in the market, it fell short of normal activity for this time frame, said Joseph Toy, president and chief executive officer of Hospitality Advisors LLC, which released a hotel flash report today. And while the rate of occupancy declines began to slow in July, the drop correlated with substantial price discounting, Toy said.





        Occupancy rates at Hawaii hotels in July and the same month last year:


Big Island57.2%58.6%




        Source: Hospitality Advisors LLC

Hawaii hotels saw occupancy drop 3.8 percentage points from July 2008; however, average daily room rates (ADR) fell a more substantial 16.4 percent to $176.48. The combined decrease in occupancy and room rates caused revenue per available room (RevPAR) to drop to $124.07, a 20.7 percent decrease from the prior year.

“;This summer has been a tremendous challenge for Hawaii's hotel industry,”; Toy said. “;Hopefully the preliminary signs of the recession finally reaching some bottom will help the first quarter of 2010, but unfortunately we continue to believe that it won't be until summer 2010 at the earliest before we see a stronger foundation for a more sustained recovery.”;

Oahu posted the highest occupancy of all islands, 78.1 percent, which represented a 3.7 percentage-point loss from the prior year. However, at $149.11, Oahu's ADR was the lowest of all islands.

Maui, which reported the highest ADR at $237.90, saw its occupancy fall 3.7 percentage points to 64 percent. The Big Island's occupancy dropped by 1.4 percentage points to 57.2 percent—the worst occupancy of all islands.

Meanwhile, Kauai's occupancy dropped 8.7 percentage points to 66 percent.

Toy's hotel survey included 155 properties representing 45,866 rooms, or 81 percent of all lodging properties with 20 rooms or more in Hawaii, including full-service, limited-service and condominium hotels.