Isle hotels see more rooms filled


POSTED: Monday, November 09, 2009

Strong group and holiday traffic in September helped push hotel occupancy into positive territory for the first time in 19 months, but hoteliers continued to grapple with severe spending losses that are not expected to abate any time soon.

Statewide hotel occupancy rose 1.6 percentage points to 64.6 percent in September as 24,000 delegates arrived to celebrate the American Dental Association conference and three consecutive national holidays in Japan helped boost arrivals from that market by nearly 17 percent, according to a hotel report released today by Hospitality Advisors LLC.

Despite the small increase, room rates continued to decline, falling about 10 percent to $160.29. As a result, the best measure of hotel performance, RevPAR, or revenue per available room, fell almost 8 percent to $103.55.

“;RevPAR is problematic, and combined with our usual November and December difficulties, it's even more challenging,”; said Jerry Gibson, general manager of Hilton Hawaiian Village and Hilton Hawaii's area vice president.

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




By Island
Big Isle49.5%49.9%


        Source: Hospitality Advisors




Hawaii could see some pickup when the Christian Congregation of the Jehovah Witnesses brings 60,000 international attendees in three waves from Nov. 17 to Dec. 1, Gibson said.

“;They'll be our largest group of the year,”; Gibson said, “;but leading up to it, it will be difficult.”;

Even Hawaii's generally robust holiday period is expected to be soft, he said. “;There's just not as many people traveling, and rates are still a challenge.”;

During the first three quarters of the year ending in September, Hawaii's hotel occupancy slipped 5.8 percentage points to nearly 67 percent, and hotel revenue declined $682 million.

Still, Hawaii continued to compare well with its competitive destinations, ranking fourth in occupancy behind New York City, San Francisco and Washington, D.C., and trailing only New York City's average room rate, said Joseph Toy, president and chief executive officer of Hospitality Advisors.

“;It is notable that despite the fall in the market, we continue to remain competitive both in the U.S. market as well as other island destinations,”; Toy said.

Even so, it's not an apples-to-apples comparison, said Keith Vieira, senior vice president of operations for Starwood Hotels & Resorts in Hawaii and French Polynesia. “;People have to go to New York for work,”; he said. “;The choice to come to Hawaii is more discretionary.”;

Hawaii hoteliers also deal with higher labor costs and taxes, he said. “;It's more of a struggle for us here than in New York,”; Vieira said.

The neighbor islands are still in trouble, but Starwood saw visitors return to Waikiki, producing September and October occupancies that closely mirrored last year's, he said.

“;While that's not great news, it's better than both rate and occupancy being down,”; Vieira said.

Hyatt Regency Waikiki Resort & Spa has had better occupancies than many other hotels in the chain, said Brad Mettler, the property's director of marketing.

“;Demand for Waikiki as a destination is high so I feel that we should count our blessings,”; Mettler said.

On the downside, visitors are looking for bargains, and most are very budget-conscious, he said.

“;The kind of visitor who is coming because of the lower rates is not likely to have that second dinner out,”; Mettler said. “;Rates probably won't return, but at least we've got business on the books.”;