Occupancy,
room rates fall at
isles’ big hotels

'Deluxe' properties suffer
the worst decline

By Russ Lynch
Star-Bulletin

Hawaii's biggest hotels had fewer guests and lower room rates in February, dragging down the entire industry's results, a new study shows.

Hotels with more than 500 rooms that are also in the "deluxe" category, midway between luxury and budget, had the worst February performance compared with a year earlier, according to consulting firm PKF-Hawaii which broke down hotel results by the size and class of the properties.

Those larger hotels had an occupancy decline of more than four percentage points, to 81.38 percent in February from 85.86 percent a year-earlier. The average February room rate among the big hotels was down 3.7 percent at $160.18, from $166.34 in February 1998.

Luxury hotels did better than the others, with higher occupancy and room rates; the smaller luxury properties with fewer than 500 rooms did best of all, said Ernie Watari, PKF-Hawaii chairman and chief executive officer.

His firm releases details of the hotels' performance broken down by class and size about two weeks after its monthly report on statewide occupancy and room rates. "For the month of February most hotels fared relatively well in comparison to the prior year," Watari said.

While the average statewide occupancy of hotels and vacation condominiums was down slightly (83.26 percent vs. 83.32 percent in February 1998) as reported earlier, the new report shows that luxury hotels averaged 80 percent occupancy, up from 79.22 percent in the year-earlier month.

Luxury hotels reported an average February room rate of $261.94 a night, up 2.8 percent from $254.75 a year earlier.

Hotels that PKF-Hawaii calls "deluxe," those in the middle of the quality scale, had a February occupancy average of 81.5 percent, down from 82.99 percent in the year-earlier month; deluxe hotels' room rates were down 4.1 percent at an average of $116.38, from $121.31 in February 1998.

At the low end of the scale, budget hotels had the highest February occupancy in the state, 92.49 percent vs. 90.73 percent a year earlier, but saw their average room rate slip 6.3 percent to $44.16 from $47.13.

Looking at the hotels by size, PKF-Hawaii's study shows that all but the biggest hotels had occupancy increases but the room-rate picture was mixed. Occupancy shifts ranged from an increase of more than five points in the under-100-rooms hotels, to a three-point increase in the mid-size properties and the four-point decrease in the biggest. Room rates were down 4.7 percent at the smallest hotels, up 2.3 percent at those with 201-350 rooms, up 2.8 percent in the 351-500 rooms category and down 3.7 percent in the over-500 rooms category.