Occupancy drops
in isle hotels

Mainland and Japan economic
ills are showing up here

---

By Russ Lynch
rlynch@starbulletin.com

Statewide hotel occupancy averaged 68.4 percent last month, down nearly 6 percentage points from May 2000's 74.2 percent and about equal to the May 1999 level.

Room rates were up on all islands, but not enough to overcome the drop in travelers, according to the monthly report by hospitality consultant PKF-Hawaii LLP.

Statewide, the average daily room rate for May rose 4.5 percent to $154.88, from $148.22 in May 2000. That didn't produce enough revenue to make up for lower occupancy, however, and the revenue per available room averaged $105.96 statewide, down 3.7 percent from $109.98 in the year-earlier month.

"The decreases coincide with the continued slowdown of the U.S. mainland and Japan economies," said Ernie Watari, chairman and chief executive officer of the reporting firm.

Hoteliers say the summer is flat to down and with shorter times between bookings and travel, there is uncertainty about the rest of the year.

"May and June have been soft on a year-to-year basis," said Rob Solomon, senior vice president for marketing of Outrigger Hotels & Resorts.

Partly that was because business was strong last year, due to some major conventions among other things, he said.

"July had a slow start but lately has been looking better due to market conditions and competition leading to improved promotional offers that are now bringing responses," Solomon said. "We are skeptical, but still quite hopeful, for the second half of this year."

In May, Oahu occupancy dropped to 69.1 percent, from 73.6 percent a year earlier, but the average room rate was up 2.7 percent at $125.29. Big Island occupancy of 61 percent was down from 69.6 percent but that island's average room rate of $173.91 was up 5.8 percent. Maui had 71.9 percent occupancy, down from 77.1 percent, but a 7 percent increase in the room rate to $196.91. On Kauai, occupancy slipped to 68.8 percent from 79.4 percent and the average room rate rose 7.5 percent to $176.07. Molokai's occupancy fell to 42 percent from 44.2 percent and the Molokai average room rate was up 6.7 percent at $89.43.