Occupancy,
rates riseThe strength of the yen helped
hotels finish 2003 on a positive note
Despite suffering slowdowns in the first half of 2003 due to SARS, the war with Iraq and a weakened Japanese economy, Hawaii's hotels and resort industries posted slight increases in annual occupancy and average daily room rates for the year.
The increasing strength of the U.S. visitor market helped soften a decline in international travelers, said Ernie Watari, chairman and chief executive of the consultancy firm PKF-Hawaii LLP.
An 8.1 percent increase in December helped lift statewide occupancy by 2 percent for the year; however, hotel bookings continue to be a concern, he said.
More than two years after the Sept. 11, 2001, terror attacks, Hawaii's tourism market must still contend with periods of apprehension brought about by global terrorism and the persistent threat to national security, Watari said.
Occupancy at Hawaii's hotels and resort condominiums averaged 73.94 percent last year, meaning about 26 percent of the available rooms were empty, he said.
Despite an impressive start in January, the first half of 2003 was stagnant and ended with a dip in statewide occupancy. Hotel occupancy percentages did not show increases until the second half of the year, with the most noticeable gains observed in the mid-summer months and December, Watari said.
Among the factors contributing to the increase was a relatively strong showing for the Honolulu Marathon and the strengthening of the yen against the dollar, which provides more purchasing power for Japanese visitors, he said.
"Looking toward 2004, areas of concern are the strength of the U.S. economy and the sustainability of Japan's economic turnaround," he said.
But with the progress made in statewide occupancy and average daily room rate, Hawaii's hotel industry appears poised for improvements on performance levels, Watari said.
Room rates were up, averaging $163.79 a night statewide last month, a 4.6 percent increase from $156.59 in December 2002.
For the full year, statewide room rates averaged $149.22, a 3.9 percent increase over $143.64 in 2002.
Nearly all islands showed year-over-year increases in occupancy last month. At a 82.52 percent level, Oahu occupancy was up 6.3 percent from 77.61 percent in December 2002. Big Island occupancy was up 2.1 percent at 63.35 percent, from a year-earlier 62.05 percent.
Maui occupancy of 70.60 percent last month was up 11.6 percent from a year-earlier 63.29 percent; and Kauai's average of 66.35 percent in December was up 21.7 percent, from a year earlier figure of 54.50.
Molokai, which usually shows the lowest occupancy in the state, was still in that position with a December occupancy average of 52 percent, down from 52.48 percent a year earlier.
The average rate on Oahu last month was $114 a night, up 6.42 percent from the December 2002 average of $107.12.
Waikiki beachfront hotels did well with occupancy of 83.1 percent and an average room rate of $155.12, compared with December 2002 occupancy of 77.12 percent and an average room rate that month of $146.65.
The Big Island's room rates averaged $217.11 last month, a 3.7 percent increase from $209.32 in December 2002. Maui's average room rate was $241.09, up 5.3 percent from $228.96 a year earlier.
Kauai had an average room rate of $158.91 last month, down 1.9 percent from a year-earlier $162, and Molokai's December average room rate was $102.12 up 6.4 percent from $96.02 in December 2002.