Isle hotels post big
financial increases
Increased visitor demand has meant a jump in room rates at Hawaii hotels as occupancy rates returned to levels not seen since 2000, the all-time best year for hotel and visitor industry performance.
"For those of us that remember, this is how it's supposed to be," said Rob Solomon, senior vice president of sales and marketing at Outrigger Hotels & Resorts. "It's Hawaii, it's summer time and it's popular."
Indicators for the accommodations industry show that financial performance at Hawaii's hotels is on the upswing. A boost in visitor arrivals to the islands brought the statewide occupancy level to 72.5 percent in May, a 12.6 percent increase year-over-year, according to the latest Hawaii Hotel Flash Report released yesterday by Hospitality Advisors LLC. But more importantly, strong visitor arrivals and high occupancy numbers have increased demand at Hawaii's hotels.
"It's packed," Solomon said.
"Every one of us in the hotel industry is hearing from every long-lost friend or relative who is looking for assistance in getting a hotel room in Hawaii."
Average daily room rates rose 8 percent year-over-year to reach $142.82 per night and hotels posted a 17.2 percent increase in revenue per available room, or RevPar, which increased to $103.57.
Business in Waikiki was especially good in May as hoteliers posted occupancy gains of 12.4 percentage points over last year. Overall, RevPar for Waikiki hotels surged 28.1 percent to $86.54 during the month, while average room rates rose nearly 7 percent to $117.10.
"The jump in RevPar is nothing short of miraculous, when a 3 to 6 percent annual increase is considered good," said Karen Hughes, regional vice president of sales and marketing at Starwood Hawaii. "I'd argue that Hawaii has to be doing better than almost any other destination."
Hotels that had to discount heavily after the Sept.11, 2001, terrorist attacks in Washington, D.C., and New York can now ask top dollar for their rooms, evidence that with increased demand the Hawaii product has grown in value, said Marsha Wienert, state tourism liaison.
And, although Hawaii's economy hotels netted the biggest improvement and budget hotels had the highest average occupancy at 74.6 percent, hotels on every island and from every price class shared in the wealth, Hughes said.
"Business is fabulous," she said.
Oahu, which posted 72.5 percent occupancy in May, had the biggest improvement over last year, jumping 10.9 percentage points as Japanese travelers began rebounding and arrivals from the U.S. East and West grew substantially.
Kauai hotels led the islands in hotel occupancy, with a 3.2 percentage point gain boosting occupancy levels to 77.5 percent.
Big Island hotels, which had the lowest average occupancy rate at 61.8 percent, improved well above the year-ago results.
Maui hotel occupancy rose 5 percentage points to average 76.8 percent full.
"The demand and the desire is going to allow businesses to bring their rates back to where they need to be," Wienert said. "The end result is that we'll have a really healthy accommodations industry."
More people from the U.S. mainland visited Hawaii last month than in any other May on record, according to the state Department of Business, Economic Development & Tourism. That domestic growth, combined with a surge in travelers from Japan, led to a 17 percent increase in total visitors last month from a year ago.
"The record number of domestic arrivals, combined with the continued recovery of the Japanese market during Golden Week helped lead the industry into one of the strongest months of May, equal to our record May 2000 in terms of occupancy," said Joseph Toy, president of Hospitality Advisors.
And, at least through summer, it's not showing any signs of slowing, Toy said, adding occupancy numbers through June 19 have been running at 80.4 percent for the month.
"The data, combined with discussions within the industry, indicate that we can expect a strong summer season," he said.