Isle hotel room rates rise 7.5%

The state's hotels generated a record-setting $3.1 billion despite fewer guests

Hawaii's hotel room rates jumped 7.5 percent year-over-year in December, due in part to the Honolulu Marathon and a brisk holiday season, according to the latest hotel report released yesterday by Hospitality Advisors LLC.

Room rates grew to $224.70 -- a new record for December. While statewide occupancy dropped by 1.7 percentage points to 70.6 percent, revenue per available room rose by 5 percent during the month to $158.58.

Occupancy on Kauai -- the only island to record gains in occupancy and room rates in December and the full year -- rose by 5.1 percentage points to 68 percent, while room rates jumped by 9.5 percent to $232.03.

Part of the reason for the island's gains is the increase in timeshare and resort condominium conversions, which has decreased the number of traditional hotel rooms, said Joseph Toy, Hospitality Advisors president and chief executive officer.

"The traditional hotel product is less, so you therefore have hotel demand compressed into a smaller inventory base," he said. "And timeshare does extremely well, so it forms a very strong base for the island."

Meanwhile, Oahu hotel occupancy declined by 3.1 percentage points to 73.3 percent, though room rates increased 7.4 percent to $185.92. Maui's occupancy dipped by 0.6 percentage points to 71.7 percent, but room rates rose 6.2 percent to $294.71. The Big Island's hotel occupancy fell by 2.4 points to 60.6 percent, while room rates jumped by 9.8 percent to $249.97.

For the year, Hawaii's hotels generated more than $3.1 billion in 2007, matching the record in 2006 despite declining visitor arrivals.

A record 6.8 percent increase in average room rates statewide to $199.87 more than offset the 4.2 percentage-point drop in occupancy last year, the report said.

For the fourth year in a row, Hawaii hotels recorded a new all-time high in both the average daily room rate and revenue per available room, which rose by 1.2 percent to $150.49.

Overall statewide room demand dropped by 6.1 percent last year to 15.6 million room nights sold, resulting in a 4.2 percentage-point occupancy decline to 75.3 percent.

However, Hawaii maintained its place in the top 25 national lodging destinations at No. 2 behind New York City in occupancy, average daily rate and revenue per available room, according to Smith Travel Research.

Hotel occupancy

Occupancy rates at Hawaii hotels in December and the same month a year earlier:

	2007	2006
STATEWIDE	70.6%	72.2%
BY ISLAND
Oahu	73.3%	76.4%
Kauai	68.0%	62.9%
Maui	71.7%	72.3%
Big Island	60.6%	63.0%

Source: Hospitality Advisors LLC