Hawaii's tourism industry has hit another record for the year—though not a welcome one.

Statewide hotel occupancy plunged 11 percentage points to 63.2 percent last month—the lowest level since the months following the Sept. 11, 2001, terrorist attacks, according to a report released today by Hospitality Advisors LLC.

Hotels throughout the state suffered a more than $37 million loss in September room revenue—a decline of 17.1 percent from the preceding year—and a more than $58 million drop in total revenue, including retail and food and beverage operations, to $280.7 million.

The aggregate revenue loss for rooms, retail and food and beverage totaled more than $215 million, a 9.2 percent decline, since the market began spiraling in April following the closures of Aloha and ATA airlines, according to the report.

“;The deterioration of the market accelerated in September,”; said Joseph Toy, president and chief executive of Hospitality Advisors. “;We're in uncharted waters right now. It's very difficult to say where the bottom is, but I think you can anticipate a dismal market going into 2009.”;

September's average daily room rate was $178.35, off 1.8 percent from the same period in 2007, while revenue per available room averaged $112.67, down 16.4 percent from last year.

The falloff, though not unexpected, is alarming to the Hawaii Tourism Authority, which approved last month the reallocation of $2 million into marketing, though it still must determine where to find the money.

“;It's the first step, reallocating funds to help offset this decline we continue to see,”; said Marsha Wienert, state tourism liaison. “;As of now, we still believe September will be the steepest decline this year. This is some of the most challenging times that the visitor industry in Hawaii has felt.”;

Hawaii hotels saw sharp declines across all markets and classes of properties, with Maui recording the steepest drop in occupancy, down 14.8 percentage points to 56.8 percent. Big Island hotels were less than half full, posting a 9.5 percentage-point drop in occupancy to 49.9 percent—hitting a 10-year low. Oahu reported the highest occupancy rate at 69.4 percent, compared with 79.3 percent a year ago, while Kauai's occupancy fell to 68.9 percent from 76.8 percent.

“;Overall, it's really significant. We've seen it in every market,”; said Liana Mulleitner, director of corporate communications for Prince Resorts Hawaii, which operates the Maui Prince Hotel, Maunakea Beach Hotel, Hawaii Prince Hotel and Hapuna Beach Prince Hotel.

In addition to leisure travelers, the hotels have seen substantial drops in their group market, food and beverage and golf operations, and are adjusting rates in all areas with multiple promotions and better deals across the board.

“;It all kind of trickles down,”; Mulleitner said.

Year-to-date statewide occupancy fell to 72.7 percent from 76 percent a year earlier, with the average daily room rate rising slightly to $205.22 from $200.64. Revenue per available room dropped to $149.22 from $152.55.

Statewide visitor arrivals plummeted 19.5 percent to 461,051, while expenditures fell 15.5 percent, or $141.2 million, to $770 million from a year earlier in September, as financial woes continue to plague the mainland and foreign countries, according to the state Department of Business, Economic Development and Tourism. In addition, airline seats fell by 16.3 percent in the month.

“;All hotels here are trying to fish from the same pond,”; said Danny Mynar, assistant general manager of the Hotel Hana-Maui and Honua Spa, which is offering specials such as a first-time credit totaling from $40 to $150 per day to attract mainland visitors, particularly repeat guests at lower rates, and neighbor island traffic.

Hospitality Advisors is expecting a bleak future in the near term with a recovery based on when the mainland economy stabilizes.

“;Hawaii generally lags in economic recoveries,”; Toy said. “;It's a very stressful time in the market for everyone.”;