Hawaii hotels report a dip in occupancy last month after storm, Kilauea eruption

Hurricane Lane might not have materialized into the menacing monster storm that was forecast, but all the bluster surrounding it did keep some tourists away.

In August, Hawaii hotels reported that occupancy fell nearly 3 percentage points to just over 78 percent, according to a Hawaii Hotel Performance Report recently released by the Hawaii Tourism Authority (HTA). At the same time, hotels across the state reported that their average daily room rate (ADR) increased more than 4 percent to $282. Revenue-per-available-room (RevPAR), which is the revenue a hotelier earns for every hotel room regardless of whether its occupied, increased nearly 1 percent to $220.

Jennifer Chun, HTA tourism research director, said in a statement, “August is typically a strong month for the hotel industry, but news coverage about Hurricane Lane heading straight at Hawaii, and travelers being able to utilize airline cancellation fee waivers likely impacted results in the latter half of the month.”

Mark Bratton, senior vice president of Colliers International, said the statewide tourism market is still “firing on all cylinders” and he expects much of August’s lost business will be recovered by September.

“After an event like Hurricane Lane, prices come down and hoteliers claim back some of the market. People who canceled at $500 a night will see it’s $275 now and re-book,” Bratton said.

Joseph Toy, president and CEO of Hospitality Advisors LLC, said the market reacts to bad news quickly, but that hotels will likely recover from Hurricane Lane related dampening within a month or two.

Even with the drop in hotel occupancy in August, Hawaii’s tourism industry had a strong summer season, Chun said.

“All things considered, it was a good summer overall for the hotel industry on a statewide level and especially for hotel properties in Maui County and Kauai, as well as Oahu. Hotels on the island of Hawaii suffered a downturn throughout summer because of the dampening effect that Kilauea’s eruption had on travel bookings,” Chun said.

Year-to-date through August, Hawaii hotels statewide reported strong RevPAR and ADR; however, Chun said the strength of these figures was largely built on the first five months of the year.

Hawaii island hotels, which had already seen some slowing related to the Kilauea eruption that began in May and closures of portions of Hawaii Volcanoes National Park, experienced the largest August drop in occupancy, which fell more than 6 percentage points to nearly 67 percent. Hawaii island also experienced a 2 percent drop in ADR, which fell to $246 and a nearly 11 percent drop in RevPAR, which dropped to $164.

August occupancy at Kauai hotels dropped more than 4 percentage points to nearly 71 percent. The decline was offset by RevPAR, which grew more than 2 percent to $211 and ADR, which rose more than 8 percent to $299.

Occupancy at Maui hotels in August fell more than 4 percentage points to 72 percent, while ADR rose nearly 8 percent to $371 and RevPAR increased almost 2 percent to $267.

On Oahu, August occupancy declined more than 1 percentage points to more than 84 percent. ADR grew nearly 4 percent to $254 and RevPAR increased more than 2 percent to $215.

August results contributed to some statewide occupancy softening during the peak summer months.

Still, hotels’ statewide summer RevPAR increased 3 percent to $232 and ADR nearly 5 percent to $285. That helped offset a nearly 2 percentage point summer occupancy decline that cut summer occupancy to 81 percent.