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Thursday, April 24, 2014         

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Discounts lure more to hotels

Lower room rates help the lodging industry lure tourists and boost the state's economy

By Allison Schaefers

POSTED:


Recovery of Hawaii's visitor industry continued in October as statewide hotel occupancy increased 4.5 percentage points to 70.9 percent.

"Typically, October is well into the shoulder season (an annual slowdown between summer and Christmas), but occupancy for Waikiki and Oahu were unusually strong," said Joseph Toy, president of Hospitality Advisors LLC, which issued the report. "Last year we had the American Dental Association Conference, but it's gratifying that we had even higher occupancy above that."

More tourists have filled hotel rooms, increased hotel revenues and generally improved the state's economy this fall and winter, but hoteliers continued to pine for better room rates and a more even recovery.

The average daily rate for a room in October fell by 0.7 percent to $163.52, Toy said.

"Rates won't pick up again until 2011 and then only by about 4 percent," he said. "At this point it's really more about recovery. A 4 percent comeback from an 18 percent drop hardly represents growth." Room rates have fallen about 18 percent from their peak a few years ago.

"Although Oahu and Maui continue to show significant improvement each month, the recovery will remain uneven until the Big Island and Kauai begin to show more strength and consistency in their respective markets," Toy said.

Julius Finnern of Menomonee Falls, Wis., and other Pearl Harbor survivors and their families helped boost Hawaii hotel occupancy last week.

HOTEL OCCUPANCY

Occupancy rates at Hawaii hotels in October and the same month last year:

By Island

  2010 2009
Oahu 78.2% 75.6%
Kauai 61.2% 60.2%
Maui 67.1% 56.1%
Big Island 57.6% 55.3%
Statewide
Totals 70.9% 66.4%
Source: Hospitality Advisors

Finnern, who served on the USS Monaghan DD-354 when it was home-ported in Hawaii in 1940, returned to Hawaii for the annual survivor's convention.

"I'm 91 and I never thought I'd live to 25," Finnern said. "My ship had 12 major engagements with the Japanese."

Luckily for Finnern and for Hawaii, he lived to return to the state at least five times on survivor business.

Hawaii hotels should continue to gain occupancy as world economies get back on their feet, but the hotel room rate discounting that began 2 1/2 years ago to increase demand will remain, said Toy.

"Our margins are a lot more shallow due to labor and benefit costs, and there's been a double-digit energy inflator," said Jerry Gibson, area vice president of Hilton Hawaii and general manger of Hilton Hawaiian Village, the state's largest single hotel property employer. "I don't know that we can realize the profits that we used to have."

Waikiki led the state in occupancy at 80 percent but finished the month with an average daily rate of $148.59 as compared with $150.68 a year ago. The overall rate for Oahu hotels decreased 1.2 percent to $148.21 for the month. Occupancy at Oahu hotels climbed to 78.2 percent from the previous year's 75.6 percent, helping push revenue per available room, or revPAR, to $115.90 versus last year's $113.43.

Statewide revPAR rose 6.1 percent to $115.94.

Maui hotels had the largest October occupancy increase, rising 11 percentage points to 67.1 percent. Maui hoteliers also had the highest average daily rate, $194.24; however, it was 3.2 percent below the same period in 2009. Maui's revPAR climbed to $130.34 versus last year's $112.46.

Hawaii island recorded the state's lowest occupancy; however, the 57.6 percent figure was 2.3 percentage points ahead of last year. October's daily rate also increased by 5.8 percent to $171.65 on the Big Island, while revPAR rose to $98.87 as compared with the year-ago $89.74.

Kauai hotels saw occupancy rise 1 percentage point to 61.2 percent, but the average rate dipped 5 percent to $172.07 and revPAR fell by 3.4 percent to $172.07.






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