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Saturday, July 26, 2014         

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Hotel numbers look good despite Japan lag

Japanese arrivals to Hawaii declined after the March quake and tsunami

By Allison Schaefers

POSTED:


All measures of Hawaii hotel performance increased in March, despite a strong downturn from Japanese visitors after the March 11 earthquake and tsunami.

Statewide hotel occupancy increased 4.8 percentage points to 75.2 percent, according to a report released today by hotel consultancy Hospitality Advisors LLC.

The increase would have been larger if not for the tragedy in Japan. Japanese visitor arrivals to Hawaii were down 18.7 percent in March. The drop was felt most at Oahu hotels, since Waikiki is the primary destination for Japanese visitors.

"Occupancy at Oahu's hotels had been exceeding 2010 levels up until March 11," said Joseph Toy, president of Hospitality Advisors. "In the aftermath of the events in Japan, Oahu's daily occupancies trailed the previous year's levels during most of the remaining days in March."

Even with the decline in the last half of March, Oahu's hotel occupancy grew by 3.4 percentage points to 79.2 percent, the highest occupancy in the isles.

On Maui, occupancy rose 6.5 percentage points to 78.7 percent. Big Island occupancy climbed 5.9 percentage points to 63.4 percent. Kauai's occupancy rose 6.1 percentage points to 62.2 percent.

Jack Richards, president and chief executive of Pleasant Holidays LLC, the state's largest wholesaler, said the booking pace for vacation packages that included Hawaii hotel stays was very strong until March 11.

"Bookings slowed for the remainder of March and began increasing in early April," Richards said.

More visitors from the U.S. West, U.S. East and Canada helped offset the drop in Japanese arrivals and keep room rates moving higher.

The statewide average daily rate (ADR) paid for a hotel room increased more than 9 percent in March to $190.15. Revenue per available room (RevPAR), considered by many to be the best measure of hotel performance, was up nearly 17 percent to $142.99.

The state did well in the first quarter despite the Japanese decline in March.

For the first quarter, Hawaii's $147.05 RevPAR was the highest in the nation. Hawaii's 77 percent hotel occupancy during the first quarter was the second highest in the nation behind Miami, and the state's $190.99 average daily rate trailed only New York.

David Kong, president and chief executive of Best Western International, which operates two hotels in Honolulu and one on Maui, said the brand's Hawaii hotels are doing well this year.

"The two here on Honolulu are both up tremendously this year," Kong said. Hawaii will continue to be a sought-after destination, he said. "The aloha spirit is the most important element of Hawaii's success," Kong said. "It's very difficult for any other destination to duplicate."

With occupancy improving, hotels are able to charge more for rooms.

The average daily rate on Oahu was $156.42, an increase of more than 9 percent from the previous year. Likewise, RevPAR increased about 14 percent to $123.88 from $108.76 a year ago.

On Maui the average daily rate rose about 15 percent to $265.94, and RevPAR increased about 25 percent to $209.29. Kauai ADR increased more than 7 percent to $201.18, and RevPAR grew about 19 percent to $125.13.

Big Island RevPAR rose about 4 percent to $109.11; however, ADR fell by about 6 percent to $172.09. The tsunami-related closures of the Kona Village Resort and the Four Seasons Hualalai, which just reopened, on the Big Island likely contributed to the decrease in ADR.






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