Mahalo for supporting Honolulu Star-Advertiser. Enjoy this free story!
Hotels in Hawaii set monthly records in April for room revenues, revenue per available room and average daily room rates.
Hotels earned $276 million in room revenues, according to a report due to be released today by Hospitality Advisors LLC and Smith Travel Research. While the total was below the revenue record of $328 million reached in January, it still represented a strong start to the off-peak season, which runs from April to about mid-June.
"I think we’ll have a pretty good shoulder season, although we are starting to see a return to more stabilized growth rather than the exceptional growth that we saw over the last 12 months," said Joseph Toy, president and CEO of the consulting firm whose April survey included data from 159 properties with a total of 48,178 rooms.
Statewide average daily rate, or ADR, increased by 6.9 percent to $217.56. Revenue per available room or RevPAR rose 10 percent to $161.80. RevPAR, considered in the industry to be the best measure of hotel performance, is calculated by multiplying ADR by occupancy.
Statewide occupancy rose 2.1 percentage points in April to fill 74.4 percent of rooms. While the occupancy level didn’t break the April record of 76.7 percent set in 2006, it was near the peak.
Hotels on Oahu were
80.9 percent full, surpassing the 80 percent mark for the first time since 1990.
"We are clearly going from a pent-up growth demand period to a more normalized growth period," Toy said. "U.S. consumer confidence is still high, but pockets of
uncertainty are starting to rise. An unfavorable yen exchange rate also is beginning to influence the Japan market. As a result, we are seeing more cautious travelers, who are booking their vacations closer to the date."
While demand still was strong enough to help Oahu hoteliers reach rate growth in April, some visitors like the Hildum and TerHark families circumvented price increases by trading in time-share points for a vacation in Hawaii.
"We banked time-share points for two years so we could come here," said Ty Hildum of Illinois, who was on a pilgrimage to see the land of his birth.
Hildum said Hawaii is expensive compared with places like Jamaica and the Dominican Republic that are more often visited by Midwest travelers. However, their prepaid stay at the Grand Waikikian Suites helped make the trip more affordable.
"It worked out so we can splurge on extras," said Hildum’s wife, Kelly.
Oahu occupancy gains were due mainly to increased arrivals from the Meetings, Conventions & Incentive (MCI) market, which added 13,000 more visitors to the mix.
Oahu’s ADR and RevPAR also grew by double digits for the month, rising 13.5 percent and 18.5 percent to $197.31 and $159.62, respectively, and setting records for April.
"It was significant that the Hawai’i Convention Center held four events in April," said Barry Wallace, executive vice president of Outrigger Enterprises Group. "MCI travel books early and typically fills the larger hotels, but that’s OK: Once the big-box hotels get full, it provides a base for everyone to grow."
Beth Churchill, senior vice president of sales and marketing for Aqua Hospitality, the only hotel chain on all six major islands, said she’s concerned that rate growth may soon outpace demand.
"The rates have increased substantially," Churchill said. "We’ve pushed rate to levels that we’ve never seen before. Because of that, I hope that we don’t see any backlash from visitors who chose alternate destinations because of the price. I know that we’ve already lost groups to Mexico and the Caribbean."
Churchill also worries about whether the state has adequate hotels and room to continue to increasing the market much past this year’s anticipated 8.5 million visitors.
"Hawaii’s hotels are good, but not having many new ones is an obstacle. It would be nice if we had a new 600-room hotel in Maui or Waikiki," said Brian DiMartino, president of Kihei-based 21st Century Group, a hotel site selection company.
DiMartino said for the industry to expand, it has to stay fresh.
"We’ve got incentive business coming in where someone is picking up the check for everybody. It’s all about impressing people," he said. "To stay competitive, we have to give them a new experience. You can’t sell them something that they’ve already had."
77
CRAIG T. KOJIMA / CKOJIMA@STARADVERTISER.COM