While Hawaii’s hotel market started the year slowly, the pickup seen in March has continued and led to a record-setting May.
Gains in May occupancy, average daily rate (ADR) and revenue per available room (RevPAR) helped set a hotel revenue record for the month, according to a report set for release Wednesday by STR Inc. and Hospitality Advisors LLC. This monthly survey of Hawaii hotels includes 89 percent of all lodging properties with 20 rooms or more. It’s the largest survey of its kind in the state and is reported as part of the state’s official monthly visitor industry statistical report.
"As we were heading into the first quarter of 2015, there was a lot of concern because the industry outlook was much softer than we had hoped," said Joseph Toy, president and CEO of Hospitality Advisors. "January through March, we saw some negative numbers, which were replaced by recovery in April and May."
Toy said stronger consumer confidence, added flight capacity and attractively priced packages shortened the booking window and fueled rapid increases, especially from Hawaii’s core U.S. West market.
"I’m beginning to think that we’ll recover all or most of the lull," said Barry Wallace, executive vice president of hospitality services for Outrigger Enterprises Group. "Half of January, all of February and most of March was a little weaker than the prior year. But since March we’ve been seeing a very good pace of business."
To be sure, Toy reported that performance was strong in May, which saw statewide total hotel revenue reach a monthly high of $408 million, with room revenue accounting for 70 percent of that total.
At the same time, year-over-year occupancy rose 4 percentage points to 76.8 percent, and ADR grew 5.7 percent to $222.91. The gains in occupancy and record-setting ADR helped RevPAR grow 11.5 percent to $171.19, also a high for the month of May.
While results were mixed on the neighbor islands, Oahu achieved a May occupancy record of 84.2 percent, a gain of 3.7 percentage points from the year-prior May. Toy said strong visitor growth and a reduction of more than 1,000 rooms due to the renovation and redevelopment of the Ohana Waikiki West and the JW Marriott Ihilani fueled Oahu’s occupancy record.
Toy said Oahu also set May records in ADR, which rose 5.2 percent to $204.96, and RevPAR, which increased 10 percent to $172.58.
May occupancy in Waikiki alone climbed to a monthly record of 85.8 percent. Toy said the state’s top tourism destination also achieved monthly records in ADR and RevPAR, which hit $204.48 and $175.44 respectively.
"We had some good compression. I think all the way around Waikiki it was a really good month in May, which typically is not one of our best months," said Jerry Gibson, area vice president for Hilton Hawaii. "Actually, it was good all the way around the state because we had a good group base and we were able to bounce off that with transient business."
Wallace said a primarily North American visitor mix in May also helped bolster neighbor island hotel traffic since these visitors are more apt to travel outside of Oahu.
"Oahu is still going to be the occupancy leader, but some islands might actually outpace it in terms of monthly growth," he said. "Interest in the volcano has definitely helped the Big Island grow."
Gibson said the momentum seems to have carried into summer, which is looking good despite some softness from Japan and China.
"The hoteliers and the tourism bureau are pretty happy. Hopefully, that will continue," he said.
