Hawaii’s hotel industry is expected to keep hitting performance milestones in 2016, which is forecast to carry over positive trends that were present in November and through the first 11 months of 2015.
Hotels across the state set November monthly records in total revenue, average daily rates (ADR) and revenue per available room (RevPAR), according to a hotel flash report compiled by STR Inc. in conjunction with Hospitality Advisors LLC, which was due to be released today. Statewide hotel revenue reached a November high of $399 million, according to the report. Statewide ADR climbed 3.1 percent to $225.25 per night. RevPAR, the measure of what a hotelier earns for each room regardless of whether it is occupied, grew 8.3 percent to $172.77. November occupancy rose 3.7 percentage points to 76.7 percent in keeping with record arrivals during the same period.
November’s results contributed to strong hotel performance through the first 11 months of last year. Through November, occupancy climbed 1.6 percentage points to 78.8 percent. During the first 11 months of 2015, room rates rose 3.9 percent to $240, and RevPAR increased 6 percent to $189.12.
“The year got stronger as it moved along,” said Joseph Toy, president and CEO of Hospitality Advisors. “As we head into 2016, we’re optimistic, although the industry does have concerns about the stock market and weakness in the Chinese economy. We’ll have growth, just not at the same rate.”
While the pace of growth might temper, it was a November to remember for Hawaii’s hotel industry.
“At the Hawaii region of Starwood Hotels and Resorts, we are very pleased with our 2015 results,” said David Richard, regional director of sales and marketing for Starwood Hotels &Resorts, Hawaii and French Polynesia. “Despite the challenges of a very tough first quarter, we were able to achieve year-over-year growth throughout our portfolio.”
The month was especially strong for Oahu and Waikiki, which achieved occupancy, ADR and RevPAR records for the third consecutive month. Oahu’s November occupancy climbed 4.2 percentage points to 84 percent. Island hoteliers experienced a 4.5 percent rise in ADR to $212.61 and a 10 percent RevPAR increase to $178.59. Waikiki hotels alone were 86.2 percent full, an increase of 4.4 percentage points in occupancy from November 2014. Waikiki’s November ADR increased 5.1 percent to $213.02, and RevPAR went up 10.8 percent to $183.62.
“Record performance by hotels on Oahu can be attributed to the compressed room supply due to the ongoing renovation projects in Waikiki and Ko Olina and a 4.1 percent increase in visitor arrivals,” Toy said.
The reopening of some Oahu hotel inventory will alleviate some compression; however, it would be challenging to hit Waikiki’s 2015 growth rate in 2016, said Barry Wallace, executive vice president of hospitality services for Outrigger Enterprises Group.
“A hotel typically can’t sustain higher than 85 percent occupancy,” Wallace said. “While demand may push prices higher, we have to remain competitive.”
Neighbor island hotel markets, which have more room to grow, could lead this year’s growth, Wallace said.
“In 2015, the Sheraton Kona Resort and Spa at Keauhou Bay experienced one of the most successful years in the resort’s history,” said Matthew Grauso, general manager of Sheraton Kona Resort and Spa. “As we look forward to 2016, we feel our positioning in the marketplace has us perfectly poised to continue the success we enjoyed last year.”
November occupancy for Hawaii island reached 61.5 percent, which was up 4.5 percentage points from the same month in the prior year. While ADR fell 6.3 percent to $205.20, the occupancy gain offset the loss so that RevPAR rose 1.1 percent to a November high of $126.20.
Maui’s November occupancy rose 1.7 percentage points to 72.4 percent. Room rates climbed 3.9 percent to a November record of $270.70. The gains in occupancy and ADR led to a November RevPAR high of $195.99, which was up 6.4 percent from November 2014.
Kauai hotels achieved the largest occupancy gain among the islands with a 5.7-percentage-point increase to 68.2 percent. The island also set November records for ADR, which increased 8.5 percent to $222.99, and RevPAR, which soared 18.4 percent to $152.08.