Visitors looking for hotel alternatives, study finds

Growth in visitor arrivals has outpaced hotel usage in Hawaii, according to a recent survey commissioned by the Hawaii Tourism Authority, which shows consumer demand for alternative accommodations is growing.

Hotel occupied room nights per Hawaii visitor arrival have dropped 12 percent during the past five years as home and vacation rentals have grown, according to the study by JLL, a Chicago-based consultant with an office in Hawaii. HTA released the JLL study last month.

The share of visitors who stayed in a rental house increased to just over 7 percent in 2015 from about 5 percent in 2010. JLL said only a small share of visitors who booked alternate accommodations attributed that decision to sold-out hotels.

JLL completed its study in December based on findings from 2016 email surveys of approximately 33,000 Hawaii visitors and 55,000 Hawaii homeowners. As many as 9 percent of the Hawaii homeowners told JLL that they have rented their home during the past several years. JLL expects that number to climb to 12 percent over the next five years.

This new research adds context to a battle playing out in the state Legislature over whether vacation rental growth is good for Hawaii tourism. Supporters say vacation rentals benefit statewide tourism by adding capacity and increasing visitor spending and tax collections. But some critics say turning homes into vacation rentals makes it more challenging to ensure that visitors are safe and that they have a quality experience. Others, such as Unite Here Local 5, have argued that vacation rentals deprive union workers of good-paying union jobs and benefits.

“The variety of visitor accommodations is a reason that visitors choose Hawaii,” said Daniel Nahoopii, HTA director of tourism research. “As many as 15 percent told JLL that they would not have made the trip if alternative accommodations had not been available. So this is a new segment of visitors.”

Nahoopii estimates there are 20,000 alternative vacation units being regularly rented in Hawaii — that’s just over 23 percent of the 86,351 total visitor units statewide. Visitor spending by users of these alternative accommodations is estimated at $1.87 billion for 2016, he said.

Despite declining shares of Hawaii’s tourism pie, hoteliers on the whole say they are not opposed to the growth of alternate accommodations statewide. However, they would like to see the market similarly regulated.

Several hoteliers supported HB 1470, which would have required detailed reporting of operator information by hosting platforms acting as tax collectors. The bill has not been scheduled for a required finance committee hearing.

Airbnb, the vacation rental website, supports another bill, HB 1471, which passed out of the House and was sent to the Senate.

Blane Yokota, Outrigger Enterprise Group associate general counsel, said he is concerned that HB 1471 would impede transparency, virtually nullifying a host requirement to post transient accommodation tax numbers on advertisements. It’s similar to a bill Gov. David Ige vetoed last year, he said.

Airbnb says the new bill is significantly different.

HB 1471 will add as much as $100 million annually in tax revenue and address Ige’s concerns, said Matt Middlebrook, Airbnb public policy manager.