A higher average hotel rate drove up hotel performance in October, offsetting flat statewide occupancy, according to a Hawaii hotel performance report distributed Tuesday by the Hawaii Tourism Authority.
The average daily rate (ADR) for Hawaii hotels in October climbed nearly
4 percent from the prior year to $240, according to HTA’s Tourism Research Division, which compiled the report from STR Inc. data. The company surveyed more than 166 properties, representing 48,989 rooms, or nearly 91 percent of all
Hawaii lodging with
20 rooms or more.
October occupancy rose only 0.1 percentage point to 78.6 percent. However, the increase in room rates helped push up revenue per available room (RevPAR) nearly
4 percent from the same period in 2016 to $189. RevPAR, which is the price a hotelier gets per room regardless of its rental status, is considered by many in the industry as the best measure of performance.
“October was a solid month in what has been a good year overall for hotel properties statewide that reflects the tourism industry’s ability to attract travelers at different price points, particularly visitors seeking high-end accommodations,” said Jennifer Chun, who starts serving as HTA director of tourism research Friday, in a statement. “This is especially true for neighbor island hotel properties, which are largely realizing excellent year-over-year growth in revenues generated on a per-room basis.”
While October occupancy fell 2 percentage points on Oahu and was virtually flat in Maui County, it rose nearly 5 percentage points on Hawaii island to 72.9 percent and 6 percentage points on Kauai to 77.1 percent. ADR grew across all islands but posted the most robust gains in Maui County. While RevPAR declined a smidgen on Oahu, it posted high-single-digit increases in Maui County and Kauai and a double-digit gain on Hawaii island.
Year to date through October, RevPAR climbed almost 6 percent to $210, ADR rose just over 4 percent to $261 and occupancy grew a scant 0.9 percentage point to 80.3 percent. Year-to-date occupancy declined on Oahu but grew across Maui County, Kauai and Hawaii island. Year-to-date ADR and RevPAR increased across all four major islands.
During the first 10 months of the year, luxury hotels outperformed Hawaii’s midscale and economy-class hotels.
Keith Vieira, principal of KV &Associates Hospitality Consulting LLC, said
Hawaii’s hotel industry is “healthy” even if it’s not enjoying the “unbridled success” of previous years.
“We’re experiencing moderate growth with some segments of the market growing more than others,” Vieira said. “There’s no question vacation rentals and additional hotel inventory have impacted occupancy, but they fill air seats so it’s more positive than negative.”
Beth Churchill, owner of Churchill Group LLC, said the alternative vacation rental industry has flattened hotel occupancy; however, so far the trend hasn’t hurt the traditional lodging industry, which has realized growth from increases in neighbor island stays and higher-spending visitors.
“The state’s tourism priorities have been to attract higher-spending individuals and neighbor island visitation,” Churchill said. “The trend is a clear indication that what HTA and the Hawaii Visitors and Convention Bureau have focused on for the last several years is working. There’s a certain consumer and guest willing to pay the higher rates, and those who are not are shifting to alternative accommodations.”