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Hawaii’s hotel industry posted healthy year-over-year gains in August, but that was due in part to a weaker hotel performance in August 2018 as a result of Hurricane Lane.
Hotel occupancy rose 5.5 percentage points across the state to 84.3%, according to the Hawaii Hotel Performance Report released Wednesday by the Hawaii Tourism Authority, which used data from STR. Average daily rate (ADR) grew more than 3% to nearly $290 and revenue per available room (RevPAR) increased nearly 11% to just over $244. RevPAR is considered by many in the industry as a key measure of success given that it’s the amount each hotelier gains per room regardless of its occupancy status.
Oahu, Maui and Hawaii island posted August gains in all categories. However, Kauai posted an occupancy gain, but experienced declining ADR and flat RevPAR.
In August, Hawaii hotel room revenue statewide increased nearly 8% to almost $409 million, which is nearly $33 million higher than August 2018. Room demand in August grew 5% year-over-year to 1.4 million rooms, while room supply dipped about 2% during the same period. The results were partially effected by renovations, which in August closed some hotels and took some rooms out of service.
For the year, Hawaii hotel’s have realized scant performance growth. Occupancy fell 0.4% to 81.7% with ADR rising nearly 2% to almost $285 and RevPAR increasing just over 1% to nearly $233. Still, hotel industry experts expect performance will continue rebounding.
Keith Vieira, principal at KV & Associates Hospitality Consulting, said it has been a slow rebound from last May when the heightened eruption at Kilauea volcano caused months of downturns that were exacerbated by weather events and a hurricane and then a lengthy labor dispute.
“There had been a general malaise. But I think the fourth quarter will show improvement based on advanced bookings and that the pickup will continue into the fourth quarter,” Vieira said.
Joseph Toy, president and CEO of Hospitality Advisors, said August, which is typically the strongest summer month of the year for hoteliers, didn’t disappoint.
“We’ve continued to see strong demand from the U.S. mainland, which has been driving the market. It didn’t hurt that consumer confidence rebounded quite a bit in August,” Toy said. “Domestic visitors typically gravitate to the neighbor islands, which is why we’re probably seeing so many gains there.”
The long-term outlook for Hawaii hotels remains relatively strong, barring a potential softening in the economy and its impact on consumer spending, he said.
AUGUST 2019 AUGUST 2018
STATE
Occupancy 84.3% 78.8%
ADR $290 $ 280
RevPAR $244 $221
OAHU
Occupancy 88.8 % 84.6 %
ADR $ 255 $ 252
RevPAR $ 227 $213
MAUI
Occupancy
78.6% 72.1 %
ADR $389 $376
RevPAR $306 $271
BIG ISLAND
Occupancy 80.9 % 69.1%
ADR $281 $243
RevPAR $227 $168
KAUAI
Occupancy 74.4 % 72.6%
ADR $286 $293
RevPAR $213 $213
Source: HTA
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