Hawaii vacation rental occupancy exceeding stays in hotels

Vacation rental occupancy statewide topped Hawaii hotels again in April, continuing a seven-month trend that emerged in October after Safe Travels Hawaii allowed some visitors to bypass the state’s COVID-­19-related travel quarantine.

The average unit occupancy at a vacation rental in Hawaii in April was 66.6%, compared with just 50.8 % for Hawaii hotels, according to a Hawaii Tourism Authority report that utilized Transparent Intelligence data. April was the most recent month for which data was available. Hawaii instituted a travel quarantine on March 26, 2020, making April 2020 the worst month of the pandemic for vacation rental and hotel occupancy.

Fewer visitors stay in vacation rentals in Hawaii than in hotels, but in recent years, vacation rental occupancy growth had begun to outpace hotel occupancy growth. That run was disrupted when vacation rentals were sidelined for a time during the pandemic, while hotels were allowed to operate as “essential businesses” during Hawaii’s COVID-19- related shutdown.

Once government loosened vacation rental restrictions, they experienced a pandemic-related jump in popularity, likely from travelers who were seeking more social distance.

Transparent Intelligence’s local partner, Erik Kloninger of Kloninger &Sims Consulting LLC, said “some of it is likely driven by people seeking larger accommodations with their own cooking and living space.”

Vacation rentals pulled into an occupancy lead in October 2020, and from December 2020 on have maintained a more than 15 percentage-point lead each month. Vacation rental occupancy in February and March was more than 19 percentage points ahead of hotels, but moderated to a 15.8 percentage-point lead in April.

Kloninger said car rental supply challenges and prices also might have disproportionately affected vacation rentals causing some of the occupancy gains to recede.

Another reason occupancy at Hawaii vacation rentals in April 2021 was higher than at hotels is that the vacation rental supply is taking longer to return to pre-pandemic levels, he said.

Kloninger said most hotels have recovered their supply. However, data shows that vacation rental supply statewide is still down about 20% from pre-pandemic times, although the results vary by island.

Kloninger noted that Maui’s vacation rental supply is higher than it was before the pandemic.

“Maui has really been kind of the leader in the post-­pandemic rebound, which makes sense,” he said. “Oahu is going to lag because of its dependence on international travelers. Kauai was lagging because they didn’t (rejoin) Safe Travels until a few months into the year.”

Vacation rental supply statewide in April 2021 increased 82.7% from the supply in April of 2020, when vacation rental occupancy plummeted to its worst level amid COVID-19 fears and government containment actions. In contrast, Kloninger said Oahu’s vacation rental supply was up only 8.5% during the same time period.

Even with the April gains, Kloninger said Oahu’s supply is still down 38% compared to before the pandemic.

“A lot of (Oahu’s) vacation rental supply went offline during the pandemic and then for whatever reason less of it has come back,” Kloninger said. “My initial thought was that the city and county enforcement that was announced in late 2019 was having an impact.”