Vacation rental occupancy tops hotels, pre-pandemic level for May

Vacation rental occupancy statewide was slightly better in May than it was during the same month in 2019, a record-setting pre-pandemic year.

However, supply and demand were still below pre-pandemic times, according to a Hawaii Tourism Authority report released today that utilized Transparent Intelligence data.

May was the most recent month for which data was available.

Vacation rental occupancy topped Hawaii hotels again in May continuing an eight-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 May was 72.2 %, which compared to 71.2% in May 2019 and 11.4% in May 2020.

In comparison, Hawaii hotels achieved an occupancy of 61.5% this May. HTA noted that unlike hotels vacation rental units “aren’t necessarily available year-round or each day of the month and often accommodate a larger number of guests than traditional hotel rooms.”

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.

Vacation rentals pulled into an occupancy lead in October 2020, and from December 2020 until now 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.The occupancy gap between vacation rentals and hotels narrowed to 10.7 percentage points in May.

One theory is that car rental supply challenges and prices also might have disproportionately affected vacation rentals causing some of the occupancy gains to recede. Another is that vacation rental supply has dropped over time, causing those vacation rentals that are available to fill up faster.

In other measures, hotels still lead in May.

The unit average daily rate (ADR) for vacation rental units across the state in May was $236, up 25.4% from May of 2020. But it was less than the $288 ADR that hotels achieved in May.

In May 2021, HTA reported that the statewide vacation rental supply was 572,900 unit nights, up 71.8% from May 2020, and monthly demand was 413,500 unit nights, up 988.5% from May 2020. In May 2019, statewide vacation rental supply was 928,448 and unit demand was 660,907.

In comparison, hotel supply was much closer this May to where it was in May 2019. For instance, in May 2o19, hotel room supply was at nearly 1.7 room nights and demand was at more than 1.3 million. This May, hotel room demand was at 993,600 room nights and room supply was 1.6 million room nights.

While vacation rental supply and demand were below May 2019, they were substantially higher than in May 2020—the second month following Hawaii’s COVID-related travel quarantine, which began on March 26, 2020. During May 2020, visitors could not bypass Hawaii’s travel quarantine through testing and those in quarantine were not allowed to stay in vacation rentals.