Statewide hotel occupancy took double-digit dive in August

Occupancy at Hawaii hotels in August dropped by double digits from peak 2019 levels as the delta virus and emergency measures reduced travel demand.

Statewide occupancy in August was 73.4%, according to a report released Monday by the Hawaii Tourism Authority which was based on data from Tennessee- based STR. The results were 10.7 percentage points below August 2019 when the pre­pandemic occupancy was 84.1%.

Despite the occupancy drop, Hawaii hotels in August achieved a 22.5% gain in the statewide average daily room rate, or ADR. The room rate increase helped boost revenue per available room (RevPAR) by 6.9% over the same month in 2019. RevPAR is considered by many in the hotel industry as the key performance measure, as it is the rate that a room rents for regardless of occupancy status.

Hawaii has the most travel restrictions of any U.S. state, but they didn’t dampen the swell of domestic travelers earlier this summer. On July 8 the state began to offer vaccination exemptions for domestic travelers flying into Hawaii on trans-Pacific flights.

However, travel demand was affected by the current surge of delta variant COVID-19 cases that began in late July. Paul Brewbaker, principal of TZ Economics, said that’s the main reason for the tourism pullback.

“Pandemics depress the economy; public health interventions do not,” Brewbaker said during a speech to the Hawaii Society of Business Professionals.

Brewbaker said people were already changing their behavior as COVID-19 incidence increased and before nonpharmaceutical policy interventions and guidance.

He said credit and debit card use shows that retail spending patterns changed. Brewbaker added that smartphone global positioning shows that people also changed the amount of time that they spent in retail and other establishments.

“There is more here going on than ‘they did what the Guv said,’” Brewbaker said in an email to the Honolulu Star-Advertiser.

Still, members of Hawaii’s visitor industry say travel bookings declined and cancellations escalated after Aug. 23, the date that Gov. David Ige asked travelers not to come to Hawaii through October to avoid straining Hawaii’s health care resources. Ige also warned that COVID-19 restrictions meant that visitors might not have the experience that they expected.

Keith Vieira, principal of KV &Associates, Hospitality Consulting, said, “There was a natural downturn in August as school resumed. There also was concern across the country as delta spread, but people assumed Hawaii was safe. Then, the governor of a state that gets all its revenue from tourism told them not to come.

“In my talks with wholesalers and airlines, the governor’s message was the No. 1 factor for the drop.”

August results were mixed across the islands. Travel demand from domestic markets in August mostly exceeded pre-pandemic levels; however, it did not completely offset the loss of international and group business for the hotel properties that depend on those markets.

Kauai was the only island where August occupancy, ADR and RevPAR were better than in August 2019.

Maui’s occupancy in August was just a little behind the same month in 2019, while ADR and RevPAR were up significantly. Hawaii island took a larger occupancy hit than Maui; however, ADR and RevPAR also tracked well ahead of the same month in 2019.

Oahu, the hotel market where the tourism mecca Waikiki is located, was the only island where occupancy, ADR and RevPAR were all below August 2019 measures. That’s because Oahu hotels are more dependent on international travelers than neighbor island hotels.