Vacation rental supply down 41% from pre-pandemic times

Hawaii vacation rentals had better November occupancy than Hawaii hotels, which had a lot more rooms to fill.

Statewide vacation rental occupancy in November was 62.8%, just 5.8 percentage points below November 2019, according to a Hawaii Tourism Authority report released today that was produced by Transparent Intelligence, which analyzes short-term rental markets.

Earlier this week, HTA reported that November hotel occupancy was 59.7%, a 19.4 percentage point decline from November 2019. HTA’s hotel data came from Tennessee-based STR.

Vacation rental supply across the state was significantly down in November from pre-pandemic times, while hotel room supply was actually a little better than it was in November 2019.

In November, statewide vacation rental supply fell to 547,600 room nights, a 40.6% decline from November 2019, while vacation rental demand dropped to 343,939 units, a 45.5% decline.

In comparison, HTA reported that room supply for Hawaii hotels in November rose 16.5% to 1.62 million room nights. According to HTA, hotel room demand over the same period declined 24.1% to 996,100 room nights.

Both vacation rentals and hotel performance were impacted by coronavirus fears and restrictions in November, the first full month that Hawaii welcomed back leisure travelers after Gov. David Ige’s Aug. 23 request that they avoid nonessential trips to Hawaii through October.

Hotels and vacation rentals continued to see improvement in average daily rate (ADR) in November. Statewide hotel ADR in November increased to nearly $333, a 27.5% increase from November 2019. The daily vacation rental rate increased to more than $248, a 17.5% gain from November 2019.

While many hotel properties closed or reduced operations starting in April 2020 due to the COVID-19 pandemic, most had reopened by October 2020 for the start of the state’s Hawaii Safe Travels traveler screening program.

That wasn’t necessarily the case for vacation rentals, which also faced additional outside pressure from state and county enforcement efforts, especially on Oahu. Current regulations still ban vacation rentals from hosting quarantining travelers.

As they struggled to run their businesses, some vacation rental owners removed noncompliant listings, converted the units to longer-term rentals or sold them. The pressure on these owners has intensified over the year.

During the first 11 months of 2021, vacation rentals outperformed the lackluster November. Over that period, statewide vacation rental supply rose to 6.48 million room nights, a 20.1% increase from the same 11-month period in 2019. Vacation rental demand rose to 4.16 million units, a 78.8% increase from the same period in 2o19.