Hawaii hotels fetched nation’s highest daily rates in March

The occupancy rate at Hawaii hotels in March was fifth best among the nation’s top tourism markets for the first quarter in a strong rebound from 2021’s pandemic-­related downturn.

The strong performance put Hawaii hotels at the highest first-quarter average daily rate, and highest revenue rate per available room — key performance measures.

The results for March, when Hawaii had a travel quarantine for the majority of the month, bode well for a summer that is expected to sizzle as international travel builds.

“The numbers are great,” said Jerry Gibson, president of the Hawaii Hotel Alliance. “I’m very happy with the way things are going. The numbers are picking up really nicely.”

Gibson said the year started out softer than hotels would have liked save for the neighbor islands, which have been solid due to their popularity with mainland travelers. Still, overall statewide performance improved greatly in March as spring break and family travel mainly from the U.S. filled the last half of the month, he said.

“The spring break piece has lasted. April looks pretty good,” he said. “Oahu is starting to catch up, and before you know it we’ll have the Japanese business, which will help fill in June, July and August, and should be back by September.”

According to a Hawaii Hotel Performance Report published Monday by the Hawai‘i Tourism Authority, March occupancy rose to 75.2% statewide — 32.2 percentage points higher than March 2021, when statewide hotel occupancy was 43% and most hotels across the state were operating well below profitability. Statewide occupancy in March was just 3.6 percentage points lower than March 2019, when statewide occupancy was at 78.8%.

Travelers also were willing to pay much higher rates for hotel rooms across the state in March, when the average daily rate grew to nearly $378, up about 33% from the $284 attained in March 2021, and from $285 in March 2019.

Statewide revenue per available room in March reached $284, a more than 123% increase from March 2021’s $122, and a 27% increase from the $224 in March 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.

March improvements already contributed to making the Hawaiian Islands No. 1 for RevPAR and ADR and No. 5 for occupancy among the nation’s top hotel markets during the first quarter.

HTA reported that Miami, which had a RevPAR of $241, had the second-highest RevPAR among the nation’s top hotel markets, followed by Phoenix at $146.

Miami, at $311, also had the the second-best first- quarter ADR among the nation’s top hotel markets, and Phoenix came in third with $198.

First-quarter occupancy in the Miami, Tampa, Phoenix and Orlando markets outpaced Hawaii. Hawaii hoteliers speculate that this is because Oahu, Hawaii’s top tourist destination, relies so heavily on international traffic, which hasn’t fully rebounded.

Keith Vieira, principal of KV &Associates, Hospitality Consulting, said March’s pattern of dramatically higher ADR and RevPAR, and slightly lower occupancy, shows that Hawaii’s visitor industry realizes a long-held goal of growing tourism through spending and not through arrivals.

“Hawaii had one of the quickest 9/11 rebounds because we were viewed as a great family destination, where people could spend time with families and loved ones,” he said. “This is a very different situation. But we are seeing a demand curve with people, who realize the value of travel and creating unique and memorable experiences, and are currently willing to pay for them.”

Vieira said reinvestment in Hawaii hotels during the pandemic will lead to higher average daily rates, which will improve the overall economy by driving employment and increasing tax collections.

Sean Dee, Outrigger Hospitality Group’s executive vice president and chief commercial officer, said Monday night’s grand opening of the Outrigger Reef Waikiki Beach Resort marks the near culmination of Outrigger’s $80 million transformation of the iconic property and represents a large part Outrigger’s $200 million reinvestment in its Waikiki assets.

“With this investment we are able to add 23 new suites to the property, welcome a beachfront Monkeypod Kitchen by Merriman restaurant and deliver other compelling amenities that will help us attract new global customers and drive higher RevPAR performance over time,” Dee said.

He said that he is encouraged to see Hawaii hotels continue to recover in March, especially with the solid ADR performance across all the islands.

“We are still constrained by the lack of international visitors to Oahu, but recent developments including the JATA (Japan Association of Travel Agents) delegation visit to Hawaii and the announcement of loosening restriction in Japan moving forward bode well for the future,” Dee said. “While we don’t expect a full recovery until 2023, we are headed in the right direction.”