Occupancy at Hawaii timeshares is back to pre-pandemic levels — outpacing traditional hotel and resort condominium performance.

The average timeshare occupancy rate reached 92.7% during the third quarter of 2022, when statewide timeshare occupancy for the first time exceeded pre-pandemic levels, according to technology firm STR data reported by the state Department of Economic Development and Tourism.

During the third quarter of 2019, the DBEDT report showed that Hawaii’s timeshare occupancy was at 92.1%. In comparison, the traditional hotel and condominium hotel market in the state achieved an occupancy of 77.4% during the third quarter of 2022.

American Resort Development Association President and CEO Jason Gamel told the Honolulu Star-Advertiser during an interview last week in Honolulu that the timeshare market bounced back quickly from the pandemic because timeshare accommodations deliver more space and enhance the ability to combine remote work and leisure.

“We’ve seen very consistent occupancy gains across the state in timeshare,” Gamel said.

Indeed, the DBEDT report shows that during the third quarter of 2022, timeshare visitors represented 9.1% of all Hawaii statewide visitor arrivals, higher than the 8.5% share the timeshare industry saw during the third quarter of 2019.

Gamel said COVID-19-related travel restrictions caused timeshare occupancy in Hawaii to fall to 35.7% in 2020, which was further than the rest of the nation, which fell to 49.2%. However, he said Hawaii is the No. 1 aspirational U.S. destination for timeshare owners and guests, so in normal times it tends to skew higher than the nation, which achieved an occupancy of 79.3% for the full year 2019, compared with 91.4% in Hawaii.

Gamel said Hawaii’s timeshare industry saw a similar pattern of recovery after Hurricane Iniki, where the timeshare owner was the first traveler back.

“It does produce a very local visitor. It does that for so many destinations, Hawaii in particular. It’s a cultural affinity, it’s an emotional attachment to the islands,” he said, adding that Hawaii’s cultural diversity and natural beauty make it an extremely attractive destination.

Gamel said the “work from anywhere trend” grew during the pandemic and continues strong as owners are spending more time at resorts in Hawaii and elsewhere. According to the DBEDT third-quarter timeshare report, the average timeshare visitor stayed in the state 9.7 days, slightly longer than the 9.3-day average stay during the third quarter of 2019.

“It’s not only for people making up for vacations that they haven’t taken, but they have been able to take longer vacations because they can work remote,” he said.

Gamel said the newest trend is that brands are enhancing customer experience by leveraging digital and technology solutions. For instance, he said some timeshare resorts are personalizing the customer experience by hanging digital frames, which allow owners and guests to plug in their personal photographs during their visits.

He said brands also are tapping into high-end amenities like bringing in local chefs to cook in units, to Marriott allowing owners to convert timeshare points to Super Bowl tickets.

Corporate social responsibility programs also are growing across timeshare brands. For example, Hilton Grand Vacations participates in the “Malama Hawaii” program, which offers timeshare owners and guests a chance to participate in volunteer opportunities that combine travel with giving back. Marriott Vacations Worldwide also offers environmental, social and governance initiatives.

Gamel said nationwide timeshare sales reached a historic high in 2019 when they hit $10.5 billion. While there was a pandemic decline in sales, he said new trends emerged, like remote working as well as the desire for larger accommodations and the prioritization of spending time with friends and family.

“The (national) sales numbers during 2020 were $4.9 billion, which to me was a bit shocking. We double-checked and rechecked those numbers,” Gamel said. “Why in a year where there were all of these (pandemic) shutdowns and people couldn’t fly, no international visitors were coming and yet there was still $4.9 billion worth of timeshare sales. It really came down to the traveler who experienced the timeshare industry — they saw what the product had to offer in good times and bad.”

He said that during the worst of the pandemic, there was a rise in new people who looked at the product for the first time. Now, Gamel said, some owners see timeshare as a hedge against inflation, because owners do not need to battle rising hotel room rates.

He said these trends are likely to benefit Hawaii, where there is one planned new timeshare resort for 2023 and six new timeshare resorts scheduled for 2024 and beyond. The State of the Vacation Timeshare Industry: United States Study 2022 Edition already showed that Hawaii had 98 timeshares, making it the fourth-highest state for number of timeshare resorts.

“I think this year we are going to have one of our banner years for the industry. You have got people who are motivated to travel. They are loving the product more than they ever have before,” Gamel said. “I believe that they are going to have the money to make the additional purchase and spend locally when they go travel. I would expect our spending numbers to probably be at an historic high.”

In contrast, hotels, which occupy a much larger footprint than timeshares, are taking longer to come back nationwide. That’s also true in Hawaii, especially on Oahu, which relies heavily on visitor arrivals from Japan, which are recovering sluggishly.

Occupancy in January for the nation’s top 25 hotel markets monitored by STR showed that average occupancy was at 58.5%. Oahu had one of the best January occupancies of the 25 top markets at just 74.4%, which was bested only by Miami, where the January occupancy was 75.5%.

Still, Sean P. Dee, executive vice president and chief commercial officer for Outrigger Hospitality Group, said high-level data from STR suggests that Oahu hotels are still recovering but not as fast as previously forecast.

Dee said the latest STR forecast for Oahu showed that occupancy in 2023 would improve to 79.5%, downgraded from 81.2%. STR’s 2023 forecast for Oahu’s average daily rate is now nearly $281, downgraded from nearly $284. STR’s revenue per available room forecast for 2023 is now $223, downgraded from over $230.

Dee said in an email, “For Oahu, our number two source market, Japan is recovering much more slowly than anyone would have anticipated. Airlift is increasing from most major Japan carriers and we anticipate 50-60% recovery versus 2019 by the summer from this critical region, but the domestic air increases are still not enough to overcome the Japan situation.”

“Looking ahead, it’s clear there will be more international destination competition for our U.S. visitors as Europe, Mexico and the Caribbean become more and more active and ramp up tourism marketing efforts to target the U.S. traveler,” he said.