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Hotels' Occupancy, Revenue Down In Hawaii

Weakest summer ever for Hawaii hotels

Robbie Dingeman  Oct 05, 2009

Hotels in Hawai'i had their weakest summer on record — an average of 68.1 percent occupancy — according to a report released today.

Revenue per room has also plummeted as hotels lower rates to lure guests, said Joseph Toy, Hospitality Advisors LLC president and chief executive officer.

Occupancy for June, July and August was the lowest since Hospitality Advisors began conducting its survey in 1987, and compares with rates in the mid-80 percent range in the summer just three years ago.

"You see people working fewer hours, reductions in the workforce," said Murray Towill, president of the Hawai'i Hotel and Lodging Association.

The statewide average daily room rate fell by 15.9 percent to $177.79 for August — the latest available statistics — resulting in a 19.9 percent decline in revenue per available room to $126.05.

The hotel industry lost an estimated $238 million in total revenue — including revenue from rooms, food and beverage and retail sales — this summer compared with 2008, Toy said. And the drop is even more dramatic — $374 million when compared with the boom tourism summer of 2006.

"Summer is obviously one of the most important times of the year," Towill said. "So being down over $230 million is a big hit."

Towill said some companies have been able to schedule renovations while others don't have the resources amid the recession.

For Aqua Hotels & Resorts, the challenging year has been an opportunity to expand from a Waikiki-based management business with about a dozen hotels on O'ahu to 16 hotels on four islands.

"The one good thing about a down market is the chance to expand," said Ben Rafter, president and chief executive officer of Aqua Hotels & Resorts

"It's a great time to be a consumer with a little bit of spending money. Rafter predicts that occupancy will level off and stabilize but rates may drop more.

"We just have to figure out how to grow the market again," Rafter said. He predicted a rebound by late 2010 and 2011.

O'ahu posted the highest August 2009 occupancy of all the Islands at 78.3 percent, with Waikiki achieving hotel occupancies above 80 percent. O'ahu luxury hotels also posted the highest occupancy by price class at 83.3 percent.

However, the overall average daily rate for O'ahu fell 15.7 percent to $177.36 for the month.

Maui continued to lead the market for the average daily rate at $231.67, but suffered the largest rate loss of 19.6 percent.

Occupancy for Maui also fell by 2.9 percentage points to 66.2 percent. The island of Hawai'i recorded an average daily rate of $193.68, or 8.6 percent lower than a year ago. The Big Island also recorded the lowest island hotel occupancy at 57.2 percent.

Kaua'i averaged 65.8 percent occupancy with an average daily rate of $190.78, or 8.4 percentage points and 12.1 percent behind the prior year, respectively.

Luxury hotels led all segments in both occupancy and average daily rate at 77.7 percent and $252.35, but were down 3.0 percentage points and 18.1 percent, respectively, from last year. Midprice and economy hotels tied for the lowest occupancy among statewide price classes at 61.3 percent.

For August 2009, the survey included 159 properties representing 47,083 rooms, or 83.2 percent of all lodging properties with 20 rooms or more.

Weakest summer ever for Hawaii hotels
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