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Hawaii hotel room revenues, rates up

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Jan 12, 2008

The number of visitors staying in Hawai'i hotel rooms dipped again in November but that didn't stop the average daily hotel room rate from hitting a record high for the month.

Hawai'i's average daily hotel room rate rose 6.2 percent to $185.67 — a record high for November.

The room rate rose as hotel occupancy slipped 2.2 percentage points to 72.5 percent, according to data compiled by Smith Travel Research and Hospitality Advisors LLC. It was the 19th straight month that hotel occupancy fell on a year-over-year basis.

Revenue per available room, a key gauge of a hotel operator's performance, rose to $134.59, a new record for November.

As has been the recent trend, the decline in occupancy mirrored a drop in visitor arrivals in November. A state Department of Business, Economic Development and Tourism report for the month of November 2007 showed total arrivals declined 1.6 percent to 563,929 visitors.

Part of the increase in rates was the result of some of the lower-priced properties being renovated and moving up the price scale, said Joseph Toy, Hospitality Advisers president.

He said hotel occupancy continued to feel the pinch from the decline in Japanese visitors — even though that has slowed — because Japanese traditionally prefer hotels over other lodging options. Surveys show 95 percent of Japanese visitors prefer to stay in hotels, compared to Americans who use hotels at a rate closer to 70 percent, Toy said. A larger share of American visitors favor time-share units, condominiums and cruise ships compared with their counterparts from Japan.

A dip in the number of visitors from the U.S. East also affects the occupancy rate because that market also shows a strong hotel preference, he said.

O'ahu reported a 1.5 percent increase in rooms available compared to November 2006. Available hotel inventory in Waikiki increased by 2.2 percent — as some renovation projects finished — while room demand fell by 7.8 percent.

The combination of decreasing visitor arrivals and increasing room supply resulted in a 6.8-percentage-point decline in O'ahu occupancy to 74.2 percent. Room rates on O'ahu increased 5.8 percent to $161.54.

Kaua'i enjoyed an occupancy bump of 5.6 percentage points to 73.7 percent. Kaua'i was the only island that showed an increase in visitor arrivals for the month, according to the state Department of Business, Economic Development and Tourism. Kaua'i's average daily room rate rose 11.9 percent to $193.97.

Maui's occupancy rose 2.3 percentage points to 74.4 percent. Maui's room rate rose 5.4 percent to $234.31, helped by a 20.5 percent gain in the average daily rate for the Wailea area.

The Big Island saw a 0.8-percentage-point occupancy gain to 62.7 percent, and a 2.4 percent average daily rate increase to $186.66.

The survey included 160 properties representing 46,130 rooms, or 82.2 percent of all lodging properties with 20 rooms or more, including hotels and condominiums.

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Hawaii hotel room revenues, rates up
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