Hawaii competitive with international sun and sea destinations

Through the first three quarters of 2018, Hawaii hotels statewide reported modest increases in revenue per available room (RevPAR) and average daily rate (ADR) with flat occupancy, all of which kept the Hawaiian Islands competitive with other domestic and international markets.

According to the Hawaii Hotel Performance Report issued today by the Hawaii Tourism Authority (HTA), RevPAR in the Hawaiian Islands increased to $225 (+6.1%), ADR grew to $278 (+5.7%), with occupancy staying flat at 81.0 percent (+0.3 percentage points) in the first three quarters compared to last year (Figure 1).

HTA’s Tourism Research Division issued the report’s findings utilizing data compiled by STR, Inc., which conducts the largest and most comprehensive survey of hotel properties in the Hawaiian Islands.

Jennifer Chun, HTA tourism research director, noted, “The increases in RevPAR and ADR through nine months are due to the strong performance that Hawaii hotels realized in the first half of the year.”

All classes of Hawaii’s hotel properties reported RevPAR growth in the first three quarters of 2018. Year-to-date through September, Luxury Class hotels statewide earned growth in both RevPAR to $418 (+6.6%) and ADR to $553 (+6.6%), while occupancy remained flat at 75.6 percent. At the other end of the price spectrum, Midscale & Economy Class properties statewide saw RevPAR increase to $135 (+11.3%) and ADR grow to $166 (+9.8%), with occupancy at 81.3% (+1.1 percentage points).

Compared to other top U.S. markets, the Hawaiian Islands ranked first in RevPAR at $225 (+6.1%) through three quarters, a period in which U.S. hotels nationwide reported RevPAR growth. New York City ranked second at $215 (+3.5%) with San Francisco/San Mateo third at $204 (+5.1%) (Figure 2).

The Hawaiian Islands also led the U.S. markets in ADR at $278 (+5.7%), again followed by New York City at $248 (+2.5%) and San Francisco/San Mateo at $243 (+6.1%) (Figure 3).

The Hawaiian Islands ranked third for occupancy at 81.0 percent (+0.3 percentage points), with New York City holding the top spot at 86.7% (+0.9 percentage points) and San Francisco/San Mateo ranking second at 83.7% (-0.8 percentage points) (Figure 4).

All Four Counties Reported RevPAR and ADR Increases through Three Quarters

All four island counties reported RevPAR and ADR increases through the first three quarters of 2018. Maui County hotels led the state in overall RevPAR of $299 (+9.9%) through three quarters, driven by an increase in ADR to $387 (+10.3%), which offset flat occupancy of 77.4% (-0.3 percentage points).

Kauai hotels led the state in growth of RevPAR to $227 (+12.3%) through three quarters, boosted by increases in ADR to $294 (+11.1%) and occupancy to 77.1 percent (+0.8 percentage points).

Oahu hotels saw RevPAR increase to $202 (+3.2%) through three quarters, with growth realized in both ADR to $238 (+2.2%) and occupancy to 84.8% (+0.8 percentage points).

Hotels on the island of Hawaii recorded growth in RevPAR to $193 (+4.1%) through three quarters driven by an increase in ADR to $261 (+5.6%), which offset a decrease in occupancy of 73.9 percent (-1.1 percentage points).

Among Hawaii’s resort regions, Wailea on Maui led the state through three quarters in both total RevPAR and growth of RevPAR at $516 (+14.0%), ADR at $587 (+11.2%) and occupancy of 87.9% (+2.2 percentage points).

Also, on Maui, hotels in the Lahaina/Kaanapali/Kapalua resort area reported growth in RevPAR to $249 (+7.5%) through three quarters, with the increase in ADR to $324 (+9.0%) offsetting a decrease in occupancy of 76.9% (-1.1 percentage points).

Waikiki hotels earned growth in RevPAR to $199 (+3.0%) through three quarters, bolstered by modest increases in both ADR to $233 (+2.3%) and occupancy to 85.3% (+0.6 percentage points).

The Kohala Coast region reported an increase in RevPAR to $260 (+2.5%) through three quarters, with the growth in ADR to $369 (+7.9%) offsetting a decline in occupancy to 70.6% (-3.7 percentage points).

Four Island Counties Compared Favorably to International Sun and Sea Destinations

The performance of hotels on Hawaii’s four island counties was competitive when compared to top international sun and sea destinations over the first three quarters of 2018.

Hotels in the Maldives ranked highest in RevPAR at $388 (+1.7%) followed by French Polynesia at $365 (+6.2%). Maui County ranked third at $299 (+9.9%), with Aruba fourth at $240 (+13.0%), Kauai fifth at $227 (+12.3%), Oahu sixth at $202 (+3.2%) and the island of Hawaii seventh at $193 (+4.1%) (Figure 5).

Hotels in the Maldives also led in ADR at $608 (+0.7%) through three quarters, followed by French Polynesia at $554 (+12.5%) and Cabo San Lucas at $389 (+18.0%). Maui County ranked fourth at $387 (+10.3%) with Aruba fifth at $319 (+12.1%). Kauai at $294 (+11.1%), the island of Hawaii at $261 (+5.6%) and Oahu at $238 (+2.2%) ranked sixth, seventh and eighth, respectively (Figure 6).

Oahu led all sun and sea destinations in hotel occupancy at 84.8 percent (+0.8 percentage points) through three quarters. Maui County ranked second at 77.4 percent (-0.3 percentage points), with Kauai third at 77.1 percent (+0.8 percentage points), Aruba fourth at 75.4 percent (+0.6 percentage points), Phuket fifth at 74.5 percent (-1.9 percentage points) and the island of Hawaii sixth at 73.9 percent (-1.1 percentage points) (Figure 7).

RevPAR and ADR Grew Statewide and for Maui County, Kauai and Oahu in September

For the month of September, Hawaii hotels statewide reported growth in RevPAR to $186 (+2.6%), with the increase in ADR to $242 (+4.5%) offsetting a decline in occupancy of 76.9% (-1.4 percentage points).

Nearly all classes of hotel properties reported higher RevPAR and ADR in September compared to a year ago. However, only Upscale Class properties reported an increase in occupancy at 73.3 percent (+1.3 percentage points).

Luxury Class hotels statewide reported flat RevPAR of $299 (+0.3%) while Midscale & Economy Class hotels earned an increase in RevPAR to $119 (+6.4%).

Chun commented, “September’s results were not as bad as anticipated, especially considering the anxiety that Hurricane Lane and Tropical Storm Olivia created for the tourism industry between the latter part of August through mid-September.”

Despite the heavy rains and high winds caused by the two storms striking parts of the Hawaiian Islands, Maui County, Kauai and Oahu all realized increases in RevPAR and ADR during September. Travel bookings to the island of Hawaii continued to wane, largely due to the lingering effect of Kilauea volcano’s eruptive activity from May 3 through August 6.

Maui County hotels reported the highest total RevPAR at $216 (+4.8%) of all island counties in September, with growth of ADR to $302 (+7.8%) offsetting decreased occupancy of 71.4 percent (-2.1 percentage points).

Kauai hotels earned the highest growth in RevPAR at 7.2 percent ($184) of all island counties in September, which was supported by increased ADR of $257 (+9.0%) offsetting lowered occupancy of 71.4 percent (-1.2 percentage points).

Oahu hotels grew RevPAR to $188 (+3.1%) and ADR to $223 (+2.7%) in September, with occupancy of 84.2 percent (+0.4 percentage points) being similar to a year ago.

Hotels on the island of Hawaii reported a decline in RevPAR to $122 (-12.5%) in September compared to the year prior. Slightly higher ADR of $208 (+0.9%) for the month was offset by a drop in occupancy to 58.7% (-8.9 percentage points).

Wailea hotels led the state’s resort regions in growth of both RevPAR to $364 (+11.2%) and occupancy to 84.8 percent (+5.9 percentage points) in September. In addition, ADR increased to $429 (+3.4%).

The Lahaina/Kaanapali/Kapalua region also grew RevPAR to $187 (+2.2%) in September, with rising ADR of $263 (+8.1%) offsetting declining occupancy of 71.0 percent (-4.1 percentage points).

Waikiki hotels earned RevPAR of $188 (+2.2%) supported by an increase in ADR to $222 (+2.9%). Occupancy declined slightly to 84.9 percent (-0.6 percentage points).

Hotels in the Kohala Coast region reported a RevPAR loss of 17.6 percent to $143, with declines in both ADR to $279 (-1.1%) and occupancy of 51.3 percent (-10.3 percentage points).