MAUI HOTEL OCCUPANCY is UP! All across the state is increased by lower prices

With upscale and luxury resorts leading the way, Maui hotel occupancy jumped to 68.3 percent during the first half of 2010.

Higher-end resorts on Oahu also enjoyed a big bounce, and Oahu’s average occupancy jumped from 70 percent to 75, according to Hospitality Advisors.

Maui upscale resorts, which had average rack rates of $195, saw their occupancy rates rise from 64.3 percent to 70.3 percent. Luxury resorts, with average posted prices of $324 a night, saw occupancy rise from 61.1 percent to 67.6 percent.

Those prices reflected some cutting, about 5 percent for upscale resorts and more than 7 percent for luxury rooms compared to 2009.

On Maui, more modest resorts also turned to price cutting.

Midprice room rates were lopped more than 7 percent to an average of $139, but that pushed occupancy rates up only to 62.8 percent, although from a very low (for Maui) 55.8 percent the year before.

Occupancy rates less than 60 percent were almost unheard of until the recession began in the middle of 2008.

Maui’s economy hotels cut their rates by nearly 7 percent to $124, and this got the biggest proportional gain in occupancy, up from 53.6 percent to 66.6 percent.

Maui doesn’t have any rooms that Hospitality classes as budget, but on Oahu there was a huge jump in demand for cheap rooms. Prices were cut by a modest $3 a night, but occupancy leaped from 67.2 percent to 83.1 percent.

The cuts in posted or rack room rates probably understate the aggressiveness of price cutting on Oahu and Maui, because of offers of free breakfasts and the like. Maui resorts also have the advantage of being able to offer room and golf packages that in some cases have offered almost free golf.

Kauai and the Big Island have resisted cutting rack rates, and Hawaii County has paid the price in occupancy.

Big Island rack rates have moved only from an average of $187 to $183 a night, and occupancy has hardly budged, rising only from 54.6 percent to 55.4 percent.

On Kauai, posted rates have moved from $192 to $183 – closer to the moves made on Maui – but occupancy improved only from 58.5 percent to 60 percent.

In June, the last month reported by Smith Travel Research to Hospitality, there was a perhaps significant change from previous months.

Statewide, rack rates were nearly unchanged from June 2009 (down less than $3 to $170), but occupancy jumped from 61.8 percent to 71.4 percent.

Maui’s experience was similar but not exactly the same. Rack rates in June were $6 lower at $224, and occupancy improved but not as much as that in the rest of the state, from 59 percent to 65.7 percent.

Overall for the year so far, Maui has cut its rates the most (9.1 percent) and has improved occupancy the most (8.2 percent).

“Summer bookings for Oahu and Maui are strong,” said Hospitality Advisors President Joseph Toy, but still far below the peaks of 2007.

Bargains are plentiful, especially in the fancier places. “The upper end of the market is seeing a lot of trading-up in travel given the attractive pricing.”

By price class, luxury resorts increased their revenue by 6 percent in the first half to $692 million. The other four price classes saw their revenue almost stagnant, and all four together grossed only $521 million.

First-half revenue was nearly unchanged at $1.21 billion from depressed 2009, and it was about $360 million below the totals achieved in 2006, 2007 and even 2008, which had finished higher overall thanks to a fast start and a slow finish.

(Maui News, MSN Realestate, Karen, Donna)