Hotel Occupancy Rate Continues Climb

Hotel occupancy rate continues climb

December 28, 2010 – By HARRY EAGAR, Staff Writer
Article from: The Maui News
Maui hotel occupancies in November continued their double-digit gains over the depressed 2009 results for the same month.

Maui’s rate was still pedestrian at 65.7 percent, but much better than the 53.7 percent in November 2009. November is always one of the slowest months of the year for the visitor industry.

Hospitality Advisors released the survey Monday and said statewide occupancy gained 6.7 percentage points to 67.8 percent in November. That represented an acceleration in the comeback of the visitor industry, since the gain for the first 11 months was 5.8 percentage points, to 70.8 percent.

Other indicators, such as visitor arrivals, also have shown an accelerating rebound from a decline that began in the second quarter of 2008 and deepened dramatically after October 2008.

Oahu had the highest occupancy rate last month, 75.2 percent, but that was just a small gain over the 71.6 percent of the year before.

The Neighbor Islands have trailed Oahu in the tourism rebound, in part because east Asia has led the world economic recovery, and Oahu gets most Asian visitors. But Maui is catching up.

The Neighbor Island picture is mixed. In November, Hawaii gained 10.1 percentage points to 55.7 percent, but Kauai gained only 4 percentage points to 51 percent.

Maui room rates indicated that the Valley Isle’s operators are continuing to discount prices, which has helped buoy head counts. While this does not always do much for the bottom line of hotels and resort condominiums, it is considered good news for restaurants, retailers and activity providers, who have more potential customers on the island.

And, in November, the gain in occupancy did translate into a strong gain in revenue per available room for Maui.

Rack rates were boosted a mere 3 percent, to $207, but the revenue per room figure zoomed by more than 20 percent to $136.

The average statewide daily room rate last month rose 3.9 percent, to almost $169. That was the largest month-to-month upswing since March 2008, and only the third month out of the past 29 months that a rise in the statewide rate was reported.

”We’re seeing some strength in Waikiki, and momentum is building on Maui,” said Joseph Toy, president and chief executive officer of Hospitality Advisors. ”But the recovery has been uneven. They’re still fairly far behind on Kauai and the Big Island.”

Statewide room rates are still well below the average of $201 that was reached in 2008 during the height of the market, Toy said.

”To get back to where we were will be a long process, particularly for room rates,” he added.

There is no single approach in the island visitor industry.

Oahu operators pushed up rates by about $6 to $151 and saw single-room revenue rise a little more than 10 percent to $114.

On Hawaii, operators lowered rates by $3 to $174 and saw room revenue amount gain by 20 percent to $97.

On Kauai, rates were unchanged at $176, and revenue per available room rose $6 to $90.

Single-room revenue of under $100 is a poor showing for Neighbor Island resorts.

For the first 11 months, the Big Island’s revenue per available room was $102. Kauai’s was $110. Oahu’s was $115. It is unusual, or at least it used to be, for Oahu, with its many budget rooms, not to be at the bottom.

Maui has always been at the top, and so far this year its revenue per available room is averaging $151.

* Harry Eagar can be reached at heagar@maui news.com. The Associated Press contributed to this article.