Discounts lure more to hotels

Lower room rates help the lodging industry lure tourists and boost the state’s economy

By Allison Schaefers  Dec 07, 2010 – article from the Honolulu StarAdvertiser

Recovery of Hawaii’s visitor industry continued in October as statewide hotel occupancy increased 4.5 percentage points to 70.9 percent.

 “Typically, October is well into the shoulder season (an annual slowdown between summer and Christmas), but occupancy for Waikiki and Oahu were unusually strong,” said Joseph Toy, president of Hospitality Advisors LLC, which issued the report.

 “Last year we had the American Dental Association Conference, but it’s gratifying that we had even higher occupancy above that.”

More tourists have filled hotel rooms, increased hotel revenues and generally improved the state’s economy this fall and winter, but hoteliers continued to pine for better room rates and a more even recovery. 

The average daily rate for a room in October fell by 0.7 percent to $163.52, Toy said.

“Rates won’t pick up again until 2011 and then only by about 4 percent,” he said. 

“At this point it’s really more about recovery. A 4 percent comeback from an 18 percent drop hardly represents growth.” Room rates have fallen about 18 percent from their peak a few years ago.
“Although Oahu and Maui continue to show significant improvement each month, the recovery will remain uneven until the Big Island and Kauai begin to show more strength and consistency in their respective markets,” Toy said.

Julius Finnern of Menomonee Falls, Wis., and other Pearl Harbor survivors and their families helped boost Hawaii hotel occupancy last week. 

Finnern, who served on the USS Monaghan DD-354 when it was home-ported in Hawaii in 1940, returned to Hawaii for the annual survivor’s convention.

“I’m 91 and I never thought I’d live to 25,” Finnern said. “My ship had 12 major engagements with the Japanese.”  Luckily for Finnern and for Hawaii, he lived to return to the state at least five times on survivor business.
 

Hawaii hotels should continue to gain occupancy as world economies get back on their feet, but the hotel room rate discounting that began 2 1/2 years ago to increase demand will remain, said Toy. 

“Our margins are a lot more shallow due to labor and benefit costs, and there’s been a double-digit energy inflator,”said Jerry Gibson, area vice president of Hilton Hawaii and general manger of Hilton Hawaiian Village, the state’s largest single hotel property employer. “I don’t know that we can realize the profits that we used to have.”

Waikiki led the state in occupancy at 80 percent but finished the month with an average daily rate of $148.59 as compared with $150.68 a year ago.

The overall rate for Oahu hotels decreased 1.2 percent to $148.21 for the month.

Occupancy at Oahu hotels climbed to 78.2 percent from the previous year’s 75.6 percent, helping push revenue per available room, or revPAR, to $115.90 versus last year’s $113.43. 

Statewide revPAR rose 6.1 percent to $115.94. 

Maui hotels had the largest October occupancy increase, rising 11 percentage points to 67.1 percent.

Maui hoteliers also had the highest average daily rate, $194.24; however, it was 3.2 percent below the same period in 2009.

Maui’s revPAR climbed to $130.34 versus last year’s $112.46.
Hawaii island recorded the state’s lowest occupancy; however, the 57.6 percent figure was 2.3 percentage points ahead of last year.

October’s daily rate also increased by 5.8 percent to $171.65 on the Big Island, while revPAR rose to $98.87 as compared with the year-ago $89.74. 

Kauai hotels saw occupancy rise 1 percentage point to 61.2 percent, but the average rate dipped 5 percent to $172.07 and revPAR fell by 3.4 percent to $172.07.

Recovery of Hawaii’s visitor industry continued in October as statewide hotel occupancy increased 4.5 percentage points to 70.9 percent.

Recovery of Hawaii’s visitor industry continued in October as statewide hotel occupancy increased 4.5 percentage points to 70.9 percent.

November’s Median SALES prices – Home median prices rose to $445,000 and Condo median prices rose to $349,990. Land median price was $362,500.

Days on Market for Residential homes = 166 DOM, Condos = 147 DOM, Land = 136 DOM.

(General DOM Note: this is the average DOM for the properties that SOLD. If predominantly OLD inventory sells, it can move this indicator upward, and vice versa. RAM’s Days on Market are calculated from List Date to Closing Date [not contract date]. As such, it includes approximately 60 days of escrow time.) Also – Short Sales transactions can often take 4-6 months to close thereby extending the marketplace’s average DOM.

Year to Date: Residential unit sales rose (+23%), average sold price = $758,398 (+6%), median price = $460,000 (-8%) and total dollar volume sold = $564,247,922 (+31%).

Disclaimer: Zooming in on the figures of a specific geographic area or property type may lead to different conclusions that the overall view.  Maui’s market place is much smaller than Oahu’s, and a few high or low sales have a greater effect on the statistical numbers without necessarily indicating a big market swing one way or another.

Data and statistics provided by the Realtors’ Association of Maui (RAM).

Dates given for on-time holiday mail arrival

Excerpt from The Maui News 

TORONTO (Reuters) – The Canadian dollar is expected to be fairly rangebound and remain close to current levels around parity with the U.S. dollar over the next 12 months, according to a Reuters poll.

The currency is expected to stand at a one-for-one footing three and six months from now, according to the median forecasts of 44 strategists in a monthly survey released on Thursday.

But it will sit slightly below parity in the near term, with the median forecast for C$1.010 to the U.S. dollar, or 99.01 U.S. cents, in one month’s time. All of the average targets in the current poll were largely similar to those from a month earlier.

By midmorning on Thursday, however, the Canadian currency seemed poised to test parity, rising to C$1.0053 to the U.S. dollar, or 99.47 U.S. cents, its firmest level in nearly three weeks, as appetite for risk was stoked by rallying equity markets.

“The loonie is expected to remain mostly close to parity for the time being, reflecting both the renewed swings in risk aversion and the renewed strength of the greenback,” said Roberto Mialich, a currency strategist at UniCredit MIB.

The Canadian dollar last toyed with parity for a five-day run in early November, but lacked conviction as global markets were chilled by increased concerns over Irish debt levels and the potential for a Chinese rate hike.

About 61 percent of the respondents saw parity sometime over the next 12 months.

Forecasters remain divided about the timing of future interest rate increases by the Bank of Canada, which could serve to keep the Canadian dollar hemmed into a range.

The Bank of Canada is unanimously expected to keep interest rates on hold next week, but the uneven economic recovery has primary dealers and global forecasters split on when the bank will resume increases in 2011. The bank raised its key overnight rate three times in 2010, to 1 percent.

“It seems to us that speculation of rate increases early next year is very premature. So we think there is a bit of chance that the bank holds off until July and starts tightening from July onwards,” said Shaun Osborne, chief currency strategist at TD Securities.

“From that point on, we can expect perhaps a little bit more obvious Canadian dollar outperformance.”

With the global economy expected to improve, the appetite for commodities will also be a key factor in supporting the Canadian dollar. The currency often tracks movements in resource prices as Canada is a major producer of oil and metals.

“Resilient energy and non-energy commodity prices, backed by rising inflation risks, provide a positive backdrop for the Canadian dollar to outperform the U.S. dollar,” said Alexandre Dolci of Societe Generale.

Sweet Smell of Success

HC&S’ improved crop takes pressure off plantation

December 3, 2010 – By HARRY EAGAR, Staff Writer – The Maui News