Hawaii hotel revenue hit mid-year record of $2.66 billion

Published On: Aug 12 2013 11:58:45 AM HST

University of Hawaii economists predicted Hawaii's hotel industry will start to cool, but just how hot is it? KITV4's Ryan Kalei Tsuji gives us an update from Waikiki on Hawaii's tourism.

HONOLULU -

Hotel total revenue, including sales from rooms, food and beverage, retail, parking, and other sources, achieved a new mid-year record of $2.66 billion for a gain of 11.9 percent above last year, according to Hospitality Advisors LLC.

Room revenue, which comprised approximately 67 percent of total hotel revenue, also set a new first half-year record at $1.8 billion.

The revenue gains were primarily driven by a sharp increase in Hawaii's average daily room rates, which rose 11.4 percent to $225.49 for the first six months of the year. Statewide occupancy improved slightly to 77.7 percent for year-to-date June (+0.7 percentage points).

Although there was an increase of visitors choosing other accommodations over hotels, the occupancy gain was supported by a 5.5 percent increase in visitor arrivals including U.S. West (+7.4 percent), Japan (5.2 percent), Australia (+29.0 percent), Korea (+20.0 percent), and China (+24.4 percent) as reported by the Hawai‘i Tourism Authority.

Occupancy on Oahu remained high at 84.1 percent (+0.2 percentage points) through year-to-date June partly due to a 6.7 percent increase in visitor arrivals. The growth in visitor arrivals was mainly in the independent travel (+8.6 percent) and incentive group (+127.6 percent) market.

Maui hotels were 75.1 percent full during the first half of the year (+1.2 percentage points). The slight increase in occupancy can be attributed to a 3.8 percent increase in visitor arrivals primarily from the U.S. West (+4.6 percent), Japan (+20.2 percent), and Canada (+2.2 percent). Occupancy for the luxury resort region of Wailea reached 78.7 percent (+0.8 percentage points) and room rates climbed to $434.64 or 7.7 percent higher than the previous year.

Through June, Kauai's occupancy increased slightly to 69.9 percent (+0.4 percentage points) from the previous year. Visitor arrival growth, particularly from the U.S. West (7.5 percent) and the U.S. East (+5.9 percent), helped offset a slight decline in average length of stay.

The Big Island recorded a 1.2 percentage point increase in occupancy to 63.9 percent through June.

Luxury class properties were 72.3 percent occupied (+2.3 percentage points) and luxury room rates climbed to $460.11 (+8.1 percent) for year-to-date June. Occupancy for economy hotels dropped 3.2 percentage points to 77.6 percent while room rates reached $110.82 (+15.7 percent).

"The increase in overall hotel revenue has been very dramatic this year," said Joseph Toy, President and CEO of Hospitality Advisors LLC. "Most of the revenue gain has been driven by room rate increases as room demand has begun to moderate when compared to the surge of the last two years.”

Toy noted that part of the surge was due to substantial pent-up demand that had developed during the past recent recession. The leveling of demand also reflects the high occupancy rates on Oahu, which out-paced the other islands in Hawai‘i’s market recovery.

"With O'ahu enjoying high occupancy and Maui continuing to gain strength, Kaua'i and in particular the Big Island should begin to see more consistent room demand going into 2014," Toy added.

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