Rising room rates bring record revenues for hotels

Advertiser Staff

Hawai'i hotels continued to struggle with lower occupancies in June, but strong first-quarter results and rising room rates helped propel hotel room revenues to a record for the first half of the year, according to a consultancy report.

The state's overall hotel occupancy for the month was 72.4 percent, a drop of 6.3 percentage points compared with June 2000, according to figures released by Hospitality Advisors LLC and Smith Travel Research.

But statewide room revenues — driven by an increase in average room rates of 5.6 percent for the first six months of the year — rose 2.4 percent compared with the same period last year, hitting a record $1.4 billion, according to the report.

The increase in average room rates more than offset a 1.5 percent decline in visitor arrivals, and a corresponding drop of 1.7 percentage points in hotel occupancy for the same period.

Joe Toy, president of Hospitality Advisors, noted that much of the growth came early in the year and since has slowed.

"Statewide hotel room revenues grew by 9.2 percent during the first quarter of 2001, but actually declined by 2 percent in the second quarter," Toy said. "With the booking outlook remaining uncertain ... it will be difficult to maintain this record."

In June, all islands had emptier hotels compared to the same month last year. Kaua'i had the largest drop at 10.8 percentage points, to 68 percent occupancy; Maui fared the best with a drop of 3 percentage points to 76.7 percent.

Despite the faltering occupancies, room rates continued to rise, with Maui posting the highest in the state at $179.18.