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The Honolulu Advertiser
Posted on: Thursday, December 6, 2001

Marathon, Pearl Harbor boost ailing hotel industry

By Michele Kayal
Advertiser Staff Writer

The last time Hawai'i tourism executives had rooms available at Christmas was so long ago that many of them can't remember exactly when it was.

But this year is different as the aftermath of Sept. 11 continues to take its toll on the state's visitor industry. So far this season, the Neighbor Islands are holding up better than Japan-dependent Waikiki, executives said yesterday, but both venues are expected to be well off their usual marks for the holidays.

Since Sept. 11, Japanese arrivals have fallen 50 percent, while visitors from the Mainland remain 10 to 20 percent off normal levels, and executives say the declines will show up at the front desk this season. Total arrivals for November were anywhere from 20 to 40 percent off from the same month a year ago.

The trend appears to be continuing this month. The industry will see a spike around the holidays, but it will not be as significant as most years.

Fortunately for Hawai'i, the Honolulu Marathon and the 60th anniversary of Pearl Harbor, which collectively will bring more than 25,000 people to the Islands this week, have helped boost what has been a generally disappointing picture for months for Hawai'i's No. 1 industry.

"December is a camel with two humps — the first is the marathon, and there's one at the end," said Rob Solomon, Outrigger Hotels senior vice president for sales and marketing. "The hump at the end is short this year."

Starwood Hotels and Resorts will fill about 90 percent of its rooms on the Neighbor Islands, said Starwood Hawaii senior vice president Keith Vieira, though some hotels are almost completely sold out. Waikiki will have about 20 percent of its rooms to let, Vieira said, but will probably sell out on New Year's Eve.

The story is the same at Outrigger and Ohana hotels, where Neighbor Island properties are in some cases sold out, Solomon said, but Waikiki will be about 15 percent short its usual occupancy.

Eighty and 90 percent occupancy is not bad, executives are quick to point out. In fact, it's significantly better than hotels have been faring since the terrorist attacks. It's just that Hawai'i is used to doing so much better at this time of the year.

"Every year we've sold out from the 27th, 28th through the 2nd," Vieira said. "I don't recall the last time we didn't sell out."

And the Christmas-New Year holiday is usually an industry windfall, the busiest time of the year after summer for many, and a time in which the hotels couple high rates with high occupancy.

Enter the runners. After a slow start, the pace of marathoners has picked up nicely, with the 22,000 of them expected trickling in since mid-week. Local businesses bracing for the harder-than-usual Christmas season said the runners and their families should boost business.

"We do see marathoners in," said Bob Panter, general manager of Hy's Steak House in Waikiki, which gets about half its business from tourists and has seen sales slip about 15 percent since Sept. 11. "It's a spike but not a big one. But it does help."

The Outrigger Reef on the Beach is the headquarters hotel for the race, which of course helps fill rooms.

"We're pretty happy with the marathon results," Solomon said. "We've got numerous hotels that are full up. We can't really differentiate between what's marathon and what's Pearl Harbor. But it's a pretty good beginning for the month and it will be pretty quiet in between (then and the holidays)."

The Hawaii Visitors and Convention Bureau and hotel executives have said they expect the softness to continue into the first quarter of next year, and to slowly climb to normal levels by the third quarter. And even though this holiday season may be off, executives say they are counting on the trend to soon become a thing of Christmas past.

"We're going to have a hell of a Christmas next year," Solomon said. "At that time the world will be a happier place."

Reach Michele Kayal at mkayal@honoluluadvertiser.com or 525-8024.