Hawai'i's room rates rise
By Andrew Gomes
Advertiser Staff Writer
Hawai'i hotel room rates increased in September for the first time in 13 months, according to a hotel industry survey released yesterday.
The average daily rate for a hotel room in September was $130.40 — up $1.34 from September 2001 and just 17 cents shy of the average rate in September 2000, according to the report by Smith Travel Research and Hospitality Advisors LLC.
The year-over-year gain was the first since August 2001. But not all islands benefited. Room rates were down $3.94, to $148.99, on the Big Island, and were off 5 cents at $156.70 on Maui.
Kaua'i had the best increase with a $12.67 gain to $150.01. O'ahu rates were up $1.60 to $109.49.
Matt Delaney, president of Marc Resorts Hawai'i, said his business has felt the pressure all year to discount rooms because travel wholesalers have had trouble selling package tours.
An increase in the visitor count last month eased some discounting, which helped many hotel operators make up lost room revenue. But others have extended room rates through mid-December until new rates are published.
Occupancy rose in September on all islands, resulting in 64.3 percent of hotel rooms filled statewide. That was a 7.6 percentage point rise from 56.7 percent in September 2001, the first month of business affected by the 9/11 terrorist attacks.
The rise in occupancy was the second straight month of improvement. But the 64.3 percent rate was still nearly 10 points down from 74.1 percent in September 2000.
73.8% full on Kaua'i
As with room rates, Kaua'i led other islands in occupancy levels, with 73.8 percent of rooms filled, a 10.8 point gain over 63 percent in September 2001. O'ahu had the next strongest increase, a 9.1-point gain to 65.6 percent from 56.5 percent.
Maui occupancy rose 6.5 points, to 64.6 percent from 58.1 percent. Big Island occupancy was up 2.5 percent, to 52.6 percent from 50.1 percent.
Joseph Toy, Hospitality Advisors president and chief executive officer, said Kaua'i has been able to lead the market in part because of strong time-share sales that remove vacation units from hotel inventory, creating positive pressure on occupancy and prices.
By hotel class, luxury and upscale properties made the strongest gains in occupancy, helped by more honeymoon visitors and corporate travel, according to Toy.
For the first nine months of the year, both occupancy and average daily room rates remained below year-ago levels.
January-September occupancy was 70.2 percent, compared with 73.2 percent a year ago. Rates were $141.98 and $146.86 during the same respective times.
Year-to-date revenue down
Total room revenue year-to-date through September was $1.86 billion, off 8 percent from $2.02 billion in the same period last year.
Toy said 72 percent of that revenue loss, or about $115 million of $160 million, occurred during the first quarter of this year.
"While we are still behind industry room revenue performance from the prior year, the gap has continued to narrow through the third quarter of this year," he said. "In fact, we have enjoyed gains in occupancy in three of the past four months, and the pace of room rate decline has also slowed considerably."
Delaney of Marc Resorts said he's satisfied with the company's 77 percent average occupancy this year through September, which is actually up 10 percent. But he's disappointed with average daily rates still down 13 percent.
"That's what's affecting us," he said. "That $100 room — we're getting $87 for, and that incremental amount is profit on the bottom line."
The hotel industry is now in its slow season, though Toy noted that October results will show higher increases because October 2001 was the first full month affected by sharply reduced travel after the 9/11 attacks.
The Smith Travel/Hospitality Advisors report is based on a survey encompassing about 51,000 rooms at hotels, resort condominium and bed-and-breakfast operations with more than 20 rooms. It is the largest survey in the state.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
