Posted on: Tuesday, September 3, 2002

Hotel occupancy slides

By Kelly Yamanouchi
Advertiser Staff Writer

Hotels saw their occupancy and room rates continue to slip in July, with the exception of Kaua'i which got a boost from higher timeshare occupancy.

Statewide, hotels had a 74.8 percent occupancy rate in July, compared with 76 percent a year ago, according to Hospitality Advisors LLC's monthly survey of 153 hotels representing 71.5 percent of statewide room inventory.

The average daily rate for hotel rooms statewide fell to $144.72 from $148.58.

The figures are another sign of continued weakness in much of the hotel industry. Year to date, the state has had a 69.9 percent occupancy rate, down from 74.9 percent a year ago. The average daily rate has fallen to $142.49 from $147.87.

"People are still holding their breath to see what happens as we go into the third quarter here," said Hospitality Advisors president Joseph Toy. "I think we're going to be in a fairly uncertain market really for the rest of the year."

Kaua'i stood out as the only island to see an increase in occupancy rates in July, with 82.2 percent occupancy compared with 81.3 percent in July 2001. Its average daily rate also increased, to $160.65 from $157.47.

"Kaua'i has been a nice surprise over the last few months," Toy said, adding that investments in timeshare there have "really paid off."

"There's a view that the timeshare has ownership to it and it's prepaid, and if they don't use it, they lose it, so it's a real incentive to come," he said.

Other islands saw decreased occupancy rates. O'ahu fell to 73.4 percent from 74.2 percent, with Waikiki at 73.1 percent occupancy, down slightly from 73.8 percent last year.

"We've seen worse months for Waikiki so it wasn't as bad as it could have been. But we still have a pricing issue," Toy said.

Maui fell to 78.8 percent from 80.6 percent and the Big Island dropped to 67 percent from 70.3 percent.

Revenue per available room, an important measure of the health of a hotel business, dropped to $108.18 from $112.87 statewide, with the biggest decline on the Big Island, a 9 percent drop to $112 from $123.11.

Revenue per available room increased to $132.05 from $128.02 on Kaua'i. Year to date through June, average revenue per available room is $99.65, down from $110.81.

Statewide, there was some salvation for hotels in longer stays by visitors. Though occupancy rates were down about 5.1 percent in July, visitors' longer stays have kept the decline in occupancy rates more modest, Toy said.

Some hotels had it better than others. Luxury hotels statewide had the biggest decline in occupancy to 75.3 percent from 80.7 percent and midprice hotels also had a decline. But upscale, economy and budget hotels all saw increases in occupancy rates. Occupancy at economy hotels rose to 77.5 percent in July, compared with 74.3 percent last year.