Hotel occupancy falls on O'ahu

By Kelly Yamanouchi
Advertiser Staff Writer

O'ahu hotels have been hardest hit by the decline in the number of tourists from Japan, but report that Mainland arrivals are strong. One really bright spot: Visitors appear to be spending up to 19 percent more than a year ago. Advertiser library photo • April 28, 2003

Although average hotel occupancy on O'ahu fell 6.2 percentage points to 61.4 percent in May, Maui, Kaua'i and the Big Island each posted increases, according to figures from Hospitality Advisors LLC.

Hospitality Advisors President Joseph Toy said the May figures reflected a nearly 40 percent decline in Japanese visitors coming to Hawai'i, affecting O'ahu the most because it is most dependent on business from Japan. But Mainland travelers kept some hotel business moving.

"Our North American numbers are very strong for the summer, and we're waiting for the Japanese to return," said Frank Lavey, general manager of the Hyatt Regency Waikiki Resort & Spa. "We still have a long way to go, but at least we're seeing a positive trend" for later this summer.

Occupancy at Maui hotels increased to 72.4 percent from 67.6 percent last May.

Kaua'i hotels had the highest occupancy in the state and the biggest increase, averaging 76.7 percent full, up from 70.1 percent last year.

The Big Island, which has had a slower recovery than other islands, saw a smaller increase, to 55 percent occupancy from 53.6 percent a year ago.

Statewide, luxury, upscale and economy hotels suffered drops in occupancy. Mid-price and budget hotels had slightly higher occupancy levels.

"Our Neighbor Island properties did pretty well, and our beachfront (properties) did pretty well," said Barry Wallace, senior vice president of operations at Outrigger Hotels & Resorts.

But lower-price hotels faced heavy competition from more expensive hotels that lowered rates to attract Mainland tourists to make up for lost business from Japan, he said.

Hoteliers had been trying to raise rates after a period of discounting that cut into revenues, and the average daily rate that customers pay for hotel rooms increased to $135.46 statewide, up from $131.96 a year ago. The highest room rates were on Maui, with an average of $168.96, up from $161.32 last May. O'ahu had the lowest rates of $111.18, down slightly from $111.51.

For the year through May, hotel occupancy statewide increased 1.8 percentage points to 70.9 percent. The average daily rate increased to $144.53 from $141.57 in the same period last year.

Wallace said business for June, July and August looks better, reflecting a boost in reservations after the end of combat in Iraq, when people starting making plans to travel again.

He said the rush to refinance homes also may mean that people have more disposable income to take vacations.

Reach Kelly Yamanouchi at 535-2470, or at kyamanouchi@honoluluadvertiser.com.