Hotel revenue hits record
By Lynda Arakawa
Advertiser Staff Writer
Hawai'i's hotel industry had a record-setting month in October, topping October 2000 highs in room revenue and average daily rates.
Hotel occupancy statewide for that month also grew 5.3 percentage points over October 2003 to 77 percent, according to Hospitality Advisors LLC, which issued the report yesterday.
"It was just a very, very outstanding October ... following an outstanding year," said Joseph Toy, president of Hospitality Advisors. "Just across the board, we've seen a lot of pent-up travel over the past couple of years that was building."
Hotel occupancy was driven by a 9.7 percent year-over-year increase in October visitor arrivals. A total of 560,134 visitors came to Hawai'i in October, with Mainland visitor arrivals setting a new record for that month.
Overall visitor arrivals this year are expected to match or beat the 6.95 million record in 2000.
Hotels statewide brought in a record $215.4 million in room revenue in October, beating the $215.2 million high set in October 2000.
The average daily rate ($140.96) and the revenue per available room ($108.54) also beat the previous October 2000 records of $133.50 and $102.36, respectively.
Toy said hoteliers were able to charge higher rates because of the increased demand as well as the lower inventory of rooms resulting from time-share and condominium conversions and hotel renovations.
"We have a situation of higher demand, lower supply and a very robust market," he said.
About 1.53 million rooms were sold in October, the second-highest behind the record 1.61 million sold in October 2000.
All classes of properties, from budget to luxury, saw gains over the previous year in occupancy and average daily rates. Budget hotels saw the highest occupancy at 81.5 percent, with the lowest occupancy among mid-price hotels at 72.9 percent.
A 17 percent increase in Canadian visitors, who tend to be value-oriented travelers, contributed to the increases in budget and economy properties.
Luxury and upscale markets were helped by an 8.5 percent increase in Japanese visitor arrivals, as well as growth in other high-spending markets such as honeymooners, meetings and incentive visitors and tourists from the eastern United States.
All major islands saw higher hotel occupancy over the previous October, with O'ahu growing the most, from 73.7 percent last year to 80.8 percent this year.
Room revenue through October has been on a record pace at $2.31 billion, ahead of the $2.24 billion generated during the same period in 2000.
Toy said although the hotel industry is enjoying a strong year, visitors are still booking rooms late, leaving some uncertainties.
"I think people are confident the first quarter (of next year) is going to be good," he said. "I think the focus is really short term.
"Despite the fact that we are in a bit of a record year this year, we also recognize that the visitor industry can turn on a dime and it reacts very quickly to bad news and reacts very slowly to good news," he said.
The Smith Travel Research/Hospitality Advisors monthly hotel survey includes more than 160 properties representing about 50,310 rooms reporting, or 78.8 percent of all lodging properties with 20 rooms or more in the state.
Reach Lynda Arakawa at larakawa@honoluluadvertiser.com or 535-2470.
