Posted on: Wednesday, January 26, 2005
Hotels in '04 hit record revenue
By Lynda Arakawa
Advertiser Staff Writer
Strong growth in room prices and demand helped Hawai'i's hotel industry bring in a record-setting $2.73 billion last year, beating the previous $2.7 billion high reached in 2000.
Hotel renovations in the past four years and a tighter supply of rooms because of conversions of hotels to condominiums have enabled hotels to command a higher rate, said Joseph Toy, president of Hospitality Advisors.
"The high of this market, in many respects, is actually a better quality, or stronger, than the high that we previously reached in 2000," he said. "And that's because we actually have a much better product to offer during this market than in 2000."
About 6.91 million tourists visited the state last year, just 40,000 shy of the record 6.95 million in 2000. But the 18.1 million room nights sold last year — while still 6.4 percent above 2003 — lagged the record 19.5 million rooms sold in 2000.
Both the statewide average daily rate and revenue per available room, a critical measure, set new records of $150.86 and $117.36, respectively.
Nearly half of the industry's total room revenues last year came from luxury hotels, which generated more than $1.35 billion. Every market segment saw higher revenue last year, with all but budget properties posting double-digit percentage increases.
Statewide hotel occupancy rates last year rose 5.1 percentage points over 2003 to 77.8 percent.
All major islands saw increases in occupancy, average daily rates and revenue per available room. O'ahu had the highest occupancy rate at 79.7 percent, while the Big Island had the lowest at 70.2 percent.
Maui properties led other islands in average daily rates of $192.23. O'ahu had the lowest daily rate with $123.23.
Robin Graf, general manager of the Waikiki Parc Hotel, said last year started off slow, but June to the end of the year was "outstanding."
"We couldn't have been happier. We really had some record months, and it looks like it's carrying through. We're going to be ahead of our budget for January and it looks like we're going to meet or exceed our February budget. So we're pretty excited about the way things are looking right now.
"Starting off 2005, it looks like we're able to continue to maximize on raising our (average daily rate)," he said. "It's a positive trend."
Hawai'i hotels are ranked second in the top 25 hotel markets, behind New York City, for occupancy, room rates and revenue per available room.
Statewide occupancy in December fell slightly from 72.9 percent to 71.1 percent. Average daily rates, however, increased from $157.52 to $167.61, the highest December rate on record.
The hotel survey, compiled by Smith Travel Research with Hospitality Advisors, averages more than 150 properties representing about 50,278 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 at 535-2470.
Hawai'i hotels were able to top the 2000 high-water mark for revenue despite selling fewer rooms, according to hotel consultancy Hospitality Advisors LLC.
