Posted on: Friday, March 4, 2005

Hawai'i hotels have best January since '91

By Lynda Arakawa
Advertiser Staff Writer

Hawai'i's hotels were more than 80 percent full in January as the state welcomed a record number of visitors for the month.

January's 80.6 percent occupancy rate is 4.3 percentage points higher than a year ago and is the best January occupancy since 1991, according to the latest monthly report released yesterday by Hospitality Advisors LLC.

The statewide average daily rate for a hotel room also increased by 5.1 percent to $158.49.

Hawai'i's hotel occupancy and room rates were boosted by a 15.9 percent jump in statewide visitor arrivals in January. State figures also showed a 20.9 percent increase in visitors coming to Hawai'i for meetings, conventions and incentive trips.

"January's market performance is a great way to start the new year after coming off an already impressive 2004," said Joseph Toy, president of Hospitality Advisors. "Although the Canadian market was lower than last year, the surge in Japanese arrivals in particular helped O'ahu lead the state's hotel industry for January 2005."

Kelvin Bloom, president of Aston Hotels & Resorts, said: "There's every reason for optimism that 2005 will be a record-breaking year."

Occupancy at Aston properties was similar to statewide figures, but "for us the real story is in the average daily rate and the tremendous growth we experienced, particularly on some of the islands such as Maui, (which) experienced very strong double-digit increases," Bloom said. "If there's ever a trade-off that one needs to make between occupancy and (room) rate, certainly you like to see the growth in rate as opposed to occupancy because of the profitability that's involved there."

Pacific Beach Hotel general manager Robert "Mick" Minicola said the property's occupancy was flat compared with January 2004, but added that room rates were up. The King Kamehameha's Kona Beach Hotel, which he also oversees, saw gains in both occupancy and rates, he said.

"Industrywide, it's very positive, and also there's a shrinkage of inventory in Waikiki," he said. "So that, amongst the higher demand, is also what's driving the occupancy and rates."

The inventory of available hotel rooms has been falling in recent years with the conversion of a number of hotels to condominiums.

Minicola said that although the winter months are strong, there is some caution about the second quarter.

"We're going into the shoulder season now," he said. "This is really what tells whether we're going to be strong or not."

Every class of hotel saw higher occupancy levels and rates in January compared with year-ago levels except for upscale properties, whose occupancy was relatively flat.

Economy and budget hotels led the growth in average daily rates. Rates at economy hotels rose 9.4 percent to $82.37, while those at budget accommodations increased 6.6 percent to $72.68.

A 19.1 percent increase in high-spending Japanese visitors and a 26.4 percent gain in honeymooners helped drive luxury hotel occupancy up 6.1 percentage points to 78.1 percent.

All major islands except for Kaua'i posted increases in occupancy and average daily rates. O'ahu had the highest occupancy with 84.6 percent, followed by Maui (78.5 percent) and the Big Island (75.5 percent). Kaua'i's occupancy dropped 2.9 percentage points to 72.3 percent.

Maui hotels had the highest average room rate at $201.56, while O'ahu had the lowest at $133.06. Kaua'i's room rate fell from $175.76 in January 2004 to $170.85.

The statewide revenue per available room, a measure of the financial performance of hotels, was $127.75, up from $115.08.

The Smith Travel Research/Hospitality Advisors monthly hotel survey averages over 148 properties representing about 49,062 rooms reporting, or 77.7 percent of all lodging properties with 20 rooms or more in the state.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com or at 535-2470.