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The Honolulu Advertiser
Posted on: Friday, December 29, 2006

Hotel occupancy off but prices increase

By Lynda Arakawa
Advertiser Staff Writer

Hawai'i's hotel occupancy in November was down slightly from a year ago, but hotel room prices continued to grow to top last year's monthly record, according to a report released yesterday by hotel consultancy Hospitality Advisors LLC.

Statewide occupancy fell 1 percentage point to 74.8 percent last month, a figure industry officials say is still strong. Hoteliers continued to charge more for rooms, driving revenue per available room — a key measure of profitability — to a new November high.

"I feel good," said Gary Seibert, area vice president and managing director of Hilton Hawaii, which enjoyed higher occupancy and rates last month. "Hawai'i provides a very good product. ... I'm not just talking hotels, I'm talking the overall vacation experience. Hawai'i as a state does a very good job and continues to be appealing to people from the Mainland as well as overseas."

Hawai'i's average room rate increases this year are "not out of line" with the growth experienced at most major destinations on the Mainland, Seibert said.

Although Hawai'i hosted slightly more visitors last month, hotel room demand fell, in part because more visitors are using other accommodations like time-shares, condos and beach cottages, Hospitality Advisors said.

But despite the lower demand, statewide average daily rates last month still grew 6 percent year-over-year to $173.02. Revenue per available room reached $129.35, up 4.6 percent from a year ago and setting a record for November. The previous record was set last year.

"The upper-end of the market, and in particular Waikiki, remains fairly strong for this time of year," said Hospitality Advisors President Joseph Toy. "Continued increases in November room rates that have characterized most of 2006 thus far more than offset the slight falloff" in room sales.

O'ahu's occupancy was relatively flat, but the island experienced increases in rates and revenue per available room. Maui saw a slight dip in occupancy but also enjoyed higher rates and revenue per available room.

The Big Island and Kaua'i, however, saw declines in both occupancy and revenue per available room, despite higher average daily rates.

The survey, compiled by Smith Travel Research with Hospitality Advisors, included 142 properties representing 46,118 rooms, or 78.5 percent of all lodging properties with 20 rooms or more in the state, including full service, limited service and condominium hotels.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.

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