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The Honolulu Advertiser
Posted on: Friday, March 31, 2006

Hotel industry weathering tempests

By Lynda Arakawa
Advertiser Staff Writer

The relentless downpours over the Islands, the tragic Kaloko dam collapse on Kaua'i and the untreated sewage in the Ala Wai Canal contaminating portions of Waikiki beach may be putting a damper on the high occupancy numbers Hawai'i's hotel industry has been enjoying.

"The upshot is our occupancy has been trailing off somewhere (in) the second half of March," said Joseph Toy, president of Hospitality Advisors LLC. "Whether it's weather-related, I don't know, but that's certainly a possibility."

Toy said hoteliers also have reported seeing some weather-related cancellations in April.

Statewide hotel occupancy for March through last Saturday was 81.8 percent, compared with 84.5 percent for the same period last year, according to Hospitality Advisors.

Nearly 82 percent occupancy is a strong number for March, Toy said, adding that any decline in numbers because of weather-related cancellations will be short-lived.

Chris Tatum, general manager of the Waikiki Beach Marriott Resort & Spa, said some guests frustrated with the rain have checked out early, but that he hasn't seen any cancellations.

"I will tell you that there are a lot of people who look at it and say, 'Listen, it's still warmer than where we were at,' " Tatum said. "There are a lot of people with very positive attitudes. Have we had early checkouts from the rain? Yes. Have they been devastating? No.

"One couple I talked to this morning was from Chicago. ... They were still saying how beautiful (it is); they drove over to the Windward side and they were talking about the waterfalls."

Jim Heather, general manager of the Outrigger Waikiki, said the hotel is doing better than last year despite the rain, and that he hasn't seen any cancellations.

"We are getting people calling about what they've heard about the beaches being closed," he said. "The beach in front of Outrigger Waikiki has not been closed, so we want to make sure that the news gets out about what the status is, and not the rumors getting out that it's worse than it actually is."

As soon as the weather clears up, the Kaua'i Visitors Bureau and the Hawai'i Visitors and Convention Bureau will launch a public relations campaign touting Hawai'i as a sunny paradise, said Kaua'i Visitors Bureau executive director Sue Kanoho.

In the meantime, hotels are working to keep their guests happy indoors. The Outrigger Waikiki had cultural activities indoors throughout the day, including lei-making and 'ukulele performances by hotel employees. Overall, guests are taking the weather in stride, Heather said.

"Most people have said they're coming from very cold places and they say it's better to be 80 degrees and wet than 30 degrees and cold," he said. "Overall, they have a great attitude about it. I'm probably more depressed about it than they are. They're on vacation and they're making the best of it. Really, who can you blame about the weather? ... I feel bad for them, they saved up a lot of money to come out here."

With waters in front of the Hilton Hawaiian Village Beach Resort & Spa contaminated from the sewage from the Ala Wai and the continued rainy weather, the hotel began offering discounts on its fitness center and free admission to its Bishop Museum collection. Spokeswoman Cynthia Rankin said the hotel also started running movies for guests and that the Mandara Spa is offering discounts on certain treatments.

Hotels enjoyed a strong February, with average daily room rates growing 13.6 percent year-over-year to $188.96, a monthly record, according to data released yesterday by Hospitality Advisors LLC. Higher rates and longer-staying visitors also helped hotels achieve 15.2 percent growth in revenue per available room — a key measure of profitability — to $164.65.

Statewide occupancy grew 1.1 percentage points to 87.1 percent. The industry generated $276.3 million in room revenues, up 11.5 percent from last year.

All islands saw higher occupancy in February except for Kaua'i, which dropped 1.8 percentage points to 80.6 percent. But every major island saw improvements in daily room rates and revenue per available room.

The room demand last month was largely generated by luxury hotels, which posted a 3.8 percent increase in demand while all other hotel segments fell slightly in room nights sold.

The survey, compiled by Smith Travel Research with Hospitality Advisors, included 143 properties representing 47,245 rooms, or 78.8 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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