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The Honolulu Advertiser
Posted on: Friday, December 7, 2007

October hotel rates hit a high, but occupancy keeps slipping

By Robbie Dingeman
Advertiser Staff Writer

Hawai'i's average daily hotel room rate grew by 8.1 percent to $183.46 in October — a record high for the month.

The room rate increased as hotel occupancy slipped 1.0 percent to 74.3 percent, according to data compiled by Smith Travel Research and Hospitality Advisors LLC. The decline in occupancy mirrored a drop in visitor arrivals October.

The numbers showed a "pretty big lift in the room revenues" boosted by a couple of large groups including the Toyota convention complete with private concert by rock band Aerosmith, said Joseph Toy, Hospitality Advisers president.

Generally, hotel occupancy from September through December is a little light, Toy said. So the increase in room rates to a new record came as a bit of a surprise, he said.

"October had the largest increase since August of 2006," when the tourism market first started to soften after two booming years, he said

"That was a little bit surprising given where the market is going and the concerns about the economy."

There could be another boost this month from this Sunday's Honolulu Marathon, he added.

It was the 18th straight month that hotel occupancy fell on a year-over-year basis. A state Department of Business, Economic Development and Tourism report showed a nearly identical 1.1 percent decline in visitor arrivals in October.

Toy said Hawai'i's luxury market led strong room rate growth in October, with an average daily rate of $272.29.

Wailea on Maui saw a 14.5 percent increase to $351.63, which combined with a 5.6 percentage point occupancy gain.

Kaua'i occupancy led all islands at 78.0 percent, with a 9.7 percent increase in the average daily room rate to $192.12.

O'ahu occupancy dropped 2.2 percentage points and the Big Island occupancy declined by 1.7 percentage points.

Maui posted a 1.2 percentage point increase to 77.9 percent, and posted a 7.1 percent average daily room rate gain to $222.20.

The survey included 152 properties representing 46,364 rooms, or 82.6 percent of all lodging properties with 20 rooms or more including hotels and condominiums.

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com.

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