The occupancy rate at Hawai'i's hotels fell sharply in June, and some industry officials say the situation is likely to worsen as the tourism slump continues.

The state's hotels were 69.1 percent full in June, down 7.1 percentage points from the same month a year earlier, according to a report released today by Hospitality Advisers, an industry consulting group.

Release of the June hotel occupancy numbers followed a report from the state earlier this week that the number of visitors traveling to Hawai'i fell 14.2 percent in June.

The hotel occupancy rate might have been even lower if not for the fact that some properties were undergoing renovations and so their rooms were not calculated as part of the available inventory.

"The impact on hotels was cushioned to some extent by a decline in supply of 1.3 percent due to out-of-service hotel rooms undergoing renovation," said Hospitality Advisors president Joseph Toy.

He said average daily room rates at Hawai'i hotels rose to $205.75 in June, up 2.1 percent from the same month a year earlier. Another key industry measure — revenue per available room — fell by 7.4 percent in June to $142.13.

Keith Vieira, senior vice president and director of operations for Starwood Hotels & Resorts in Hawai'i and French Polynesia, said the numbers show how important it is to work on innovative ways to bring visitors to the state in the coming months, when the decline is expected to deepen.

"Every indication shows it's getting worse," Vieira said. He noted that hotels are joining with other community and industry leaders to try to think of incentives and options for helping. Those could include asking for a federal waiver of landing fees, or asking the state to temporarily eliminate the hotel-room tax or general excise tax.

"We've got to try incentives," he said. "People want to come to Hawai'i."

If the decline deepens, hotels face potential layoffs. The Royal Hawaiian hotel, which Starwood manages, has some workers reassigned and others temporarily laid off while renovation has closed the iconic pink hotel and its 550 rooms, Vierra said.

"We've all got to get focused on how do we turn around the fourth quarter — October, November, December," Vieira said. Although the hotels feel the decline first, "this is not a hotel issue, this is a community issue," he said.

He said his company is considering closing a restaurant at one of its other hotels if the slide continues.

But Vieira sees hope in a concerted effort — a combination of marketing to new areas such as China and Korea, as well as familiar ones, and of other incentives.

He said waiving landing fees won't make an airline profitable, but might help that company keep a flight running that it might otherwise cut.

ResortQuest Hawai'i president Kelvin Bloom said his properties were "reasonably pleased for the month of June, as far as O'ahu is concerned."

Outside of Waikiki, things were less rosy. "It's the Neighbor Islands that are causing us the greatest level of concern," Bloom said.

Bloom — who also is chairman of the Hawai'i Tourism Authority — said hotels across the state are offering promotions and discounts to lure travelers. Even with higher air costs, Bloom said, travelers are likely to find "the overall vacation cost to Hawai'i probably will end up to be about the same if not less" than last year because of the lower rates.

Maui occupancy posted the biggest decline among the Islands, with a 10.6 percentage point drop for the month of June. At the same time, Maui's average daily room rate rose 4.5 percent to $278.11.

Hotels in Wailea on Maui reported a 14.3 percentage point decline to 62.4 percent occupancy for June, although they still recorded the highest average daily rates in the state at $454.34.

The Big Island reported the lowest occupancy rate in the state at 57.2 percent, a 9.8 percentage point drop from June of 2007. Kaua'i hotels were 72.2 percent occupied, 4.9 percentage points lower than last June.

O'ahu reported the highest occupancy in the state at 79.1 percent, but lagged 4.7 percentage points behind June 2007. O'ahu's average daily rate rose 3.2 percent to $172.75.

Statewide luxury properties led the market in occupancy for June with 75.2 percent occupancy. Economy properties fared the worst with a 10.6 percentage point decrease in occupancy to 63.5 percent for the month.

Compared to other U.S. markets in the first half of the year, Hawai'i's hotels performed well. Hawai'i hotels ranked third behind New York City and Miami for occupancy year-to-date. Hawai'i ranked number two in average daily rates.

The survey covered 161 Hawai'i properties representing 46,871 rooms, or 83.5 percent of all lodging properties with 20 rooms or more, including hotels and condominium hotels.