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The Honolulu Advertiser
Posted on: Tuesday, May 13, 2008

OCCUPANCY SLIPS
Hotel occupancy dipped in March

By Robbie Dingeman
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Hawai'i hotels were 77.4 percent full in March, down from a 78.2 percent occupancy rate a year earlier. Another drop-off is expected in April because of airline shutdowns.

ADVERTISER LIBRARY PHOTO | May 2008

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Hawai'i hotel occupancy dipped slightly in March, tracking a similar decline in visitor arrivals for the month, according to a report issued yesterday.

Hawai'i's hotels were 77.4 percent full for the month, down 0.8 of a percentage point from a 78.2 percent occupancy rate in March 2007, according to a report from industry consultant Smith Travel Research and Hospitality Advisors LLC.

Hospitality Advisors President Joseph Toy said higher room rates kept revenues strong at a time when occupancy was expected to be declining. The average daily room rate rose by 7.8 percent to $217.66. Revenue per available room, a key gauge of a hotel operator's performance, rose by 6.7 percent to $168.41.

The industry is bracing for another drop-off for April occupancy, stung by the sudden shutdown of both Aloha and ATA airlines. The two airlines combined for an estimated 15 percent decrease in the number of air seats from the West Coast. However, other airlines have since added flights from the West Coast to Hawai'i.

Toy said that generally the first quarter of the year was better than expected. "The first quarter was a pleasant surprise," he said.

While there has been a drop in bookings, other travelers are coming to Hawai'i for trips planned less than a month before they arrive. "We're beginning to see some fill-ins by late bookers," Toy said.

Toy is still predicting both April and May to be slow: "We would imagine that we'll see a greater dip in April." However, the pace may pick up as more tour companies make travel deals available, he said.

He said the hotel occupancy got a boost from independent (non-group) travelers, especially those from Canada, who are getting more value from their dollar with the favorable exchange rate.

The survey included 153 properties representing 47,025 rooms, or 83.2 percent of all lodging properties with 20 rooms or more, including hotels and condominium hotels.

Hawai'i ranked among the top five U.S. markets, according to Smith Travel Research. For the first quarter of 2008, Hawai'i ranked second (after Miami) for occupancy and third (after New York and Miami) for both average daily rates and revenue per available room.

Hotels on Maui and Kaua'i reported modest gains in occupancy of 4.1 percentage points to 77.1 percent and 1.2 percentage points to 80.7 percent, respectively. Hotels on the Big Island saw fewer guests in March, dropping 6.2 percentage points to 72.3 percent. Occupancies on O'ahu dipped slightly by 0.9 percentage points to 77.3 percent.

Luxury properties led with an 8.2 percent increase in average daily rates.

Luxury market occupancy losses were primarily from Big Island properties as O'ahu luxury hotels reported a slight 0.4 percent point gain in occupancy; Maui luxury properties remained flat.

Budget hotels lagged the rest of the price categories with the combination of a 2.6 percentage point decrease in occupancy and a modest 5.8 percent increase in average daily rates.

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com.

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