Hotel occupancy in Hawaii drops to 60.9%
By Robbie Dingeman
Advertiser Staff Writer
By Robbie Dingeman
Hawai'i's hotel occupancy rate plunged by nearly 10 percentage points in December to 60.9 percent, the lowest level since the months following the Sept. 11 terrorist attacks.
December's occupancy rate was the lowest for any month since December 2001 when it was 57.4 percent, according to Hospitality Advisors LLC. Occupancy was 70.4 percent in December 2007.
"For Hawai'i's hotels, December was the worst month of a difficult 2008," said Joseph Toy, Hospitality Advisors president and CEO.
Although last year started strong, the third and fourth quarters sank hard, he said.
"The bottom really fell out of the market."
In nearly 25 years of analyzing hotel data, Toy said, "I've never seen such quick and steep declines."
He said some recent bookings have picked up, but it's hard to build momentum out of tiny recoveries.
"We are seeing a little bit of a bump in what normally is our high season," he said.
The ripples from Hawai'i's No. 1 industry can be felt across the state. Toy noted that total room revenue fell by $206.7 million in 2008 to $2.91 billion.
For the year, statewide occupancy averaged 70.4 percent, down 4.6 percentage points from 2007.
Toy said, "The troughs in the market are like nothing I've ever seen before."
Statewide room demand started out strong in 2008, registering increases in January and February of 1.1 percent and 3 percent. But the slide began with modest room demand decreases in March, April and May. Demand fell sharply in the last seven months of the year, with double-digit decreases in six of the final seven months.
Among the top 25 U.S. lodging markets, Hawai'i ranked fifth in occupancy behind New York City, San Francisco, Miami and Los Angeles. In 2007, Hawai'i's occupancy ranked second, trailing only New York City.
The lowest-price budget properties and the highest-priced luxury properties were least affected, Toy said. Those in the middle were the hardest hit. O'ahu's budget market was the only segment in Hawai'i that reported gains in occupancy (up 3.1 points).
The state's priciest rooms, the luxury segment, achieved the second highest occupancy in 2008, at 73.5 percent, down from 2007's 77.7 percent occupancy.
O'ahu led the Islands with a 68.2 percent occupancy, which was off 5.1 percentage points compared with December 2007. Occupancy fell despite hotels' efforts to fill rooms by discounting.
The Big Island's occupancy averaged 48.2 percent for the month, down 12.5 percentage points from December 2007's 60.7 percent occupancy.
Maui produced the state's highest average daily rates, at $302.88 for the month, compared with $292.65 the prior year, at an occupancy of 56.8 percent, which was 14.4 percentage points down compared with the prior December.
Kaua'i's occupancy was 52.5 percent in December, off 15.3 percentage points for the month.
The monthly hotel survey is compiled by Smith Travel Research in conjunction with Hospitality Advisors.
For December 2008, the survey included 161 properties representing 46,900 rooms, or 83.7 percent of all lodging properties with 20 rooms or more in the state, including full service, limited service and condominium hotels.
Reach Robbie Dingeman at firstname.lastname@example.org.