Heavy rains, the tragic Kaloko Reservoir dam failure and a shift in the Easter holiday pushed down Hawai'i's hotel occupancy in March — the first decline in more than a year.

Statewide occupancy fell 2.5 percentage points over March last year to 82.4 percent, reflecting declines in both Mainland and Japanese visitors, according to data released yesterday by Hospitality Advisors LLC.

Still, Hawai'i hotels continued to bring in more money year-over-year, generating about $284.4 million in room revenues, up 2.7 percent. Average daily room rates grew 9.3 percent to $185.80, and statewide revenue per available room increased 6.1 percent to $153.08.

Mike Paulin, owner of Aqua Hotels & Resorts, said the shift in the Easter holiday plus the rain and surrounding bad news such as the sewage spill in the Ala Wai Canal contributed to a "double whammy" on visitor arrivals. The Easter holiday fell in April this year but was in March last year.

Paulin said he saw occupancy fall about 10 percent from the end of March through April as people postponed their plans. But Aqua's rates and revenue per available room were still ahead of last year and the company is on track again, he said

"We're back to normal now, so that's good," he said. "I've been doing a sun dance. Every time I see the rain I just get the chills now."

Kaua'i, which dealt with not only heavy rains but the Kaloko Reservoir break, reported the largest occupancy decline out of all major islands. Hotel occupancy on the Garden Isle fell 7.8 percentage points from March last year to 73.6 percent. Occupancy on Maui, O'ahu and the Big Island also slipped.

But despite fewer customers, room rates on all islands continued to improve over last year.

Even with a dip in demand, the hotel industry is on pace for another record year in revenue and should have a strong summer, said Hospitality Advisors president Joseph Toy.

"Despite what I'll call a comparatively minimal softening in demand, be it weather-related and a shift in the demand cycle because of the holidays, we're nonetheless on track for a very strong revenue year because we still see very strong increases in room rates," Toy said.

He said with the rise in oil prices and a slight decline in consumer confidence, hoteliers are probably a little more cautious in their outlook. But that won't cause them to change their business plans for this year, and average room rates should continue to rise, he said.

Toy also noted total room revenue for the first quarter of $832.1 million is 8 percent ahead of last year, even with a 3.6 percent falloff in the number of rooms sold.

"The increases in room rates have more than offset that shortfall," he said.

Hawai'i occupancy for the first quarter also led the top 25 U.S. hotel markets. Hawai'i hotels came in second to New York City in average daily rates and revenue per available room.

Statewide average daily rates for the first three months of the year grew 12.1 percent to $185.50, and revenue per available room rose 11.5 percent to $154.29. Occupancy fell slightly by 0.4 percentage point to 83.2 percent.

The survey, compiled by Smith Travel Research with Hospitality Advisors, averages more than 140 properties representing about 46,701 rooms, or 77.9 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.