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The Honolulu Advertiser
Posted on: Wednesday, March 10, 2010

Island hotel occupancy rates jump, 4th time in 5 months

By Alan Yonan Jr.
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

The relatively steady uptick in occupancy rates suggests that a prolonged slump in bookings may be over.

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Hawaii's hotels are seeing more evidence that a long drought in bookings may be over, with the average occupancy rate rising in January for the fourth time in five months.

But the amount hotels are able to charge per room continued to slide, falling in January for the 17th straight month, according to a report from Hospitality Advisers LLC, an industry consulting firm.

And the improvement in occupancy has been uneven across the state, with hotels on Maui and O'ahu recording higher occupancy rates in January, and Big Island and Kaua'i properties experiencing declines.

Statewide, hotels were 66.5 percent full in January, up 3.4 percentage points from January 2009, according to the Hospitality Advisers report. The average daily room rate fell to $176.88 from $197.41 a year earlier.

"We started 2010 in the right direction with a continued positive trend. And the preliminary results for February also look very positive, which bodes well for the first quater," said Joseph Toy, president and chief executive officer of Hospitality Advisors.

"Unfortunately, the gains in occupancy are being offset by the continued heavy discounting in room rates," Toy added.

Hotel occupancy had declined for most of 2008 and 2009 on a year-over-year basis before finally turning positive last September. It rose again in October before falling in November and climbing in December.

The January increase in hotel occupancy was in line with a 2 percent increase in January visitor arrivals reported earlier this month by the Hawai'i Tourism Authority.

While the first quarter is looking good in terms of occupancy, bookings are a bit soft for the second quarter, Toy said. However, with travelers waiting longer these days to book their trips, "we're hoping for some pickup," he added.

The biggest increase in occupancy was at Maui hotels, where the rate rose 7.7 percentage points to 67.5 percent. Occupancy at O'ahu hotels rose 3.9 percentage points to lead the state with a 72.1 percent rate.

Big Island hotels were 53.2 percent full, down 2 percentage points from a year earlier, while the occupancy rate at Kaua'i hotels fell 2.2 percentage points to 54.3 percent.

On a class basis, statewide budget properties fared the best, with a 5.8 percentage point increase in occupancy to 78.3 percent. Luxury properties had the smallest occupancy growth, increasing 1.7 percentage points to 66.8 percent.

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