One for the Books

2005 revenue shoots past 2004 high

By: Dawna Robertson

Hawaii’s hotel industry brought in a record $3 billion in revenue last year, benefitting from the state’s reputation as a safe, yet exotic destination in a time of international tension. The previous record of $2.73 billion was set in 2004.

With modest gains in the number of customers and room prices expected this year, hotel consultancy Hospitality Advisors, LLC has estimated that Hawaii hotels will likely set another record in 2006.

For 2005, both statewide average daily room rates and revenue per available room a critical measure of profitability surpassed records set in 2004. Hawaii also ranked behind New York City as second among the top 25 U.S. hotel markets for average daily rates, revenue per room and occupancy.

According to Stan Brown, Marriott International’s vice president for Pacific Islands and Japan, 2005 proved to be a banner year for Hawaii’s top industry. “We should certainly celebrate that,” said Brown. “There were a lot of successes in the industry as a whole. It was certainly great for employment, great for business, a great rebound.”

Brown added, “The start of 2006 looks better than the first quarter of 2005, so that’s very encouraging as well.”

The statistics came a day after the state reported that a record 7.46 million visited Hawaii last year and spent a record $11.5 billion. Visitor arrivals are projected to top 7.6 million this year.

The hotel industry’s gains last year were largely driven by strong growth in higher-spending markets such as business travelers, honeymooners and visitors from the U.S. East, reported Hospitality Advisors president, Joseph Toy.

The industry also set a December record in average daily rates and revenue per available room of $189.98 and $145.36, respectively. December occupancy grew 5.4 percentage points year-over-year to 76.5 percent.

Compiled by Smith Travel Research with Hospitality Advisors, the survey averages more than 141 properties representing some 48,222 rooms, or 79.5 percent of all lodging properties with 20 rooms or more in the state including full service, limited service and condominium hotels.

Starting April 27, Indianapolis-based ATA will add daily flights between Honolulu and Los Angeles and Ontario, CA. The carrier will also launch four daily flights from Oakland to Honolulu, Hilo and Maui to replace former San Francisco routes. ATA service to Hawaii from the West Coast will expand from 7 to 11 daily flights.