Sign Up for Our Daily Newsletter
Hawaii's hotel industry ended a tumultuous year with statewide hotel revenues falling by $741 million to $3.59 billion, according to a survey compiled by Smith Travel Research in conjunction with Hospitality Advisors.
Nearly two-thirds of the loss came from a 17.1 percent drop in room revenue, due to the combined fall in occupancy and substantial decline in the statewide average daily room rate (ADR). The 2009 results were in line with declines in visitor arrivals and expenditures from all major geographic areas and market segments.
Oahu ended the year with the highest island occupancy of 73.3 percent, or 1.7 percent lower than the prior year. Hawaii's Big Island achieved the lowest occupancy of 54.5 percent compared to last year's 59.8 percent. Kauai suffered the largest decline in occupancy of 10.1 percentage points, to 60.2 percent. Maui led the state in ADR of $232.54, but was 14.3 percent lower than the prior year. In particular, luxury resorts in the Wailea regions experienced a substantial decline in ADR.
Despite the substantial decline in Hawaii's hotel industry, the state remained among the top five US destinations in occupancy, ADR and Revpar (revenue per available room).
“2009 has been a very tough year for the visitor industry both in Hawaii and nationally,” said Joseph Toy, president of Hospitality Advisors. “Since April 2008 when the sharp downturn began, Hawaii has had 21 consecutive months of hotel revenue losses that now amount to over $1.14 billion, with $741 million of the decline occurring in 2009,” Toy said. “The speed and depth of the downturn was unprecedented, and the hotel industry has never experienced the level of rate discounting that is still in the market."
Despite the challenging industry results for 2009, however, Toy noted that both visitor arrivals and hotel demand seemed to have moderated somewhat during the fourth quarter.
“While there has been some modest recovery in occupancy over the last few months, it has been uneven, and in some cases property-specific. However, it will take a much longer period to recover from the substantial price reductions that have occurred in the market,” Toy said.