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Peak summer travel in Hawaii increased despite Hurricane Lane

Written by editor

Hawaii hotels reported increases in revenue per available room and average daily rate even as Hurricane Lane approached the islands.

Hawaii hotels statewide and in Maui County, Kauai, and Oahu reported increases in revenue per available room (RevPAR) and average daily rate (ADR) in August, even as Hurricane Lane’s approach to the Hawaiian Islands increased cancellations to reduce occupancy.

Hotels on the island of Hawaii reported declines or flat results in RevPAR, ADR and occupancy for the third straight month, with Lane contributing to the downturn caused by the Kilauea volcano eruption.

The Hawaii Hotel Performance Report released today by the Hawaii Tourism Authority (HTA) for August 2018 and year-to-date includes a summary of the results for the peak summer travel season. HTA’s Tourism Research Division issued the report’s findings utilizing data compiled by STR, Inc., which conducts the largest and most comprehensive survey of hotel properties in the Hawaiian Islands.

Hawaii hotels statewide reported RevPAR of $220 (+0.7%) and ADR of $282 (+4.4%) in August, which offset a 2.8 percentage point decline in occupancy to 78.3 percent. All classes of properties reported year-over-year ADR gains for August. Luxury Class and Upper Upscale Class hotels reported RevPAR losses this month, with drops in occupancy offsetting ADR growth (Figure 1).

Year-to-date through August, Hawaii hotels statewide and for all four island counties continued to report good results in RevPAR and ADR. However the strength of these figures is largely built on the first five months of the year. Occupancy rates statewide and for each island county through the first eight months are similar to a year ago (Figure 2).

Jennifer Chun, HTA tourism research director, noted, “August is typically a strong month for the hotel industry, but news coverage about Hurricane Lane heading straight at Hawaii, and travelers being able to utilize airline cancellation fee waivers likely impacted results in the latter half of the month. Occupancy was down across the state in August compared to a year ago. However, the occupancy in August 2017 was 81.1 percent, which was the highest occupancy for any August since 2006.”

Despite the decline in August occupancy for all four island counties, Oahu, Maui County, and Kauai hotel properties all reported RevPAR and ADR increases for the month.

Kauai hotels led the counties in RevPAR growth in August, earning a 2.4 percent increase to $211, which was boosted by ADR of $299 (+8.4%), offsetting occupancy of 70.7 percent (-4.1 percentage points).

Maui County hotels reported the highest RevPAR at $267 (+1.7%) in August, driven by growth in ADR to $371 (+7.6%). Occupancy for Maui County hotels averaged 72.0 percent (-4.1 percentage points).

Oahu hotels reported growth in RevPAR to $215 (+2.2%) in August due to an increase in ADR to $254 (+3.8%), which offset a 1.3 percentage point decrease in occupancy to 84.8 percent.

Island of Hawaii hotels experienced a 10.5 percent drop in RevPAR to $164 in August, and was the only county to report a decrease in ADR ($246, -2.0%). Occupancy also declined by 6.3 percentage points to 66.8 percent.

Of the state’s resort regions, Wailea properties led in RevPAR at $470 (-1.3%), ADR at $564 (+5.0%), and occupancy of 83.3 percent (-5.3 percentage points) in August.

The Lahaina/Kaanapali/Kapalua region reported growth in RevPAR (+2.5% to $222) and ADR (+8.7% to $310) in August. Occupancy declined by 4.3 percentage points to 71.7 percent.

Waikiki hotels grew RevPAR by 2.0 percent to $212, with an increase in ADR to $250 (+3.9%) offsetting lower occupancy (84.9%, -1.6 percentage points).

Kohala Coast hotels reported a 14.9 percent declines in RevPAR to $221 in August, a result of decreases in both ADR ($350, -2.1%) and occupancy (63.1%, -9.5 percentage points).

Maui County and Kauai Properties Led Summer Hotel Performance

The summer months of June, July and August are historically a peak travel season for the Hawaiian Islands. However, the performance of hotels on the island of Hawaii were affected by the Kilauea volcano eruption throughout the summer, as were all the islands due to Hurricane Lane in August.

Despite the challenges of these natural disasters, hotels statewide grew RevPAR to $232 (+3.0%) in summer, uplifted by an increase in ADR to $285 (+4.9%), which offset a decline in occupancy to 81.3 percent (-1.5 percentage points) (Figure 8).

Chun commented, “All things considered, it was a good summer overall for the hotel industry on a statewide level and especially for hotel properties in Maui County and Kauai, as well as Oahu. Hotels on the island of Hawaii suffered a downturn throughout summer because of the dampening effect that Kilauea’s eruption had on travel bookings.”

Hotel properties in Maui County and Kauai generated the best overall results in the summer. Maui County hotels saw increases in RevPAR to $297 (+7.6%) and ADR to $386 (+9.3%), which compensated for a decline in occupancy to 76.8 percent (-1.2 percentage points).

Kauai hotels reported growth in RevPAR to $229 (+7.9%) and ADR to $303 (+8.9%) in summer, while realizing a small decline in occupancy to 75.6 percent (-0.7 percentage points).

Oahu hotels also reported solid results for the summer, earning RevPAR of $219 (+2.0%) and ADR of $252 (+2.9%) to overcome a small dip in occupancy to 86.8 percent (-0.8 percentage points).

Island of Hawaii hotel properties recorded decreases in RevPAR to $170 (-8.2%), ADR to $244 (-0.7%) and occupancy to 69.9 percent (-5.7 percentage points).