Insight Hawaii Insight Alternative accommodations thriving in Hawaii By Tovin Lapan / March 31, 2017 Share 1 -- The Hawaii Tourism Authority released two studies in March that demonstrate the impact of alternative accommodations on the Islands' tourism market.While the total share of Hawaii visitors staying in traditional accommodations (e.g. hotels and resorts) has fallen in the last few years, the demand for alternative accommodations, such as house and condo rentals, has risen. The share of visitors that stayed in a "rental house" increased from 4.6% in 2010 to 7.4% in 2015, according to the HTA.The study also indicates that many travelers are exclusively seeking out alternative lodging, with 15% of those surveyed saying they would not visit Hawaii if those types of accommodations were not offered. "Alternative accommodations, particularly rentals of homes and condos by visitors, has been a segment of Hawaii's tourism industry for more than 20 years, but has grown significantly in recent years due to increased demand by travelers," said Daniel Nahoopii, HTA director of tourism research. "Spending by these visitors generated an estimated $1.87 billion for Hawaii's economy in 2016." Since 2000, the proportion of Hawaii visitors staying in hotels and resorts has fallen from 68% to 62%. One of the main motivations, according to the research, is the relatively lower cost. The median nightly rate of home and vacation rentals is approximately $170, while the 2015 average daily rate for hotels was $244. Another key factor in the decision appeared to be bigger parties who are looking for larger accommodations with all of the amenities of home, such as a kitchen and living area. One report from JLL titled "Hawaii's Home and Vacation Rental Market: Impact and Outlook" surveyed Hawaii visitors and rental property owners for their tendencies, opinions and habits. The other study, "The Impact of Vacation Rental Units in Hawaii" from SMS, digs deeper into the vacation rental market's impact on residential housing and how the vacation rental market operates in the state. The JLL report suggests that vacation rentals do more to expand the market than take away from hotels and resorts. The researchers found little overlap among those who stay in vacation rentals and hotel users. The market share of residential units used for vacation rentals is expected to grow slowly over the next five years and peak at 12% total. Between 5% and 9% of Hawaii residents are currently utilizing their properties as vacation rentals statewide. The survey revealed that 60% of Hawaiian residents offering vacation rentals are doing it out of financial necessity, and a majority of respondents do not wish to continue the practice."Our responsibility at HTA extends beyond tourism marketing to doing what's best for communities statewide. These studies help residents, policy makers and tourism stakeholders to determine what actions are appropriate going forward," Nahoopii said. The issue of vacation rentals is a controversial one in Hawaii, where housing prices are steep in certain areas. Last year the state legislature passed a bill that would authorize companies like VRBO and Airbnb to collect state taxes when taking bookings. Gov. David Ige vetoed the bill, however, citing concerns about not adequately addressing illegal rentals and possible promoting even more rentals.The bill, with some modifications, is moving through the legislature once again this year. For years the state's lawmakers have discussed ways to address the vacation rental market and worries that it is driving up residential housing prices. About one quarter of the state's total lodging inventory is made up by vacation rentals, most of which are operated without the proper government approvals, according to the Hawaii Tourism Authority. The current bill making its way through the state senate would push the online operators to insure compliance with local land laws and regulations, and would allow for state tax collection. "We want to make sure that this bill doesn't hurt the good actors, but also gives us an opportunity to go after the bad actors out there," state Sen. Glenn Wakai, chairman of the senate tourism committee, told the Associated Press. While Airbnb gets much of the attention in cities coping with tight housing stock, such as San Francisco, the online booking company accounts for 9% of Hawaii listings, lagging far behind VRBO, which hosts 38% of the listings, according to the SMS report. The report indicates unavailable housing stock, which includes vacation rental units, increased by nearly 12% from 2011 to 2014. This growth was more than twice the rate for vacant and available units, and almost 15 times the growth rate for the housing stock. The number of vacation rental units increased from 2,438 in 2005 to 10,768 in 2015, according to the study. "The fact that their number is increasing faster than housing stock suggests either that the production of seasonal units has been high and getting higher, and/or that some of the housing stock is being diverted to seasonal use," the report states.