The first quarter of 2020 started off much like the previous decade for Hawaii's tourism industry, with steady, year-over-year growth in visitation and total revenue. Then, in mid-March, the impact of the coronavirus pandemic and subsequent nosedive in travel started to hit the Aloha State as shelter-at-home orders became more common, according to data from the Hawaii Tourism Authority (HTA).
In March, visitor spending and arrivals were each down more than 50% compared with March 2019, while in January and February, spending by visitors increased 5% year over year.
The first flight cancellations to Hawaii came in February, initially affecting the China market, then expanding to South Korea and Japan. By the end of March, the majority of flights to Hawaii were canceled, and the industry started to see the impact in earnest. On March 13, the majority of cruise lines voluntarily suspended excursions in U.S. waters. On March 17, Hawaii Gov. David Ige asked visitors to postpone their trips, and the counties started issuing stay-at-home orders. By March 26, all passengers arriving from out of state were required to abide by a mandatory 14-day self-quarantine. By the end of the month, roughly 100 visitors per day were arriving in Hawaii, down from the roughly 30,000 daily typically seen.
Accordingly, visitor spending fell 52%, arrivals declined 54% and the total number of visitor days dropped 50% in March. Those drastic reductions offset the gains of January and February, resulting in declining arrivals and revenue for the first quarter. Spending for the quarter was down 14%, while arrivals dropped 16%.
The impact on Hawaii's hotels mirrored the reduction in tourism for the Aloha State. In March, statewide revenue per available room (RevPAR) decreased 44%, average daily rate dipped 2%, and occupancy fell to 45%, a 34 percentage point drop. Total hotel revenue for March dwindled to $207 million, down 45% versus March 2019. Room supply during March fell less than 1%, according to the HTA report, but as hotels took rooms out of service at the end of the month, the decline in inventory was not reflected in the March data.
Hawaii was under quarantine and stay-at-home orders for all of April, and the decrease in room inventory in addition to the reductions in arrivals and revenue are sure to be more dramatic when next month's data is reported.
For the first quarter of 2020, the ADR at Hawaii hotels grew 5%, while RevPAR dropped 8% and occupancy fell 10 percentage points, to 71%. It all added up to a 9% decline in room revenues.
During the first quarter, luxury-class properties experienced greater percentage losses compared to midscale and economy hotels, with the former reporting a 12% drop in RevPAR, while the latter saw a 5% fall in RevPAR.
In January, RevPAR for Hawaii hotels rose 12% and room revenue increased 11%, and occupancy was up nearly 5 percentage points, to 84%. But by February, hotels in the Aloha State were already seeing business slow down. Compared to February 2019, RevPAR dropped 4%, room revenue fell 6% and occupancy ticked down 3 percentage points.