Tourism business across the Hawaiian Islands remained robust in the final few months of 2015 as the destination generated a new hotel revenue peak of $399 million in November.
Hawaii hotels also posted a 76.7% occupancy rate during the month, up 3.7 percentage points over November 2014, according to a Hospitality Advisors and STR report released Jan. 19.
Additionally, average daily room rates (ADR) climbed 3.1% statewide to $225.25 and revenue per available room (RevPAR) jumped 8.3% to $172.77, both new highs for Hawaii in November.
“The November results show that the market remained quite strong toward the end of last year,” Joseph Toy, president and CEO of Hospitality Advisors, said in a statement. “And we expect 2015 the be another record year for Hawaii’s hotel industry.”
November was also the third consecutive month of new ADR and RevPAR records for Waikiki, where occupancy climbed 4.4 percentage points to 86.2%; ADR increased just over 5%, to $213.02; and RevPAR surged nearly 11%, to $183.62.
Toy noted, however, that some of those impressive returns can be attributed to compression resulting from ongoing renovation projects in both Waikiki and on Oahu’s west coast at Ko Olina.
Barry Wallace, the executive vice president of hospitality services for Outrigger Enterprises Group, said his company saw business improve as 2015 wore on.
“Pace picked up in fall of 2015, so that year-over-year improvement was greater in the latter part of the year than in the earlier part,” he explained. “Going into 2016, booking pace is strong, but it is important to remember that on Oahu all properties experienced very high occupancy in 2015, so there is not much room for improvement.”
Busy hotels in Waikiki likely boosted Kauai’s hotel business in November. The Garden Isle enjoyed the largest year-over-year occupancy increase statewide during the month as the metric climbed nearly 6 percentage points, to an islandwide average of 68.2%.
Meanwhile, RevPAR on Kauai soared 18.4% during the month to $152.08 and ADR jumped 8.5% to nearly $223: Both figures were new all-time highs for the island in November.
Toy agreed with Wallace regarding 2016’s solid start, but he cautioned that the year could come with a few hurdles, as well.
“While we believe a lot of momentum continued to be carried into 2016, we do see some geopolitical and economic headwinds that may temper the market later in the year,” Toy said, mentioning concerns about a current global economic slowdown and tensions in the Middle East. “Nonetheless, the dynamics in Hawaii remain favorable given lower airfares, [and] record air seat capacity forecasted for the first quarter.”
Wallace, on the other hand, brought up an entirely different challenge for Hawaii’s statewide hotel industry.
“Growth in arrivals to Hawaii is significantly greater than growth in hotel occupancy,” he said. “More and more travelers, especially international [visitors], are choosing condo, timeshare and other alternative accommodations, many of which enjoy lesser tax rates, [and the] short term online rental market, such as VRBO and Airbnb, is booming.”