The Hawaii hotel industry had a great summer and a particularly strong August. Given the continued growth in air seats, I believe we should see similar levels of RevPAR growth through the end of 2015.
By Allison Schaefers
Hawaii’s hotel industry wrapped up a strong summer with a record August performance that helped the sector hit a new seasonal benchmark of $1.45 billion in revenue.
Hotels in the state set monthly records in August for hotel revenue; average daily rate, or ADR; and revenue per available room, or RevPAR, according to a report due to be released today by Hospitality Advisors LLC and STR Inc. In August, million in revenue.
Joseph Toy, president and CEO of Hospitality Advisors, said the new August revenue record aligned with year-over-year gains in the high-yielding independent traveler market, which rose 7 percent from August 2014, and the meetings, conventions and incentive market, which posted a 14.9 percent gain.
Statewide occupancy rose 2.4 percentage points in August, with 81.2 percent of rooms occupied. ADR increased by 2.8 percent to a new August high of $249.67. RevPAR rose 5.9 percent to $202.73. RevPAR, considered in the industry to be the best measure of hotel performance, is calculated by multiplying ADR by occupancy.
Altogether, statewide hotel occupancy during the summer season averaged 81.7 percent, a 2.8 percentage point increase compared with last year. From last summer to this summer, ADR for Hawaii hotels rose 4.9 percent to $251.
Summer RevPAR reached $205 with an 8.6 percent year-over-year gain. Total summer hotel room revenue hit an all-time high of $984 million.
The hotel market across all islands gained strength in August. For the month, hotels on Oahu were 88.6 percent full, but Toy said the gain in occupancy reflected “continued compression in room supply due to the ongoing renovations at the Ohana Waikiki West and the JW Marriott Ihilani.”
Such market tightening helped room rates on Oahu grow by 1.3 percent to $230.82 and RevPAR grow by 1.6 percent to $204.51, both records for August.
Occupancy at Maui hotels rose 2.8 percentage points to 73.9 percent. The gain was primarily due to the 3.7-percentage-point gain in occupancy for the Lahaina, Kaanapali and Kapalua markets. Maui room rates climbed 7.5 percent to an August high of $311.61. Maui RevPAR increased 11. 7 percent to $230.28.
Visitor arrivals to Kauai increased by 2.3 percent, supporting a 3.1 percentage-point gain in occupancy to 72.3 percent. Room rates climbed 6.8 percent to set an August record of $256.86. RevPAR grew 11.6 percent to $185.71, falling just short of the August high of $186.03 set in 2007.
Hotels on Hawaii island were 70.1 percent full, a remarkable 9.3 percentage-point gain over August last year. The Big Island benefited from visitor arrival growth particularly from the U.S. West, Canada and China. Room rates decreased a modest 1.4 percent to $231.09. Strong occupancy more than offset the slight dip in ADR, leading to a new August RevPAR record of $161.99 , a 13.6 percent increase from the prior year.
Hawaii hotels also topped nationwide August results. In comparison, STR Inc. reported that theU.S. hotel industry’s occupancy decreased 1.4 percent to 70.7 percent; its ADR was up 3.6 percent to $122.32; and its RevPAR increased 2.2 percent to $86.46.
Nationwide performance results for the month were skewed by a later Labor Day weekend, Jan Freitag, STR’s senior vice president for lodging insights, said in a press release.
“Labor Day weekend not only fell in an earlier week last year, it actually fell in the previous month,” Freitag said.
Despite the decrease in occupancy, RevPAR in the U.S. has now increased year over year for 66 consecutive months.