By Allison Schaefers
Courtesy of The Honolulu Star-Advertiser/McClatchy-Tribune Regional News
Hawaii's hotel room revenue set a new August record of $307.9 million, pushing the three-month summer season to an all-time high of $880.5 million, according to a report to be made public today by Smith Travel Research and Hospitality Advisors LLC.
Statewide occupancy rose 4 percentage points to 81.3 percent in August, and average daily rate (ADR) rose a little more than 10 percent to $214.55. Revenue per available room (RevPAR), considered the best measure of hotel performance, rose nearly 16 percent to $174.43.
"Pent-up demand, easing of visa restrictions and post-earthquake recovery in Japan arrivals led to a remarkable summer season," said Joe Toy, Hospitality Advisors' president and CEO. "When adding food and beverage, retail and other revenue sources, Hawaii hotels generated $1.3 billion during the 2012 summer season."
Statewide occupancy averaged 79.9 percent for June, July and August combined, which was a 5.2 percentage-point gain from the same period in 2011. Summer ADR increased almost 9 percent to $210.22, and RevPAR rose by nearly 17 percent to $168.01.
While gains spread across all the islands, Oahu continued to lead. Occupancy on Oahu rose 3.2 percentage points, filling up to 90 percent of hotel rooms. ADR grew almost 12 percent to $196.96, and RevPAR increased by nearly 21 percent to $177.26.
August occupancy in Waikiki, the state's best summer hotel market, increased 3.1 percentage points to 90.5 percent. Waikiki's ADR rose by just over 16 percent to $195.55, and RevPAR grew by just over 20 percent to $176.97.
Oahu benefited from gains from Japan, Australia, China, Korea and the mainland, Toy said.
"What's really good news for the market has been all the growth in air seats and supply," said David Carey, president and CEO of Outrigger Enterprises. "It's all been very helpful in maintaining the vitality of the marketplace."
While additional air seats have helped the neighbor islands regain strength, they still have a way to go, said Keith Vieira, senior vice president and director of operations for Starwood Hotels and Resorts in Hawaii and French Polynesia.
"Since summer is traditionally a transient visitor time, Maui and Kauai do relatively well," Vieira said. "The Big Island relies more on year-round group travel, so it had more challenges this summer."
Vieira said the number of groups is picking up, but group sizes have decreased.
"The government has had travel reductions, and there is an overall fear of looking frivolous for many businesses," he said.
The AIG effect, a term coined to explain the strain on luxury corporate travel after an ill-timed American International Group retreat drew criticism, is still holding down group travel decisions, Vieira said.
Still, a boost in August visitor arrivals from the U.S. helped bolster Maui's hotel performance, Toy said. On Maui, August occupancy rose 4.9 percentage points to 75 percent, ADR increased almost 4 percent to $263.35 and RevPAR rose by nearly 10 percent to $197.51.
Strong domestic tourism also contributed to gains on Kauai, Toy said. In August, Kauai's occupancy rose 2.1 percentage points to 73.9 percent, ADR increased by almost 5 percent to $226.11, and RevPAR jumped nearly 8 percent to $167.10.
While the Big Island also showed August gains, it continued to lag, Toy said. August occupancy climbed 7.3 percentage points to 65.6 percent, and ADR rose just over 2 percent to $198.55. RevPAR increased nearly 15.2 percent to $130.25.
Across the isles in August, Toy said gains in visitors staying at upscale hotels drove most of the revenue increases. Luxury hotels, which reached an ADR of $445.65, were 80 percent full in August. Rooms in those hotels, which retailed for an ADR of $235.10, were 88.1 percent filled.
August results helped push statewide performance higher during the first eight months, Toy said. Occupancy rose 4.7 percentage points to 78.3 percent, and ADR grew by nearly 8 percent to $204.87. As a result, RevPAR increased nearly 15 percent to $160.4.
Vieira said that he's "cautiously optimistic" about hotel gains.
The number of air seat specials from the West Coast on sale for under $450 gives him pause because it suggests that there could be some fall softening from Hawaii's largest market, Vieira said.
"However, it's hard to tell if that's the result of new seats or delayed bookings," he said.
As the peak holiday season, which stretches from around Christmas to New Year's, approaches, Vieira said a good sign is that some Starwood hotels are already sold out.
"There's nothing on the horizon that shows that the holidays won't be at a peak," he said.
Carey said Outrigger is seeing a solid performance into fall and beyond.
"Bookings even at the beginning of next year are looking pretty solid," he said.
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