The U.S. lodging industry is still growing, and Hawaii will remain one of its most important hotel, timeshare and vacation rental markets in the coming year.
That was the opinion of several visitor industry experts at the Hawaii Tourism Conference on Thursday.
“We are setting more records, selling more rooms than we ever had, so of course we’re building more hotel rooms,” said Amanda Hite, president and CEO of Tennessee-based STR, which provides research to the hotel industry. “Things are good. Hotel operators are very concerned, worried that we are falling off a cliff right now, and we aren’t.”
Hite’s forecast expects U.S. hotel occupancy to fall a scant 0.3 percent in 2017. Supply is anticipated to climb by 2 percent, demand by 1.6 percent, average daily rate by 3.1 percent and revenue per available room by 2.8 percent. However, Hite said the increase in room rates is slow despite high occupancy.
“It’s a different story on Oahu than the total U.S., which is pretty promising,” Hite said. “To me there’s a lot more incentive travel coming that hasn’t been there. That’s very good news given that the economy is concerning from a confidence standpoint.”
Through August, Hite said Oahu’s occupancy came in at 84.9 percent, the second best in the nation behind San Francisco/San Mateo. During the same period on Oahu, the average daily rate was at $226, right behind New York and San Francisco/San Mateo, she said. Oahu’s transient hotel room demand dropped 0.9 percent through August, but Hite said its group demand rose 5.9 percent.
Based on these results, Hite said Oahu’s revenue per available room is forecast to finish the year anywhere from flat to 5 percent growth. She expects that trend to continue into 2017.
Joseph Toy, president and CEO of Oahu-based Hospitality Advisors LLC, said so far the industry is on track to meet those expectations. Toy said statewide hotel occupancy through August rose to 79.9 percent, a 0.5 percentage point change.
Toy noted hotels brought in more than $1 billion in revenue this summer, and he expects to see a continuation of hotel industry records.
“We’ve done well so far and are on record pace,” Toy said. “There are a lot of good things ahead for Hawaii.”
Timeshare is no exception, said Howard Nusbaum, president and CEO of the American Resort Development Association.
“Hawaii is the timeshare industry’s most sought after destination,” he said.
Nusbaum said timeshare visitors to Hawaii make up about 9.4 percent of the state’s total visitor market. Currently, they have 84 timeshare resorts to choose from and are filling them up at an occupancy of 87.7 percent — the nation’s highest timeshare occupancy during the second quarter of 2016.
The industry employs more than 4,000 workers statewide and contributes $70.4 million in payroll, Nusbaum said.
“There is greater opportunity for more timeshare in Hawaii,” he said. “Urban environments are popular, so it makes sense that we could see some more development on Oahu. I think Maui would be growing faster than it is if the real property tax on timeshare was not the highest in the U.S.”
Toy said the success of timeshares and vacation rentals has caused a product shift in the traditional hotel market. Part of the shift is due to hotel conversions to timeshares and condos, he said. More individual owners also are taking their condominiums out of hotel rental pools and using shared economy sites like Airbnb, VRBO and HomeAway to market them on their own, Toy said.
