Hawaii hotels took in $247.3 million in room revenue in November, a record for the month of November.
Statewide occupancy rose 3.8 percentage points to 74.4 percent. Setting new November highs, the statewide average daily room rate rose 5.08 percent to $195.36, and revenue per available room, or RevPAR, increased 10.74 percent to $145.35.
While all islands showed year-over-year improvements in November, Oahu drove the state’s success. There was a 22.8 percentage-point occupancy difference between Oahu, which filled 84.9 percent of its hotel rooms, and Hawaii island, which filled only 62.1 percent of its inventory.
"The large occupancy difference separating the islands was indicative of the unevenness of the recovery," said Joe Toy, president and CEO of Hospitality Advisors LLC, which compiles the numbers. "So, while it’s great news about Oahu and the statewide numbers are good, we still have problems in various markets."
Oahu has enjoyed considerable resurgence this year due to the rebound in the Japanese market, continued strengthening from Canada and Oceania and the growth of emerging markets such as Korea, Taiwan and China.
"International travelers like that they can fly directly into Oahu, and many prefer the greater variety of shopping there," said Barry Wallace, executive vice president of Hospitality Services for Outrigger Enterprises Group.
Oahu also benefited from the substantial infrastructure investment that has taken place in Waikiki over the past decade, Wallace said.
"Our inventory has never been in better condition," he said. "A lot is driven by the refreshed product in Waikiki; it’s not the Waikiki that we had 10 years ago."
The challenge for hoteliers this year is to spread some of Oahu traffic to the neighbor islands, Wallace said.
"We’re doing quite well on Oahu. Our occupancy and everyone else’s is in the mid- to high 80s, which is a comfortable level. We don’t need to go any higher or it pushes the staffing, maintenance and service levels," he said.
While Oahu is still the best-priced island and in terms of inflation adjusted dollars is cheaper than it was in 2007, Wallace said room sellers are offering greater discounts on the neighbor islands, where prices in real dollars are still below what they were five years ago.
"When occupancy is running in the low 70s like on Maui or even lower on the Big Island, the discounts offered are pretty substantial to try to stimulate visitors to switch from one island to another," he said.
Toy said the good news is that Maui has done fairly well in 2012, especially during the second half of the year.
"Wailea is having an outstanding season," he said.
All of the Starwood properties at Kaanapali are hitting their target average daily room rates in the $300s, said Keith Vieira, senior vice president and director of operations for Starwood Hotels & Resorts in Hawaii and French Polynesia.
"It’s important that we try to keep them growing in the 10 percent range," Vieira said.
As Maui fills up, Toy said, overflow typically goes to Hawaii island, which is usually the last island to recover.
The recent news that Hawaiian Airlines is expanding its fleet with an eye toward the neighbor islands also bodes well for the recovery, he said.
The airline announced last week that it intends to acquire up to 25 new long-range, single-aisle aircraft largely for nonstop flights between the neighbor islands and the 10 cities it currently serves in the U.S. West.
"Visitors want to get to where they want to go in the shortest amount of time and the least difficult way possible," Vieira said. "If you can fly direct versus stopping in Honolulu, that’s of great value to the visitor."
Hawaii island ends up competing with faraway destinations like Europe if travelers from Phoenix have to stop in Honolulu and what could have been a six-hour trip to the neighbor islands turns into a 12-hour haul, he said.
"If they are looking at a six-hour travel window, Hawaii competes instead with the U.S., Canada and Mexico, and we have a greater chance of getting that traveler," Vieira said. "Ultimately, the more direct flights into the neighbor islands, the better they will do."
While the neighbor islands are still rebounding from the drops of 2008 and 2009, he said, they are improving from last year.
Year-end hospitality numbers are not available yet; however, November’s results put the state on pace to set several possible records in 2012, said Toy. Through the first 11 months of 2012, statewide occupancy rose 3.9 percentage points to 77.2 percent, the average daily room rate increased by 7.6 percent to $202.06 and RevPAR grew nearly 13.4 percent to $155.99.
