Hawaii hotels set monthly records for June in total revenue, room revenue, revenue per available room and average daily room rates.
Hotels earned $289 million in room revenue in June, according to a report due out Thursday by Hospitality Advisors LLC and STR. That played a significant role in helping the state reach a new midyear hotel revenue record of $2.66 billion, which was 4.3 percent greater than the same period in 2013. Midyear room revenue alone rose 4.3 percent to $1.8 billion.
"In March, April and May, the industry was concerned because the booking pace had fallen and people were waiting to purchase until closer to their arrival dates," said Joseph Toy, president and CEO of Hospitality Advisors LLC. "There were concerns about summer, but everyone has been pleasantly surprised by the strong pickup over the last four months."
While June occupancy grew a scant 0.5 percentage points to 76.3 percent, Toy said that the market was buoyed by a 3.3 percent rise in average daily rate, which set a monthly record when it climbed to $235.82. Statewide revenue per available room (RevPAR) increased 3.9 percent to $179.93, which also was a June high. RevPAR, considered in the industry to be the best measure of hotel performance, is calculated by multiplying the average daily room rate by occupancy.
"We’re cautiously optimistic about the balance of the year," said David P. Carey, president and CEO of Outrigger Enterprises Group. "We’ve seen some velocity in bookings and some recovery from the softness in the first part of the year that wasn’t as soft as we originally thought. So far so good. I think next year’s going to be OK, too."
The monthly results contributed to Hawaii’s midyear ranking as the second best hotel market in the nation for ADR and RevPAR, and the fifth best for occupancy. During the first six months of the year, occupancy at Hawaii hotels declined 0.7 percentage points to 77.3 percent from the same period a year ago. June occupancy was significantly below the state’s best-ever hotel occupancy of 88.8 percent, which was attained in July 2005. Nonetheless, the results did come close to 78 percent occupancy, which is the benchmark for industry strength. Also, a 5.4 percent gain in room rates to $240.33 offset the minimal drop in occupancy. As a result, hoteliers saw midyear RevPAR grow about 4.4 percent from the same period last year to $185.78.
Toy said market growth is likely to continue moderating, especially in particularly strong markets like Oahu.
"For Oahu, we had such velocity in our rates over the past three years that it should come as no surprise to anyone in the industry that we would moderate," he said. "The rate of ADR growth is less than half of what it was at this time last year."
Year to date, Oahu hotels realized 83.6 percent occupancy, a meager 0.5 percent drop from the same time period in 2013. However, room rates increased by 4.9 percent to $214.92 and RevPAR reached $179.67, a year-over-year gain of 4.2 percent.
But Toy added that neighbor island hotel markets, especially Hawaii island, still have room to grow.
"It’s property-specific, but some neighbor island hotels still have a way to go," he said. "The Kohala Coast still has a number of resorts that need to be renovated and repositioned. Until that happens, they’ll stay behind the curb a little bit."
At 63.2 percent, Hawaii island’s year-to-date occupancy lagged Oahu’s by 20.4 percentage points.
