Hawaii hotel occupancy fell in May as softness continued

Summer isn’t coming in hot for Hawaii hoteliers, who saw hotel occupancy drop to its lowest level of the year in May and are expecting a continued slowdown.

Statewide hotel occupancy for Hawaii in May dropped to 71.2%, a 1.3% loss from May 2023, according to a report from STR, a company that supplies data and analytics to the hospitality industry worldwide.

The average daily rate paid for a Hawaii hotel room in May fell 1% year over year to $342, according to STR. Revenue per available room, or RevPAR, considered one of the better measures of performance because it measures the revenue generated by each available room at a hotel, decreased 2.3% year over year to $243.

Lynette Eastman, general manager of the Surfjack Hotel &Swim Club in Waikiki, said, “It’s ugly out there. We may get last-minute pickup for the summer, but will it be enough to be as good as last year or the year before? I doubt it. It’s going to fall a little short.”

The statewide decline in May was mainly because of Maui’s hotel performance, which has lagged in the wake of the Aug. 8 wildfires, which killed at least 101 people and at one point caused some 7,200 Maui fire survivors to turn to Maui hotels for shelter.

Jerry Gibson, president of the Hawai‘i Hotel Alliance, said, “Maui is continuing to pull down state results.”

STR reported that Maui’s occupancy in May decreased 7.1% year over year to 58.3%. Gibson said the results were likely due to fire survivors and disaster workers moving out. He estimates that fewer than 1,000 fire survivors and hotel team members are now sheltering in Kaanapali.

The average daily rate paid for a Maui hotel room in May fell to $517, a 4.2% decline from May 2023, while RevPAR during the same period decreased 10.9% to nearly $302. Worse yet, Maui hoteliers report that operating costs are rising due to the shift from survivors and disaster workers to leisure travelers, who require a full range of services at a time when occupancy has declined.

Gibson said Maui fared the worst of the islands, which experienced mixed results. While the islands experienced an aggregate RevPAR drop of 2.3%, he noted that Oahu’s RevPAR went up 3.7% to more than $213 — a sign of a fair month.

STR reported that Oahu’s May occupancy rose a scant 0.3% year over year to 78.4%, while ADR increased 3.4% to nearly $272.

“We started to pick up a little bit in May on Oahu,” Gibson said, “and there was some fairly good group business.”