Rising room rates set record

By COLIN M. STEWART

Tribune-Herald staff writer

Big Island hoteliers are upping their room rates more quickly than the rest of Hawaii as the industry experiences a significant boost in travelers coming here from around the world.

The state set records for room charges in February, with average rates surging 13 percent to $233.30 a night, according to a study issued this week by private consultants Smith Travel Research and Hospitality Advisors. That’s the highest average daily rate ever recorded for the month of February.

Average daily room rates on Oahu hit a record high of $209.18, while on Hawaii Island they jumped nearly 20 percent for a record of $175.54.

The gains come as more travelers visit the islands from the western U.S., Japan and other places, Hospitality Advisors LLC noted in a press release.

“Hawaii’s hotel industry had a remarkable February and is well on its way to set a new first-quarter record in hotel revenue,” the consulting company’s CEO, Joseph Toy, said.

Doug Arnott, owner of Arnott’s Lodge and Hiking Adventures in Hilo said that he’s noticed a definite upswing in business, largely in response to efforts he and his staff have undertaken to make the rooms more attractive to guests.

“We’ve been able to raise our rates, maybe about 15 percent,” he said. “For us, it’s mainly been driven by all our hard work. We’ve revamped our housekeeping. We’ve started to spend a significant amount of money on upgrading — we’ve put in
nice ceramic tile bathrooms and kitchens. We’re putting in significantly nicer kitchen floors.”

Additionally, he said, the lodge has started packaging some of its rooms in a different fashion to appeal to guests looking for more room.

“We’re marketing our two-bedroom units with a kitchen as a deluxe suite. Each of those rooms would normally sell for $60 or $70 a night and share the kitchen, but more people are willing to spend $100 for the entire two-bedroom apartment with one of the rooms locked off. … That way they have more space. We’re selling those like hotcakes,” Arnott said.

Another factor has been the industry-wide influence of the travel rating website TripAdvisor.com, he said.

“TripAdvisor is really driving the industry,” Arnott said. “It’s created a revolution. You either have a good rating and you do extremely well, or you have a poor rating and you do shockingly bad. It has phenomenal sway.”

Arnott said his lodge is currently ranked No. 2 among Hilo hotels on TripAdvisor, just behind No. 1 Dolphin Bay Hotel, and just ahead of No. 3 Hilo Hawaiian Hotel.

Dolphin Bay owner John Alexander agreed that reviews on the website have impacted his small, 24-room hotel for the better. He hasn’t raised his rates since 2011, but he’s currently planning on changing his pricing in July.

“We’re in the process of evaluating,” he said. “We’ll most likely be raising rates between 8 and 9 percent or more.”

Alexander says that his bookings have taken off in the past several months, with February seeing a 99 percent occupancy rate, and March seeing a 96 percent occupancy.

“I’m always scared I’m going to alienate my regulars (by raising rates),” Alexander said. “But things have absolutely been going well. … We had a wonderful Merrie Monarch. It’s my favorite time of the year. We had a couple who stayed here their 26th year in a row.”

Guests generally leaving very favorable reviews about the hotel’s friendliness, cleanliness and service on TripAdvisor, he said.

“It may not be a modern building, but we keep it maintained, and we keep it spotless,” he said.

The Big Island’s recent strong showing, along with Kauai, was cause to celebrate, said Hospitality Advisors CEO Toy, because hotels on both islands struggled for much of last year.

While Waikiki held the highest occupancy rate in the state in February, with 91 percent, other islands showed big gains.

On Kauai, occupancy climbed more than 7 percentage points to 82.4 percent as airlines added more direct flight seats to Lihue from Oakland, San Jose and Seattle.

As for the Big Island, occupancy gained 6.4 percentage points to 78 percent.

Smith Travel and Hospitality Advisors surveys hotels across the state each month to compile data for its monthly report. For February, the study included 159 properties, accounting for 48,201 rooms. That’s about 85 percent of all Hawaii lodging properties with 20 or more rooms.

The study excludes bed and breakfasts, youth hostels, single-family vacation rentals and other lodgings that have fewer than 20 rooms.

The Associated Press contributed to this article.

Email Colin M. Stewart at cstewart@hawaiitribune-herald.com.