The state released its Hawaii Vacation Rental Performance Report for September, and the results were varied and somewhat lackluster. For example, there was more inventory, up 7% compared with last year, but that’s down 23% compared with pre-Covid. The prices were fascinating, too.
Demand for Hawaii vacation rentals sank 40%.
Since 2019, which is the last comparable year, demand has been down 40%, also down 5% compared with the atypical 2022 when demand soared after Covid.
What happened to Hawaii vacation rental nightly rates?
The average daily rate of vacation rentals is quite varied by location, while statewide, the average nightly rate in September was $260, down 8% compared with 2022 but up 34% compared with 2019.
Maui vacation rentals were largely offline in September 2023 due to the fire. The state confirmed that many West Maui vacation rentals were unavailable due to the wildfires. For the entire island, Maui vacation rental inventory was down 53% compared with 2019 and down 34% compared with last year. Demand sank 68% compared with 2019.
Rates on Maui were modest at $266 on average, which was down 20% compared with 2022 and 17% compared with 2019. Remember that, as with Hawaii hotels, you’ll add approx. 18% in taxes, plus any additional fees (which are highly variable). So that $266 becomes $315, plus fees.
Hawaii vacation rentals still represent a significantly better value proposition compared with Hawaii hotels, especially for longer stays. There are caveats to take into consideration, however.
Beat of Hawaii
Honolulu vacation rental prices are up compared with other islands. In spite of new regulations and the proposal for even more strict minimum stay rules, Honolulu still had the most vacation rental units available, +23% compared with last year and -8% compared with 2019.
Average daily Honolulu vacation rental rates were at $226, up 5% compared with last year and up 41% compared with 2019.
Big island vacation rentals had greater available units +26% vs. 2022 and -5% vs. 2019). Occupancy was just 45%, down 6% compared with last year and 14% compared with 2019.
Kauai vacation rental availability was +34% compared with 2022 and -9% compared with 2019. Kauai’s average daily rate was the highest by far of any island, $358. That was down 5% compared with last year but up 49% compared with 2019.
So, are Hawaii vacation rentals still a great deal or not?
In summary, Hawaii vacation rentals can still offer cost-sharing benefits, a more local experience, and advanced booking options, but they can come with hidden costs and potential issues that should be carefully vetted in advance, which may impact affordability and value for travelers. Some issues are the amenities not covered and quality control.
Hawaii vacation rentals – the good:
- Cost-sharing savings: Vacation rentals offer multiple bedrooms, a kitchen, and extra space compared to hotel rooms, making them cost-effective when sharing with family and friends.
- More local experience: Staying in a vacation rental allows visitors to experience Hawaii more like a local, providing a more authentic and immersive experience compared with hotels.
- Advance booking: Some vacation rentals can be booked up to 18 months in advance, which is especially helpful for planning trips during peak seasons and holidays.
Hawaii vacation rentals – the not-so-good:
- Hidden costs: Vacation rentals often come with significant extra fees, including highly variable cleaning and service charges, which can add up to the overall cost and make them less budget-friendly. Fees can make vacation rentals more expensive for shorter stays.
- Location, quality, and amenities: Cheaper Hawaii vacation rentals may compromise on location, amenities, and overall quality, leading to less desirable accommodations. Things you may take for granted in a Hawaii hotel, like air conditioning, may not be present at all in a vacation rental.
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Researching the extra fees on AirBnB is critical. Looking for just 2 nights on Kauai recently, I found “no additional fees” to hundreds of dollars for cleaning, security, parking, amenities and other “booking” fees. I had to message all the owners for clarification. Just be upfront about it.
Hi Sherri.
Great suggestion. Thanks.
Aloha.
It certainly seems overall travel numbers are down across Maui. We have a (fully permitted and legal) oceanfront 7th floor condo in North Kaanapali, with AC, no hidden fees, 5 star across the board reviews, and still trying to fill empty weeks in December. In 10 years of owning an STR, this has not happened before. Maui needs visitors!!
Second what Chris has posted here. We have a condo in Kihei that has days available in December. Plus, we would often have much of Jan and Feb booked by now. We have hardly any bookings for those months.
I realize my financial interests are secondary to those of the thousands of locals who were impacted by the fires. But I was ready to scream when the Lt. Gov. wanted all the tourists out. I knew that would only compound the harm to the locals who were already suffering.
Maui needs visitors, but it also needs accommodation that isn’t absurdly priced. I don’t know the circumstances or pricing of your unit, but as a visitor I spent months watching units I liked the look of, waiting to see if prices came down. I have 17 days booked across three islands over Christmas and New Years. Due to pricing, none of those days is on Maui.
Randy, we’re currently offering our unit for $295/night. Prior to the fires, we were getting $395. I usually adjust the pricing based on rates of similar units at our complex, supply and demand, and the timing. If it’s not booked yet a few months out, I usually drop the price.
Good on you, Chris, for adjusting your pricing to drive interest. I wish you luck, and that sounds reasonable for what it sounds is offered. I was absolutely astounded by how pricing seemed to levitate despite so much talk of absence of visitors, some of which showed (very minimal) occupancy along with pricing. Hotels were just nuts, and I recall a Maui resident here recently posting he had no idea how high the hotels were, and could hardly believe he couldn’t afford a hotel room in his own town.
Beat of Hawaii continues to support outrageously priced hotels. Short term vacation rentals can be an attractive alternative. Buyer beware applies no more to these rentals than it does to hotels. For example: resort fees, parking.
Aloha BOH,
I currently own a condo on Kauai that is managed by Marriott. I was just told that my annual maintenance fees were going up by 17.1% to a total of over $53,000 per year. This is for a 2 bedroom unit. I was told the cost of insurance went up $270,000 for just 3 buildings and 78 units which is almost $3,500 per unit. After adding the real estate taxes, utilities, and repairs the total is over $85,000 per year.
This is why vacation rental costs is so high and not coming down.
When we stayed in Kauai for two weeks in October 2019 in a Condo
was the last time what we paid for lodging was reasonable.
What we have paid the last 3 times was excessive.
FYI for everyone Airbnb is illegal here in Hawaii across all islands anywhere outside resort areas specifically. Many are still doing it trying to avoid getting caught but they’re cracking down on that now. So consider alternative options!
This is not even close to being correct. There are thousands of Legal short-term rentals across all 4 islands, and they are NOT all in resort areas. Do you work for a hotel?
Still, the visitor should do due diligence. For instance, on Maui, look for a TKS number in the listing. All short-term rentals have to have one, and all listings that don’t have one have been removed from the online booking platforms. Thousands of illegal short-term rentals were removed a couple of years ago.
Our house on Kauai is a legal-licensed vacation rental non in a visitor designated area. This is because we were grandfathered back when the new laws restricting them took effect, and this was not without some effort and attorney fees, but that’s been a dozen years ago. Last I checked, there were north of 450 permitted vacation rentals outside of designated visitor zones on Kauai, referred to “Non-Conforming”. They will slowly go way over the decades to come under the current system
Same on Maui, except there are literally thousands of legal, non-conforming short term rentals here, many of which are zoned Apartment and not Hotel/Resort.. These units were codified in 2014 to be and remain short-term rentals permanently, if desired.
I’m curious about what you said about Kauai rentals “going away” to “Come under the current system”. In Maui, the non-conforming rentals on the codified list are allowed permanent short-term rental use. Is it different on Kauai? For instance, if a non-conforming rental is sold, is the new owner allowed to rent it out short term? Just curious – there are some differences between islands.
Kauai County Planning Department is overtly hostile to non-confirming vacation rentals. If you are late to renew, you lose your license (neighbor of mine was one day late). no forgiveness or late fee. They are under pressure from some of county council members who themselves are under pressure from a handful of overly loud activists that (some years ago) would attend and disrupt the county council meetings. So, each year a few of the owners fail to renew on time, and a few others don’t renew for some other reason, and slowly the number will decrease since no new ones can be added
And by “current rules” I mean there are occasional noises to outright ban them even if the owners have followed all the rules. Kauai Co. has been leery to do this because people lawyer up (it is an obvious government taking without compensation).
No sure about Maui county, but Kauai co. also increases prop tax of a vacation rental by 50%, plus $750 permit renewal fee. Garbage is $120 a month instead of $12.They make a lot of extra money off them, so you’d think they’d want to keep them in business ….
Not illegal. But most islands require 30 day minimums (even Oahu that’s trying to implement a new 90 day rule is losing in court, so 30 day rentals outside resort areas are the new norm).
Thankfully not (yet) the case on Kauai, but all it takes is a majority of county council members. I think they’ve been advised of the legal fees it will cost them in addition to lost property taxes. Oahu apparently did it anyway. We’ll see after the dust settles.
All that you’ve said is almost exactly the situation on Maui. I think we are getting past the current anti-visitor sentiment here at the moment, as new council members have been voted in that are business-friendly and have tipped the majority. Not to mention they have diverted their attention to the more critical tasks of caring for those displaced and planning the rebuild after the fires.
Not the case on Maui, either. 30-day rent restrictions aren’t even a thing anywhere on Maui. Not the case on the Big Island, either.
Wherever you got your information that “Most islands require 30-day minimums” should be shut down. It dissuades visitors from coming to the islands for their 1 or 2-week vacation, as the hotel rates are astronomical these days, and short-term rentals are an attractive alternative. All of Hawaii, directly or indirectly, is hurt by this spreading of misinformation.