Hawaii’s hotel industry is experiencing one of its roughest patches in recent years. In September, statewide hotel occupancy sank below 70%—a level not seen since early 2022, when Hawaii was emerging from the strictest phases of the pandemic.
The Department of Business, Economic Development & Tourism (DBEDT) provided the latest updates that show a significant drop across all essential metrics. In addition to the drop in occupancy, the average daily rate (ADR) declined by 8.2% to $315.76. In comparison, revenue per available room saw the sharpest drop of 15.9%, underscoring the severe headwinds facing Hawaii tourism.
Ongoing challenges by island.
Hawaii’s major islands face unique challenges, with declines varying by location. While maintaining the highest occupancy in the state at 76.9%, O’ahu still experienced a 5.4-point drop. Maui remains significantly impacted, with occupancy falling by 9.2 points to a troubling 52.6%, as the recent wildfires continue to disrupt tourism. On Hawaii Island, occupancy declined to 62.0%, a drop of 4.2 points, while Kaua‘i saw occupancy fall by 7.3 points to 72.6% compared to last year.
Regular visitor Tony shared, “I visit Maui almost every year, but this time, I noticed far fewer people and fewer amenities at hotels despite room rates staying high.”
His comment reflects a broader concern: some travelers feel service standards are slipping, even as prices remain high compared to other destinations.
Is price sensitivity Hawaii’s main problem?
The fall in occupancy and other performance indicators across Hawaii’s hotels suggests that price sensitivity is a key factor. With hotel metrics in decline across nearly every class and location, travelers are increasingly selective. After the surge of pent-up demand following Covid, visitors have turned cautious.
Does this data speak to Hawaii hotels being too high-priced while offering too little value? Please let us know your thoughts.
Add to costs Hawaii’s tragic lack of tourism infrastructure, plus visitors concerned about being told how to behave. Is the comparison with other idyllic destinations shifting away from Hawaii’s favor?
Although prices no longer rise as they did two years ago, they haven’t dropped significantly either, deterring travelers from prioritizing value and alternative destinations. Visitors are speaking with their wallets, signaling that while Hawaii still holds a place in their hearts, it’s hard to justify the current value proposition.
Maui’s struggles are unending.
For Maui, September’s hotel occupancy of 52.6% marks a steep decline compared with the other islands. The average daily rate subsided slightly to $453.42, reflecting a 15.6% decrease.
The path forward remains stuck on high-value travelers.
Amid these challenges, Hawaii’s hotels are charting a path to stability by focusing on high-value, economically resilient travelers who prioritize unique, premium experiences. The question remains: will these less price-sensitive visitors come despite concerns over perceived value? Hawaii is hopeful that travelers seeking cultural experiences and sustainable tourism will continue to find the islands compelling.
Looking ahead at Hawaii hotels’ problems.
Hawaii’s hotel industry is navigating a challenging landscape, relying on its decades-long love affair with a global audience as a powerful asset. However, as hotels adjust to increased cost sensitivity, lower occupancy, and shifting visitor demographics, renewed success may remain elusive—even as they lean into Hawaii’s unique strengths.
The question remains whether Hawaii’s hospitality sector can continue to extend its reach and the Aloha spirit to travelers seeking a deeper connection with the islands above all else.
Beat of Hawaii photo from our recent review of Grand Wailea Maui.
We love Hawaii, have enjoyed all the islands. Hawaii needs to express its concern for those of us from the mainland who are on a fixed income.
Does it value us tourists or not?
If yes, then promote tourism whole heartedly and offer us some incentives.
If not, we can learn to love other locations for clear skies that will actually reduce our stress, not add to it.
At the moment, we don’t feel welcome or valued by dear Hawaii.
Hawaiian vacations pricing themselves out of the market. High cost with little or no housekeeping. Even my dentist and family who were going twice a year can no longer afford it with the cost of high airfare, hotel, food for a family of four. As a retired senior couple we haven’t been back in two years and have no clue when we can afford it. I love Hawaii and had spent 12+ years living there. We wish we could afford it.
Start with not charging $1200/nt for hotel rooms!
You know they are in the dumps when you see more Kama’aina promotions. Of course they juiced the rates so much that Kama’aina still don’t want to pay the rates. You start working the numbers and for only a little bit more you can travel out of state. Speaking of the state, they don’t help anything by taxing the heck out of everything.
For those that have been around long enough the occupancy tax was to pay for the convention center. 25 years later it is still around and periodically increased while always using the same logic. It only impact the tourist.
It has been over a year since 100+ Maui Lahaina fire deaths.
Gov Green, Mayor Bissen, and Chief Pelletier are still in charge and collecting paychecks. No answers, explainations or consequences.
Why would anyone risk traveling to Maui where there is no accountability and no protection for citizens and tourists?
I’m delighted to hear the hotels are ‘hurting a bit’, particularly in Maui! This price gouging is finally coming to nest. The unfortunate factor is, all those Westins, etc., will not be knocked down so locals could have construction of new residences. I’m afraid that, in reality, locals, due to cost, will not be able to have those ‘quaint’ single family homes they had in Lahaina anymore. Land is too expensive, and construction materials too costly, so multi-family housing is probably what they are going to have to get used to. Very sad, but that will probably be the reality.
We enjoy Hawaii and usually spend about 4-5 months there (we’re retired). With the ban on short-term rentals in many areas, the ridiculous additional fees, and sky-high hotel rates, it is cheaper for us to go to Europe for several months where we are welcome. We have always rented a condo for 4-5 months but owners are telling us horror stories of added fees and taxes which get passed on to consumers. Hawaii can’t have it both ways: great incomes for locals and less tourists, the math just doesn’t work. Many of us don’t want to stay in hotels and prefer a condo where we can shop and cook some of our own meals. Hawaii needs more workforce housing but blaming condo owners is shooting themselves in the foot. Thanks.
What does it take for hotels to get the message? Tourists have had enough of the obscenely high prices and are going elsewhere. Be careful what you wish for; your messages of “too many tourists “ has been heard clearly. Why go where we’re not welcome and are blamed as the source of Hawaii’s problems?
When a $500 room goes for $1,000 now, a 5% decrease in occupancy is an acceptable tradeoff for a hotel. This price increase isn’t just Hawaii, it’s across the board on the mainland and in other desirable locations around the world.
My wife and I were married in Hawaii and have made 15 trips back since then. Three of our trips included taking our kids and grandkids back with us. We normally stay a month and the rest of the family stays for 2 weeks. But I think last year was the last time we will ever return. The prices have continued to sky rocket and the friendliness is slowly slipping away. It has always been our favorite place to vacation but next year we are looking at the Caribbean or maybe Mexico where our money will be appreciated. Hawaii had better wake up and get back to the paradise it used to be.
While we’ve cherished travel to Hawaii over the last 30 years, we now feel gauged by the hotels and unwelcome by the residents, who we loved interacting with as much as the location. We have no plans to spend our travel dollars there in the foreseeable future.
Hawaii’s hotels and condo owners, as well as the governor, mayors and head of tourism are completely out of touch with reality. All they want to do is raise rates and impose more taxes and fees, and they are not taking in to account that the economy of not only this country but other as well is in horrible shape right now. People cannot afford basic necessities, and those who are a bit more financially stable know better than to be taken to the cleaners by the afore mentioned businesses and government agencies. Those who can still afford a getaway will go someplace else where the quality of services is better and the cost is much less. I am beginning to think the state of Hawaii has just about reached the point of no return. Such a shame, and all for greed. It’s a very tough lesson to learn, and unfortunately it looks like they still have not learned anything from their mistakes.
We used to travel to the Hawaiian Islands two or three times a year for the last 25 years. Now, we don’t even consider it. Too expensive and we feel unwelcome to name a couple of reasons. We went to French Polynesia and the Mediterranean this year.
My family has been coming to Hawaii for close to 40 years however, during the last couple of years, we have experienced a lack of welcome. Tourists have been blamed for high rent, environmental damage, and more…I sure wish the tourists would stop dumping their abandoned cars and washing machines, couches, etc in the bush. More and more is being closed off to us. Costa Rica and the Caribbean are much more welcoming and affordable. Good bye Hawaii!
Costa Rica, (Mexico) and the Caribbean are not the US. Costs are of course lower in these other countries.
We have been coming to Maui almost every year for 38 years. We are not planning to come next year due to hotel prices. We paid over $500 a night fpr a ocean view room. Amenities were few and since we live in Pennsylvania we will go to the Carribean instead.
This isnt something that suddenly occurred overnight. This has been building for some time based on what I see with the governor, mayors and some of the local folks. Is it now.. too little… too late? Or can Hawaii get the Aloha spirit back? And appreciate what they had?
People will gravitate to where they are valued and appreciated. I think Hawaii has lost some of that in the past while.
Maybe it’s time the parties rethink what they really want from tourism.. clearly the current actions arent working the best way from an economic standpoint..
Would you go where you feel you aren’t appreciated?
If everyone stops coming, then yes, people will change. It’s survival.
Once the Golden Goose is dead and cooked it will take along time to bring it back from extinction. Sorry time for the Governor , Island Mayors, and Locals to understand that the tourism that Hawaiis economy was built on has been driven off and it will be hard to get low and high valve tourists to come back. Wake Up Hawaii before it’s too late.