Grand Wailea Resort Review

Hawaii Hotels Hit the Skids; Can They Bounce Back?

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.

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78 thoughts on “Hawaii Hotels Hit the Skids; Can They Bounce Back?”

  1. Dear Peter, it seems like it is time you got off the “hotel” train. Farmstays and transient vacation accommodations are far less pricey and often offer cooking facilities so you can limit the amount spent on meals. Search on Airbnb, VRBO. Careful searching can result in memorable stays. Mahalo nui loa, e komo mai, Bruce

  2. lived in Hawaii for 3 years Loved it went back for 20th wedding anniversary great time but your hotel room prices are too high.

    1
  3. You don’t deserve any visitors. You wanted to restrict them and lecture on culture. Limits on who and what you can do. Restore the old tourist relations office and skip the stuff.

    5
  4. We have always loved visiting Hawaii. However, over the years we have felt less and less welcome. As a result, we now are seeking new vacation spots. Instead of Hawaii, this year we are headed to Tahiti. Without tourism, Hawaii will struggle…the consequences of reality.

    3
  5. Stayed at Luxury Collection propert in July. The only thing luxurious about the hotel was the rate. No Bonvoy Lounge, no breakfast buffet, no room service, no beverage service on the “private beach”, no Front Desk at the second tower (you could still see where the computers used to be). The excuse for the cutbacks was and still is Covid. It is 2024 and that reason is no longer valid.
    Hotel was full at very high rates (Maldives level high), but understaffed, rooms run down and also dirty and old furniture.
    Hard to even make it to the beach in Waikiki as 3 hotels more or less block access by setting up umbrellas and chairs along the entire waterfront (at $100) on that part (apparently, the City or State are taking steps to improve the situation).

    Waimanalo Beach still as beautiful and uncrowned as before
    Rates will come down when tourists stay away. But the industry needs to take many other steps to make visitors feel welcomed and show them the value of returning.

    3
  6. To all those who are complaining about the lack of aloha and of hawaiian music, please come experience on Thursdays and Saturdays at Anaina Hou in Kilauea and Princeville, both on Kauai.

    0
  7. I used to live and work on Oahu. Compared to a decade ago, Japanese tourism has sharply declined due to the yen being weaker. Barely any Japanese tourists now. I am positive this is a huge factor as at its peak Oahu would get 10000 visitors a day from Japan alone. Many of my friends who used to drive tour busses and work at tour companies have had to.find new jobs because those companies shut down.

    1
  8. We traveled to Hawaii for many years, sometimes we go several times per year and will stay for up to one month. We visited after the fire and everyone thanked us for coming to support the businesses. The people were very welcoming and the service was great…..but it was not the same. The “go home tourist crowd” and “get rid of STRs crew” are louder and much more vocal when I am back on the mainland. Maui is my wife’s favorite place but the service and aloha are not what it used to be. Big Island is more authenic to me and will be my favorite island. Kauai is very relaxing and Oahu has been growing on me. Hawaii needs to make up it’s mind. Are we welcome? Then price it accordingly and roll out the red carpet. If you only see us as a source of revenue repeat visitors will see it and we have a planet full of options.

    8
  9. My family and I used to spend a good portion of February in Maui but as the rent for the condo doubled after the pandemic, it is cheaper to go elsewhere. It is a shame as Maui holds a special place in our hearts. Here’s hoping some sanity returns to the lodging industry!!!

    5
  10. While I love Hawaii and have visited more than 40 times, I increasingly question the value proposition. There are closer places that have lower hotel rates and airfares. Far too many Hawaiian hotels charge a resort fee without providing anything worth while. As well, too many hotels fail to commit to basic property maintenance and upkeep.

    A visit to Hawaii comes at a premium that far too many hospitality ventures do not deserve.

    4
  11. Currently, there seems to be a real fascination with Japan… whether it be with a tour group or venturing out on your own, Japan offers flexibility and value for the dollar. It has become an international shopping and entertainment mecca for all ages. The high level of customer service is even more attractive because it is a cultural norm and not fueled by need… we need to wake up, get a grip and make adjustments before these current declines become the norm. If we can’t adopt a more flexible attitude as a culture here in Hawaii, we may get the higher pay + benefits but be “on call” because people who once embraced the Aloha spirit are going else to receive more value for their time and money.

    2
  12. Well, after being told stay away, oh no, please come. No, stay away, tourist are taking natural resources and accommodation’s from the locals. Maui needs to heal, get lost, you are not welcome. Is it any wonder why people are staying away? Our timeshare is based in Ka’anapali, we went last December, but it was the worst trip we’ve ever had to Maui. We were not welcomed despite all the hoopla of the much needed visitor dollars. Maui just is not ready for anything, in my opinion. It needs to decide on its priorities, and it should be, for the folks that have lost so much. As much as we love Maui, it’s our second home, we will not be returning until Maui decides what it really wants and needs. With pending tax this, tax that, green fees… Maui, you are screwed. We will visit our much loved Big Island and spend our unwelcomed Maui $$$ there. Sorry Maui, we love you, but you don’t return the love.

    15
  13. I would love to visit Hawaii again. Air fares haven’t changed much compared to pre COVID, but room rates seemed to have doubled over that time frame. It’s not a good value for me and I won’t be back anytime soon.

    8
  14. I usually visit Maui twice a year with my grandson and his girlfriend but not this year because I don’t feel I would be that welcome there. I honestly feel the people off Maui don’t want us to visit.

    9
  15. Everyone is suffering a bit of a decline in bookings, even AirBnB and VRBO properties. The advantage STR’s have is that owners of these properties can more nimbly lower rates and take less money for this particular stretch, something big budget hotels cannot do without impacting profit – they have union mouths to feed. I love staying at Maui hotels, but haven’t in the last decade because they became too expensive for what we needed. A well-selected STR saves enough money to cover a lot of other ancillary costs in a Maui visit. Add to that, you can build relationships with “mom and pop” STR’s – they will often reward you with discount rates for coming back again and again. Mahalo.

    4
  16. Maui timeshare properties from Interval International have dwindled and not much to offer. Airfare too high as well. Better to go to a Caribbean island or Mexico for a vacation now.

    2
  17. So this is good news, right?? Hawaii has been sending the message for years now that visitors are not appreciated or particularly welcome. We are taxed at every turn, and told we are not respecting the islands.
    Fair enough. I like Hawaii, and Hawaiians. The Islands and people there are lovely. I hope the locals are thrilled. Isn’t this what they have been asking for?
    We have been traveling every year to Hawaii, and 2024 will be our last visit.

    17
  18. While we are aware of the challenges Hawaii faces due to the lack of housing which may or may not be the result of vacationers and short term rentals. The truth is that tourism is jobs and dollars from tourism is the mainstay of Hawaii economy. Tourists have also been warned away, particularly by Maui. Higher prices for less service. There are many many other warm places to vacation where tourists are more warmly welcomed. It’s no wonder vacancy rates have risen.

    17
  19. A trip to an expensive place like Hawaii is not on their to do list. We are a retired airline family who could fly for free but Hawaii has become too expensive for us.

    12
  20. Been going to Hawaii for ten years. Price of hotel rooms, sense of not really feeling welcomed dampened desire to visit again.

    12

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