Honolulu hotels are promoting an eye-popping $12B in 2025 annual revenue, and behind that headline sits another number arguably far more relevant to Hawaii visitors: roughly $760 is tied to every room night. That figure isn’t a room rate. It represents the dollar value to each visitor night based on total spending. For the industry, it signals strength and leverage. For many Hawaii visitors, though, it feels uncomfortably close to a price tag they just paid for their vacation stay.
What the $760 actually represents.
The $760 figure is not the average base room rate, and it is not what someone sees before taxes and fees. It is an economic impact estimate built from a multiplier model used by the American Hotel & Lodging Association and its research partner. The calculation begins with direct hotel revenue and then adds visitor spending on restaurants, retail, transportation, tours, and activities. After that, it layers in supplier purchases and employee wages circulating through the local economy. When that total is spread across Oahu’s hotel rooms and occupancy, it reaches $12 billion.
Industry leadership frames those figures as proof that hotels are a major economic engine and job generator. That is the purpose of an economic impact report. It measures ripple effects. What it does not measure is what a traveler thinks they paid for a room.
Nationally, industry data shows lodging accounts for roughly 30% of total guest spending, while the majority flows into other categories. When you aggregate that broader spending and attribute it to each occupied room night, the number grows quickly. The math is straightforward, but it measures ripple effects rather than the sticker price of a room.
Visitors are spending more even without more arrivals.
State data shows total visitor spending reached about $21.75 billion in 2025, while total arrivals remained essentially flat at around 9.6 million. Hawaii did not see a surge in visitor volume. It saw higher spending per visitor. Daily spending climbed to approximately $273 per person, the highest level recorded.
That increase shows up across the visitor experience. Base rates are higher than they were pre-pandemic. Resort fees are routine. Parking in Waikiki regularly costs more than $50 per night. Once the transient accommodations tax and general excise tax are combined, the effective rate approaches 19%. When meals, activities, and transportation are added, the totals accumulate quickly.
The president of the Hawaii Hotel Alliance described 2025 as “a little flat,” citing rising operating costs and an uneven recovery in some markets. Several long-standing visitor-facing businesses have closed or downsized over the past year. The $12 billion headline suggests growth, but for many travelers, the experience feels more expensive rather than easier.
Where the $12 billion flows.
The $12 billion figure reflects economic activity, not net hotel profit. Hotels pay significant taxes and support large payrolls. On some islands, resort properties account for a substantial share of transient accommodations tax collections compared with short-term vacation rentals. Those contributions are measurable.
At the same time, many large Hawaii hotels are owned by mainland-based investment groups. Rising room revenue does not necessarily stay in Hawaii. Operators also face higher labor, insurance, utility, and financing costs than they did before 2019, and industry data shows profitability has not fully returned to pre-pandemic levels.
The connection is structural.
The economic impact model expands as visitor spending expands. Higher nightly totals increase the calculated ripple effect across restaurants, retailers, suppliers, and payroll. The larger the visitor bill becomes, the larger the modeled impact grows. From the industry’s perspective, $12 billion demonstrates scale. From the visitor’s perspective, $760 per night reflects the cost of entry. Both statements can be true at the same time.
How much did you pay per night on your last trip, and would you book again at that price?
Photo © Beat of Hawaii.
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Fewer visitors spending more (?) Not as great as some would believe. Everywhere costs are up. It would be great to see where the more spending is going. Most likely this model means more going to airlines, hotels, and car rentals just to get here. Less visitor spending to local shops, mom & pop restaurants, local fishing/snorkel/tour providers. Big companies will benefit; smaller businesses will not. That is also more tax revenue going off island and not staying local.
So again I hear the refrain that fewer visitors are spending more like it’s a good thing. It’s merely the result of skyrocketing prices in Hawaii.
Don’t get used to this. The model is unsustainable.