Soaring Hotel Rates in Hawaii Have No Place To Land Because of This

Soaring Hotel Rates in Hawaii Have No Place To Land Because of This

The latest report just in from the state reflects an incredible stubbornness of Hawaii hoteliers to moderate rates in spite of significantly sub-par occupancy performance. And here’s why we think that’s the case.

For now, anyway, we are willing to pay the price because of the demand. And hotels like that we do so they can stay at less occupancy, with less staff, and still come out ahead. The days of seeking full occupancy could be behind us.

The Hawaii Tourism Authority (HTA) said that statewide occupancy in September sat at 75.5%, with an average daily rate up 40.5% on 3.5% less occupancy compared with pre-Covid. We continue to use 2019 as the reference point for price comparison. The reason being that 2022 was an anomaly with tremendous growth in travel following the multi-year Covid shutdown and the ensuing Hawaii travel bonanza.

Last month’s survey included nearly 46K hotel rooms, representing 83% of the state’s hotels in properties with 20+ rooms. Vacation rentals aren’t included and are reported separately.

Experts Chime In Where You Must Go In Hawaii
Lanai

Hawaii hotel findings for September 2023 include:

  • Statewide, “luxury” hotels had an average daily rate of $677, up 48% compared with 2019.
  • Those in the mid-range had an average daily rate of $235, also up 48% compared with 2019.
  • The report compared Hawaii with other top-performing US markets over the first nine months of the year. Not surprisingly, Hawaii hotels led the entire country with its average daily room rates of $379, higher even than New York, which was just $279, and San Francisco, which was $226. Yet Hawaii ranked behind New York, Las Vegas, and San Diego in occupancy.
  • Compared to similar international destinations, Hawaii’s well-loved neighbor, French Polynesia, had the highest year-to-date average room rate at $840, followed, not surprisingly, by Maui’s $609. With taxes included (no fees), that brought Tahiti to $924, while Maui’s much higher occupancy tax brought the total to approx. $719.

Maui hotel rates last month jumped 69% compared with 2019.

Maui hotels, severely impacted by the August fires still retained the highest average daily rate of $534, up 69%
compared with 2019. In spite of a spate of declining visitor counts on Maui, we are still hoping and waiting for some significant reduction in hotel room costs.

Hawaii Resort Bubble Boondoggle + Other Covid Oddities

Kauai hotel rates in September up 67% vs. 2019.

Kauai hotels came in with an average daily rate of $398. Many visitors flocked to Kauai following the Lahaina fire.

September Big Island hotel prices climbed 69% compared with 2019.

Big Island hotels had an average daily rate of $373 last month.

Hawaii Airline Competition

Honolulu hotel prices remain the relative sweet spot in Hawaii hotel prices.

Honolulu hotels had an average daily rate of $270, up a more moderate 19% compared with 2019. Honolulu hotels are going up less than the other islands. As we said after last month’s report, “We wish we could say that this means excellent value can be found in Honolulu hotels. Unfortunately, even with these more modest increases, we still find Honolulu hotels overpriced and generally lacking in value.”

What’s your take on evolving Hawaii hotel costs?

Honestly, to us, Hawaii hotel costs are simply exorbitant and the value proposition is too weak. It is frustrating to travel in Hawaii, even for Hawaii residents who often get a small additional Kamaaina (local) discount. Look for some upcoming Hawaii hotel reviews we are planning in the months ahead. We invite you to share what is and isn’t working for you at Hawaii hotels by leaving a comment.

Ways to reduce Hawaii hotel costs.

We suggest that if you are trying to reduce hotel costs and are traveling in the off-peak season (August 10 to December 15, January, February, and April to June 10), wait for better prices. Since occupancy is not 100%, you may find a better rate within 90 days of your stay.

Avoid non-refundable rates to give you flexibility for last-minute changes. Are you willing to consider hotel properties a block or more from the beach, in Honolulu, for example, as rates tend to be lower at these properties.

Also check every possible source, and try bundling things and not, to see what works best. We just got a hotel and car together on Costco Travel that was cheaper than what we could get when booked separately.

hta-september-2023-hawaii-hotels-performance-final

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47 thoughts on “Soaring Hotel Rates in Hawaii Have No Place To Land Because of This”

  1. Hawaii mayor needs to reconsider the one month rental for BnBs . That is the answer to more tourists like we had before. Instead, they keep building more hotels .

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  2. Hi BOH,

    I know it’s a tropical place, but caught six cockroaches in my room at the Sheraton Kauai over five days in September, couldn’t get out of there fast enough. Tough to sleep when you wake up to new cockroaches every morning. Saw fewer bugs in Kalalau when I camped there five nights after my hotel stay. Put towels under the doors each night, but that didn’t help.

  3. For this reason amongst many others, short term vacation rentals are your best bet! Put some money back into the local economy instead of the pockets of these hoteliers who obviously do not care about a more affordable visit to our islands. Many stvr’s are owned and operated by the people of their respective community.

    We look forward to welcoming conscious, respectful visitors to our homes. E Komo mai!

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    1. Short term vacation rentals are a double-edged sword. Some might contribute to the local economy, but far too many are owned by mainlanders as a second/vacation home, which actually harms the local economy because they remove available inventory from locals who need long-term housing.

      6
      1. Actually Drew, you are not really accurate. I am kanaka o’iwi (native Hawaiian) and I do own the home that I currently rent out as an stvr. There’s no way I could afford to still live here, In Hawai’i, my home and ancestral origin, if I didn’t share my home with visitors. I can schedule when I want to accept visitors as well as scheduling private time for family to come visit it’s a great way to bring in the much needed revenue to maintain my home and I am able to share our culture with my guests in an authentic and genuine way. Aloha at its best! It is a mystery to me why anyone would still want to stay in generic, overpriced, corporate hotels that exploit Hawaii and Hawaiians! What a rip off!

        1
      2. Also, long term housing for my situation, was never an option. There’s more than enough housing here! There’s a lack in affordable housing! Very little to do with those of us who share our homes with visitors, just sayin…

      3. That’s really not true Drew although it’s a popular myth. I own two vacation rentals in west Maui in resort zones. One is in a 5 star resort where the units start at about $2 M. The HOA dues and fees are over $3,000 for my unit every month. The property taxes are $22,600 a year. The electricity is the most expensive in the world and the mortgage is huge. That’s probably why there isn’t a single full time resident in about 700 units. It’s certainly not a place a first time buyer would look. They could buy 3 homes for what one would cost them here.

    2. I hope they would be conscious. It would be kind of a bummer if you were in such a beautiful place and the whole time you were unconscious. Jus’ sayin’ :0/

      Sorry, I couldn’t resist! Just giving you a hard time, Wicked W.

      LOL X0D

      1. Are you from here RP? Have you ever tried to apply for a legal stvr in Hawai’i? If you are not a resident, it’s close to impossible to have one and make any kind of profit! The land tax alone would cripple you! Come on guys! Get your facts straight before you comment! That may have been the case at one time, but times are a changing! Big hotels have been ripping people off for long enough! Let’s support the local economy instead! And have an authentic Hawaiian experience while you’re at it! Bonus!!

  4. Dear BOH. An analysis of hotel rates cannot be complete without a review of underlying expenses. Property taxes are based on assessed values. In addition, costs have gone up in all other categories: housekeeping, landscape maintenance, electrical and gas, maintenance and repair, entertainment, linens, admin staff.

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