Diamond head view from a Hawaii vacation rental.

Why Hawaii Vacation Rentals Plummeted To 52%

The occupancy gap between Hawaii hotels and Hawaii vacation rentals has never been this wide. Year-end statistics for 2024 show that while hotels soared relatively, at 73%, vacation rentals are stuck at 52%. In 2019, those numbers were so very different, with hotels at 81% and rentals at 75%. So what happened?

Latest update: Vague Laws, Big Consequences: Uncertainty Chokes Maui Vacation Rentals.

Vacation rentals struggle while hotels hold steady.

The latest Hawaii Vacation Rental Performance Report reveals a stark reality.

While visitors aren’t skipping Hawaii altogether, they mainly skip vacation rentals. This marks a dramatic shift from past decades when vacation rentals were ultra-popular as an alternative to high-priced Hawaii resorts. A major correction is underway, with the rental market still in a free-fall.

Maui takes the biggest rental market hit.

While every island has seen a downturn over time, Maui has faced the most severe decline. Compared to 2019, Maui vacation rentals lost 33 percentage points in occupancy—by far the worst drop of any island.

Several factors are at play. In the aftermath of the Lahaina fire, visitor patterns changed, with many travelers shifting their plans to other islands or canceling Hawaii vacations entirely.

At the same time, ongoing and proposed restrictions on vacation rentals have tightened the supply, particularly in West Maui. The combination has left the market in turmoil, including units sitting empty despite better visitor numbers in other parts of the state.

Higher prices, lower demand: Is the model broken?

Despite falling occupancy, the average daily rate for vacation rentals continues climbing. In 2024, the statewide rate reached $323 per night, a 55% increase from 2019. On Maui, it was even higher, reaching $389. That is before taxes and a myriad of potential fees.

This pricing imbalance is pushing vacation rentals into a precipitous spiral. Many owners raised rates to compensate for lower demand, but the strategy doesn’t work. Instead of booking at higher prices, travelers opt for hotels that offer a more consistent service model, often including daily housekeeping and regular amenities.

Hawaii’s hotels also benefit from bundled travel deals, like CostcoTravel for Hawaii, and loyalty programs, which vacation rentals usually cannot match. For travelers, this can mean a lower overall cost for a hotel stay than an expensive rental with added cleaning fees and strict policies.

Regulatory pressure and uncertainty.

Hawaii’s ongoing discouragement and seeming crackdown on vacation rentals, from the governor to the neighbor islands, is another major factor driving the decline. In recent years, counties have passed strict zoning laws, permitting rules, and enforcement measures to reduce the number of short-term rentals.

Maui, in particular, has led the charge by eliminating rentals while placing even more under the scepter of elimination. Oahu has also moved to limit new rentals, while Hawaii Island and Kauai continue to adjust regulations. With such uncertainty, many owners either leave the market or struggle to attract guests.

For visitors, this regulatory uncertainty has been a part of making vacation rentals a less appealing option. Confusion over legal versus illegal rentals, at least the potential for cancellations due to enforcement, and the risk of booking a property that could be shut down have come together to drive potential guests toward Hawaii hotels instead.

Are vacation rentals in Hawaii in permanent decline?

With demand stagnating and regulations concerning, the long-term outlook for Hawaii’s vacation rental market remains unclear. Some owners may be forced to sell, while others may potentially slash rates to compete with hotels.

The bigger question is whether Hawaii’s tourism industry can adapt. The entire market could be reshaped if visitors continue shifting away from vacation rentals. At the same time, if hotels continue to raise rates due to growing demand, travelers may eventually return once again to rentals as a lower-cost alternative.

Hawaii’s vacation rental market is flat now, and the numbers don’t lie. With occupancy not growing over 2023 and prices at all-time highs, the industry is at a crossroads. Whether this is a temporary correction or the beginning of a long-term shift remains to be seen.

What type of accommodation are you booking? Have your feelings changed about vacation rentals?

Photo Credit: © Beat of Hawaii, taken from a vacation rental.

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124 thoughts on “Why Hawaii Vacation Rentals Plummeted To 52%”

  1. I’m sorry that the Canadians do not understand the need to protect our borders, that is the issue. The tariffs will not be implemented if Canada and Mexico assist in preventing the excess of drugs trafficked into the US and criminals arriving through our borders. This is not a problem just in Hawaii, but throughout our country. So if your vacation is more important than safety and security, then fine, go to Mexico.

    2
  2. To Mike, Glad you are going elsewhere for vacation. You jumped the gun with your comments regarding our great President. That is something you can’t say about yours , isn’t he resigning.

    3
  3. We are Canadians who have been visiting Kauai and the rest of the Islands for over 50 years. Yes it has been very expensive to stay and eat but the Aloha we received was well worth the expense.
    But now your president has made us enemies with threats of huge tariffs as well as threats of taking over our country to become the 51st state.
    We in addition to millions of other Canadians we are boycotting the USA from travel plans to what goods we shop for in the grocery store.
    It is sad to say Aloha but your president whom was elected by the majority of Americans has caused this.
    Now we plan to vacation in Mexico.

    2
    1. We want our borders including Hawaii to stop the infiltration of fentynal and other drugs…. Mexico included. That is the issue. Tariffs are the negotiating tool. It will affect Americans as well, but a price in willing to pay if it helps even a little. I’ve 2 friend la whose children died from fentynal.

    2. Mike, I know this is a Hawaii site, but I’d respectfully suggest you’re blaming the wrong guy. Trump has tried everything he can, short of tariffs, to get the Canadian government to stop the cartels along the US northern border. They ignored him. Read what’s happening along the Mexican border. Mexico has turned this problem into an opportunity. Their’ assistance will result in new and beneficial joint projects with the US. Vote wisely. Elect a government that will work with Trump, even if they have to hold their noses.

      2
      1. I would respectfully interject as regards Hawaii that Canada is not part of the fentanyl issue in the US. Over 99% comes from Mexico. Canada is a great neighbor and does not deserve to be treated as a door mat. The root cause is addiction (supply & demand) along with illegal trade networks.

  4. I think the answer is in your article. 55 pct increase in vacation rentals from 2019. I remember not that long ago you could get a vacation rental in Kihei for a little over $100.

    There’s also a backlash to the cleaning fees and a long list of chores for an Airbnb.

    Unless the vacation rentals rental get to under $200 a night it’s going to continue.

    I’ve been spoiled for choice in Asia especially Thailand where they welcome tourists with a smile and you can stay at a 5 star resort for around $100.

    I love Maui and have a condo in wailuku with beautiful ocean views and Iao valley views. I feel it’s one of the best islands.. unfortunately many visitors are priced out.

    1
  5. Hawaii is a place I think anyone should see – once. It is insanely beautiful on all islands. Yet, if I did not have family there, no way would I have been back multiple times. The costs are outrageous, the policies of many hotels for cancellations even months in advance draconian, and the whole “we detest tourists” thing when the economy of the Islands is based on tourism – yeah, no thanks. I am an extremely respectful visitor, so it’s it is so not me.
    As another person said here, they don’t want you, but they sure want/need your money.

    2
    1. I live in Florida. We have a bumper crop of Canadians this year. I doubt many will forgo the warmth of the USA because of TDS.

      1
  6. Canadian here. Things have changed now that Trump has declared economic warfare on Canada with 25% tariffs for a nonsensical reason. My wife and I were frequent travelers to Maui, but we have scrapped our plans for a November visit. And we won’t be coming back while he is President, nor will we be heading to any destination in the US.

    My three brothers are taking the same position, as are many friends. The overall malaise for Hawaiian tourism may get worse with Trump’s actions.

    Enjoy what you get America. It’s all yours.

    Take care.

    3
  7. I visited Hawaii for the first time in April 2024. It was a very last minute trip I admit but needed somewhere cheap to stay as it was for work purposes. Most Airbnbs are extremely expenses. While they have cheap enough room rates, there are fees for everything else. Parking comes at a cost, there is a separate resort fee at some rentals, and some even charge for the most basic of essentials such as Wifi. So all in all the costs stack up pretty quickly and end up being even more expensive than hotels. Until the short term rental market is properly regulated, I can’t see them surviving in the long run.

    2
    1. We rent a Maui STR on the beach using VRBO and they charge a booking fee but most of us don’t do any of what you describe and the cost is far below hotels. The only regulation is you should always know the price before you commit. I know a lot of owners and none of them would do anything like what you describe.

      3
  8. The number 1 cause is Maui politics. The mayor of Maui doesn’t care if vacation rentals go into free fall. A large number will go off the market.
    Those remaining can charge premium prices.

    4
  9. There are so many reasons to point to here on Maui. The pandering Mayor demonized STRs and sale prices have plummeted if you want to sell and get out. Visitor and ownership taxes are obscene and still going up. HOAs have doubled in some cases because of insurance rates rising. The State Legislature could care less. Let’s not forget the Hotels lining the pockets of the elected officials with on and off the record support. It’s embarrassing. Visitors still Want more than a hotel room and STRs still offer far more, for less.

    6
  10. When I read the data provided in the letter attached I see demand actually increased YTD 2024 vs. 2023 on Kauai. The main reason for the declining in occupancy, at least on Kauai, is the supply is increasing at a rate that demand can’t keep up with, which is driving the occupancy rate down to 50%. Driving around the Poipu area on the south shore you’ll see new large developments with more STVR’s being added to the market. The local residents complain about all the traffic and other negatives STVR’s bring with them, but the County of Kauai keeps approving these new developments. The county knows these new properties bring in large amounts of new tax and other revenue. There’s plenty of local demand for residential property, but none of them can afford the asking prices. Someone should be asking these county officials why they keep approving more new construction of STVR’s when there’s not enough demand for them? Someone’s making a lot of money and it’s Not existing STVR owners.

    3
  11. Anyone who thinks short term rentals are good for society that are located in areas zoned Residential or Ag has no clue what they are talking about.

    They are just housing speculators, trying to make money in the housing market.

    2
    1. So prove them wrong. Put up or shut up. Go around them. Elect leaders that are willing to bring in investors that will build housing and industry that will benefit everyone. They are out there but the current corrupt administration will never do it because they don’t want to give up their gravy train. I dare you. Stop being myopic.

      4
      1. The problem with the housing crisis is that the politicians don’t want it , I saw it when I lived in Maui for years and the same people who complain about more housing continue to vote for these people. They just don’t have common sense and to be honest they get what they deserve.

        1
  12. It’s no secret. The nativist movement has grown. Overall hostility to non-natives has grown from both the general population as well as the government. Top that off with everything getting more expensive and visitors would rather go elsewhere. The over all feeling is, “we want your money, but we don’t want you”!

    13
    1. That’s right, because Maui is socialism at its worst while dependant on capitalism for survival. Nearly 40% of Mauis economy comes from tourism. Classic case of biting the hand that feeds you.

  13. Rob, How about writing an article laying out the truth about Maui STR’s as Pat just so eloquently stated? Hotel zoned and built vs “apartments”. Even if the current draft the Maui council is working from gets passed, hotel zoned buildings will not be closed down. Correct? It’s easy to see or even ask the manager on any booking platform which category the unit in question falls into. There’s also a grace period in that draft of 2 years for south Maui “apartments”. We all hope the council doesn’t pass this law so keep emphasizing the damage it will do. That would separate the wheat from the chaff and be a great benefit to all parties.

    2
    1. Hi Rob, Thanks for the quick reply
      Two things.
      1. You sent me a link “We just did this” for some completely different subject. No problem, I do it all the time :-).
      2. Pam wrote specifically about Hotel-Zoned properties and that they were “safe” vs apartments that are on the M List. You referred to the M List which you and I know doesn’t include the Hotel-Zoned properties but it’s not likely that the average potential guest would even look at it. You didn’t cover this very important angle. Those of us that own STR’s in these Hotel-zoned buildings have tried to include this in our descriptions but most potential renters don’t read it. They would read your comments though. Thanks

  14. Nice info about vacation rental problems..That is the main reason we have stopped coming.How is Maui going to survive without all the rental taxes and how could the state let the hotels ruin it for all?

    4
    1. They’re hoping that the hotels will be able to command higher prices and fees, and be taxed accordingly, to make up for the STR tax shortfall, plus the hotels are expanding their offerings to include STRs themselves. It’s the status quo – destroy mom & pop businesses and allow the big guys to thrive.

      3
  15. We usually go to Maui for the winter but skipped this winter. We feel it’s unsafe, they have ruined the economy, the costs are very high and there are just other places to go. I don’t see a turn around due to the one sided politics.

    8
    1. The pending regulations in Maui scared us off. We’re still coming this summer, spending a couple days in Hana and the rest of the week uplands. We really wanted to do a week in west Maui but between the disruptions of the fire, the reports of some residents being hostile and the pending regulations possibly causing a cancellation, we’re not. Going to Molokai for a week instead.

      3
  16. The condo rental owners have priced themselves out of a reasonable market. A person can get a lot more for less in other areas outside of Hawaii.

    3
  17. There are so many reasons to point to here on Maui. The pandering Mayor demonized STRs and sale prices have plummeted if you want to sell and get out. Visitor and ownership taxes are obscene and still going up. HOAs have doubled in some cases because of insurance rates rising. The State Legislature could care less. Let’s not forget the Hotels lining the pockets of the elected officials with on and off the record support. It’s embarrassing. Visitors still Want more than a hotel room and STRs still offer far more, for less.

    4
  18. Short Term Rentals in Residential or Ag zoning need to be banned across the entire State of Hawaii and only allowed in Resort zoning.

    Housing speculation/shelter inflation is causing huge problems.

    In the US Hawaii has the HIGHEST:

    1. Family of 4 living wage needed ($259k).
    2. Homeless population per capita (8/1k).
    3. Home price/income ratio (9.1).
    4. Cost to maintain a home ($29k).

    and, as a result, the highest

    5. Domestic out-migration per capita (-6.4/1k).

    1
    1. Mynd, your numbers don’t support your conclusion because you’ve proven that if STR’s were banned, residents that would need them couldn’t afford them. There is plenty of land and eager investors ready to partner with HI’s government and build affordable housing. The problem is that current government won’t do it. Too much red tape and corruption. Channel your energy towards replacing state and county elected officials with those that are ready to go to work for you and the situation will change quickly.

      6
      1. Wrong. You have no idea what you are talking about.

        There is a huge shortage of every level of the workforce in Hawaii, doctors, nurses, engineers, planners, lawyers, waiters, police, fire……..everything.

        The housing you are talking about is for the low-income band. Most workers as listed above would not qualify, and they cannot find housing commensurate with their professional and educational background, so they have out-migrated or they are not in-migrating.

        Speculative STR’s need to be entirely removed from Residential and AG zoning, period. It is this hoarding of housing that drove up prices, and it is their removal along with the end of other speculation that will (and already is) dramatically lower prices.

        STR’s are being banned globally for the same reason, they are terrible for society in Residental/AG zoning.

        Google Spain and STR’s, huge housing crisis and they are looking for national bans.

        2
      2. More information to help you since you don’t know what you are talking about:

        As the STR speculators begin to flee when they take losses, Maui County listings are rising quickly and median listing prices are falling:

        fred.stlouisfed.org/series/ACTLISCOU15009

        fred.stlouisfed.org/series/MEDLISPRI15009

        This is already happening across all of Hawaii:

        fred.stlouisfed.org/series/ACTLISCOUHI

        fred.stlouisfed.org/series/MEDLISPRIHI

    2. This has to be the biggest lie being propagated in Hawaii. For one, vacation rentals have already been banned in ag districts and residential areas, literally across the entire state by each county. Yet every single ban that was passed never ever resulted in any increase in affordable housing. The lack of affordable housing has to do with the fact that every county keeps enacting stricter and stricter building codes that make it economically not viable to build affordable housing. And by pushing all tourism activity into resort zones, this just reinforces a monopoly for mainland & foreign investors who pretty much own everything in the resort zones. God forbid any local gets to partake in the tourism industry. Unfortunately tourism is all there is, Farming isn’t even economically viable in Hawaii thanks to the fact that the state does not support Farming and has one of the lowest Farming budgets in the entire country.

      4
      1. I agree. And it doesn’t have to be that way. Kick the current corrupt politicians out ASAP. You, the citizens of Hawaii, are responsible for calling the shots. So what’s stopping you?

        3
  19. We own a vacation rental (going on 11 years) and our operating costs have skyrocketed. Our property taxes alone have gone up more than 200% (and that is *not* aligned with home value increases). Our AOAO fees have also doubled in that time. Making matters worse, guests who book thru VRBO or AirBnB are getting hit with huge booking fees from those sites, on top of those sites charging us big “commissions”. We have a book direct site with no booking fees & encourage guests to book there & explain that their credit card will protect them from any fraud concerns & travel insurance is more reliable than any of those websites’ “guarantees”. Many still choose to pay the booking fees. The cost to rent our waterfront 3bd/2ba is far & away less than three hotel rooms (even with the cleaning fee that goes in full to our on-island team). W
    Yet, we still get guests asking for huge discounts or asking to pack more than our maximum number of guests into our home. It’s a real challenge.

    5
  20. My wife and I come to Hawaii like once every few years. Not so much the last visit, but the visit before, we clearly felt unappreciated and unwelcome. On the Big Island we saw pervasive drug use and fights near the volleyball area along the water…maybe that’s part of the issue as well…but like I said, we saw an improvement last summer.

    1
  21. Shouldn’t there be an article to help the vacationers clearly understand that the rental condos that are in the hotel zone are safe to book, unlike the
    ones that are in the apartment zoning, which will be restricted for short-term renting. I think this may help the tourist to understand better and don’t have to be shy from renting the STRs that are in the hotel zone. Currently, maybe the power that may have shot themselves in the foot by increasing different fees so much, making it harder for the travelers to swallow. Hense less income for the state, not to mention increasing the unemployment and harship for the small businesses that are dependent on the tourism industry. But I guess these problems have already been presented to the governor. It’s just my worthless opinion.
    Thank you.

    3
    1. Monton, you’re correct and not worthless. But other factors seem to be more important to potential renters. The state and county governments do nothing to promote tourism.

      2
  22. Two comments.

    1. Hotel stays booked with points (not $) could be boosting hotel #’s.
    2. VR’s managed by new owners or lazy rental managers that don’t pay attention to what other owners are actually booking their VR’s for will end up with low occupancy. Maui has a lot of new owners who purchased using cash. Our building is now almost all VR’s. A few years ago it was 60-70%. Some owners that bought units (cash) and for future appreciation may not care if they rent them or not because there’s no business case for rental supported profits. The VR is a tax write off for them as they hope to flip the unit in the future. Owners and managers that charge the rates that booking visitors accept are getting descent occupancy rates and doing fine.

    So these numbers don’t mean squat in many cases.

    2
    1. VRBO (along with the partner Expedia and Hotels websites) have come out the the Key+ card with Wells Fargo. It is very generous with rewards usable at the three websites. It would be interesting to see if this moves the needle at all.

      1. Mathew. Buildings zoned (and built as) hotels are safe. South Maui has several right on the water. Bookings are down a bit so some of us still have availability for the season. Literally nothing has changed there and prices are far lower than the big chain hotels.

        1
  23. Surprisingly odd how car rental taxes, insurance and such was calculated to be 52% and now short term rentals is down to 52% also. IMO a shift in how Hawaii government collects from tourists versus the short term rental folks. Just a coincidence or a planned strategy?

    1
  24. I am shocked – just kidding. Better add a ‘Low Occupancy’ fee on top of all the other fees, see how that goes. Has anyone ever considered bringing ‘down’ prices to see if that spurs demand? Hello? If hotels are slow their rates always come down for a short time anyway.

    3
    1. Exactly. Only an idiot would raise prices to try to make more profit in this business. Investors that paid cash for a VR hoping it appreciates so they can flip it don’t really care if it’s rented or not. Fixed costs just make the VR a looser for tab purposes and offset profits made by other investments.

      1
  25. Last March, we sold our condo because of the rising maintenance costs and constant regulatory requirements were turning our home into a money pit. Your emails have convinced us that we made the right decision.

    5
  26. The problem I have seen with “rentals” (ie. Airbnb, et al.), is that many people are frustrated with the fees on top of the rental price. This applies to such rentals everywhere.

    I see a lot of videos and comments about how the extraneous fees are out of control, especially where many times there are so many restrictions, no Real service, and the client is expected to do much of the cleaning – even with an exorbitant “cleaning fee.” It just makes traditional hotels more attractive, even if you have to pay a little more.

    9
  27. What’s ruined certain Air BnB’s is people partying on the premises or in the neighborhood. Also corporations or individuals buying up lots of houses to turn them into Air BnB. Air hotels and homeowners can coexist.

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