As summer unfolds, with the peak of the tourist season starting just one week from now, the Hawaii tourism sector faces ongoing challenges. Hotel performance shows a continued, slow downward trend. The latest May 2024 Hawaii Hotel Performance Report just out from the Hawaii Tourism Authority paints a concerning picture of the industry’s current state and trends.
Hawaii statewide visitor insights.
Statewide hotel occupancy fell slightly to 71.2%, a drop from 2023. This points to a troubling trend, at least for the industry, regarding the gradually weakening visitor numbers. The average daily room rate (ADR) dropped by an insignificant 1% to $342. That amount is before the 18% accommodation tax, bringing the average post-tax rate to $404, before any other costs, including resort and parking fees, for example. Maui hotel rates, including 18% tax, were $610.
How islands performed in May.
Maui County remains impacted by last year’s wildfires, among other issues. Those include the extreme cost of Maui hotels and the concerns around the proposed elimination of up to half of Maui vacation rentals. Maui hotel occupancy dipped to 58.3%, which has become a long-term downward trend.
Honolulu continues to show the most resiliency compared with neighbor islands.
Oahu, on the other hand, experienced stable occupancy rates of 78.4%. Kauai saw a drop, while Big Island achieved a small improvement.
Kauai hotel occupancy is 70.9 %, down by 2.9% compared with 2023, while the Big Island saw a small improvement to 63.7%. Both islands are maintaining higher average daily rates, with Kauai at $486 and Big Island at $426 (includes 18% tax).
A broader view of Hawaii tourism at the crossroads.
The consistent decline in key performance indicators suggests that Hawaii’s tourism recovery has faltered. With international visitor numbers yet to return to pre-pandemic levels, as well as domestic travel cooling, the entire sector is grappling with multiple headwinds with few signs of improvement on the horizon. Some, however, may say that this is just what the state had in mind in its desire to curb the industry.
The economic impact of Hawaii tourism changes is broad and deep.
The decrease in tourism has significant implications for Hawaii, affecting local businesses and the state’s overall economy. In addition, rising operating costs and lower occupancy rates are squeezing profit margins for many hotels.
Have Hawaii hotels, at long last, hit the end of price increases?
Hotels’ marketing efforts are ramping up even in summer to attract more visitors, while significant challenges remain. We are definitely seeing this trend of more promotional pricing during a time of year that has rarely been known for that in Hawaii. More on that topic to follow.
The May 2024 HTA report underscores that Hawaii remains at a pivotal juncture with its tourism industry, even as stakeholders work towards revitalizing the sector. If the state is serious in its desire to revitalize tourism and not seeing it dip further, greater efforts and robust marketing may be needed to reignite waning visitor interest and drive the state’s economic recovery.
What are your thoughts on the latest data from the state about Hawaii tourism?
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The main reason I am going less often is because it’s so damn expensive hotels, car rentals are the worst! Airfare follows has a close third…🤒
$404 a night is a ridiculous price. That’s why people aren’t coming. For the foreseeable future I’m only going to be connecting through Hawaii to other more affordable destinations. I’m going to Vanuatu in October and I only paid $75 a night for a Waterfront Villa! In Hawaii something like that would be $5k a night. Average people can’t afford it anymore.
We were planning a couple’s vacation, because we’ve always wanted to visit, but put simply, the prices were too high for everything – hotels, flights, you name it, so we went to the Caribbean. We’re not poor, but there comes a point when it just seems silly to spend that kind of money on something we can find elsewhere for much less. If Hawaii wants to restrict tourism, I’m all for it – people still have to be able to live on the island, and I applaud the State’s efforts to make that more possible. If the prices keep rising like they have, though, it’s only going to be the super rich visiting, which I hope works for the State. Honestly, I think it would make more sense to ban AirBnb and VRBO so that houses, condos and apartments are only used by people who live in them, and keep the hotels for the tourists, but that’s just me. Seems like otherwise Hawaii is looking at a never-ending cycle of price increases on everything that collapses the economy…
Aloha Will.
Be careful what you wish for. If all the houses and condos and apartments were only occupied by those who live there and the hotels were the only game in town, you can expect the exorbitant hotel rates to explode even further. Are you ready to pay $1000 per night plus fees at a minimum? How about $2000?
I’m confused ? Hawaii tourism chased me away a few years ago. Prices were going up. They wanted rentals restricted. They wanted the number of planes arriving to be cut. Some locals wanted me to not be there. Now they are complaining that tourism is Down ?
I miss Kauai, but have found other great places to enjoy spending my money…..
Controversial subject.
We are blessed to go twice a year. Retired on a fixed income.
We penny pinch and budget all year to pay for the 2 trips.
Everything everyone has said here about out of control $ increases is true.
The middle class and working class like us are being priced out in favor of the rich elite.
Less tourists and the ones who do go spend more $.
We live in SoCal/OC and worked 99 years total in the tourism industry.
Tourism is huge here and we welcome,need,and want you here.
This is what Hawaiians wanted and they got it. Congrats. You killed the Golden Goose!
Could it also be that fewer people want a hotel experience? Someone (besides the hotel industry) should do a study on lodging preferences. I wonder if there’s a trend the Hawaii is fighting?
Hawaii used to be something really special back in the 70’s and 80’s, when sugar cane and pineapples farms were part of the tourist experience. When you took a circle island tour and stopped at some great places to experience the Hawaiian culture and way of life. Now it’s all about fancy price gouging hotels, high end shopping, and restaurant chains. After reading the report and how much the prices have increased since 2019, I’m stunned and saddened. I know things must and do change, but Hawaii’s problem is the government that the locals voted into office and the changes they are making that are ruining the islands for everyone.
Hawaii is out-pricing itself as a tourist destination. Hotel accommodations and restaurant costs keep increasing. The middle class is having a very hard time making ends meet due to the high inflation. As a result, they are either not traveling or taking trips to less costly destinations.
Prices are high. Treatment of tourists is poor by locals. Not planning any more Maui or Kauai trips
If I lived on the mainland there is no way I would travel to Hawaii with hotel room rates on the Big Island over $350/night (plus taxes and resort fees)! Who can afford to pay that? And that’s without the cost of airfare, car rental, and food. As someone who owns a business dependent on tourism, I find this data truly frightening.