Hawaii ranks high compared to international “sun and sea” destinations

Sun and sea destinations abound around the globe, but time and time again, the Aloha state of Hawaii ranks at the top for chosen ocean holidays.

Hawaii hotels statewide recorded the highest revenue per available room (RevPAR) and average daily rate (ADR) of the top U.S. markets in the first six months of 2018, according to the Hawaii Hotel Performance Report released today by the Hawaii Tourism Authority (HTA).

Year-to-date, RevPAR in the Hawaiian Islands grew to $229 (+7.9%), ADR rose to $280 (+6.0%) and occupancy increased to 81.7 percent (+1.4 percentage points) in the first half of 2018 compared to the same period last year (Figure 1).

HTA’s Tourism Research Division issued the report’s findings utilizing data compiled by STR, Inc., which conducts the largest and most comprehensive survey of hotel properties in the Hawaiian Islands.

All classes of Hawaii’s hotel properties statewide reported RevPAR growth in the first half of 2018, with Midscale & Economy Class hotels ($139, +13.9%) and Upscale Class hotels ($163, +10.5%) both reporting double-digit increases compared to a year ago. Luxury Class hotels also performed well, earning RevPAR of $432 (+9.9%), which was driven by increases in both ADR to $562 (+8.0%) and occupancy of 76.9 percent (+1.3 percentage points).

The strong, across-the-board performance raised the Hawaiian Islands’ RevPAR to $229 and earned a number one nationwide ranking when compared to other top U.S. markets for the first half of 2018. New York City followed at $205, with San Francisco/San Mateo at $192 (Figure 2). Hawaii also led the top U.S. markets in ADR at $280, again followed by New York City at $241 and San Francisco/San Mateo at $236 (Figure 3). Hawaii ranked second nationally for occupancy at 81.7 percent, trailing New York City at 85.2 percent and being on par with Orlando, FL1 (Figure 4).

“For Hawaii to earn the number one ranking in the U.S. in both RevPAR and ADR as the market is rising nationally is a significant achievement for the state,” said Jennifer Chun, HTA tourism research director. “Most U.S. markets reported RevPAR growth in the first half of 2018. Very few markets were down compared to a year ago.”

Hotels in each of Hawaii’s four island counties enjoyed a solid first six months of 2018. Maui County hotels led the state overall in RevPAR at $313 (+11.5%), driven by an increase in ADR to $398 (+10.9%). On Maui, the luxury resort region of Wailea generated outstanding results, leading the state in RevPAR at $537 (+16.5%), ADR at $607 (+13.4%) and occupancy of 88.4% (+2.4 percentage points) in the first half of 2018. In addition, hotels in the Lahaina-Kaanapali-Kapalua resort area reported growth in RevPAR to $259 (+8.8%), which was driven by an increase in ADR to $332 (+9.1%).

Kauai’s hotels led the state in growth of RevPAR ($233, +15.2%), boosted by increases in ADR to $295 (+12.0%) and occupancy of 79.2 percent (+2.2 percentage points).

Oahu hotel properties generated the state’s highest occupancy at 84.4 percent (+1.6 percentage points) in the first half of 2018. Coupled with a modest increase in ADR to $233 (+1.9%), Oahu hotels earned RevPAR of $197 (+3.8%). Waikiki hotels grew RevPAR to $195 (+3.8%) supported by increases in both ADR to $229 (+1.9%) and occupancy to 85.1 percent (+1.6 percentage points).

For the first half of the year, hotel properties on the island of Hawaii reported growth in RevPAR to $210 (+9.9%), bolstered by increases in ADR to $272 (+7.6%) and occupancy of 77.5 percent (+1.6 percentage points). The Kohala Coast resort region earned RevPAR of $288 (+9.4%), with an increase in ADR to $387 (+11.4%) offsetting a decline in occupancy to 74.6% (-1.4 percentage points).

Chun commented, “The Hawaiian Islands enjoyed the highest RevPAR and ADR over the first six months of the year since the inception of STR’s survey. Every class of hotel property and each island county reported increases in RevPAR. Maui’s performance was very strong with Wailea being exceptional. The island of Hawaii benefited from five good months to begin the year, which offset a downturn in occupancy during June while Kilauea volcano was continuing to erupt.”

Hawaii Ranks High Compared to International “Sun and Sea” Destinations

Hawaii’s four island counties fared favorably in RevPAR growth in the first half of 2018 when compared to international “sun and sea” destinations (Figure 5). Maui County hotels ranked third for RevPAR ($313, +11.5%), trailing the Maldives ($447, +3.6%) and French Polynesia ($321, +9.0%). Kauai ranked fifth ($233, +15.2%), with the island of Hawaii at seventh ($210, +9.9%) and Oahu at eighth ($197, +3.8%).

Year-to-date through June, Maui County ranked fourth in ADR ($398, +10.9), with Kauai at sixth ($295, +12.0%), the island of Hawaii at seventh ($272, +7.6%) and Oahu at eighth ($233, +1.9%). The top three destinations for ADR were the Maldives ($680, +1.3%), French Polynesia ($527, +17.5%) and Cabo San Lucas ($421.08, +19.6%) (Figure 6).

Oahu led all sun and sea destinations in occupancy at 84.4 percent (+1.6 percentage points) over the first six months of 2018 followed by Phuket (79.7%, +1.8 percentage points). Kauai ranked third (79.2%, +2.2 percentage points), with Maui at fourth (78.7%, +0.4 percentage points), and the island of Hawaii at fifth (77.5%, +1.6 percentage points) (Figure 7).

June 2018 Hotel Performance

For the month of June, Hawaii hotels statewide reported increases in RevPAR to $227 (+4.7%) and ADR to $277 (+5.4%), which offset a slight decline in occupancy of 82.0% (-0.6 percentage points) (Figure 8).

“Statewide RevPAR and ADR this June were the highest ever for any month of June,” said Chun. “That is noteworthy considering how Kilauea volcano negatively impacted RevPAR and occupancy on the island of Hawaii. However, the overall performance of Maui County, Kauai and Oahu more than compensated for these declines. Waikiki and Wailea were full during June with occupancy of 88.2 percent and 89.6 percent, respectively. The success of these regions helped lift up the state.”

All classes of hotel properties reported higher RevPAR and ADR in June compared to a year ago. However, only Midscale & Economy Class hotels produced higher occupancy at 82.5% (+0.8 percentage points). Luxury Class hotels recorded a small drop in occupancy to 74.5% (-2.0 percentage points).

In June, Maui County hotels reported the highest RevPAR at $295 (+10.7%), with strong growth in ADR to $381 (+11.3%) offsetting flat occupancy of 77.3 percent (-0.4 percentage points). Wailea hotels led the state’s resort regions in all three categories, recording increases in RevPAR to $518 (+18.8%), ADR to $579 (+12.9%), and occupancy of 89.6 percent (+4.4 percentage points). The Lahaina-Kaanapali-Kapalua region also grew RevPAR to $250 (+7.9%), with rising ADR ($324, +9.4%) offsetting declining occupancy of 77.2% (-1.1 percentage points).

Kauai hotels earned the state’s highest county RevPAR growth in June, increasing to $228 (+11.6%), which was supported by ADR of $294 (+10.1%) and occupancy of 77.4 percent (+1.0 percentage points).

Oahu hotels reported a respectable June, with increases in RevPAR to $213 (+3.0%), ADR to $243 (+2.6%), and similar occupancy of 87.7% (+0.4 percentage points). Waikiki hotels earned RevPAR of $210 (+3.2%), supported by an increase in ADR to $239 (+3.0%) with occupancy remaining flat at 88.2% (+0.2 percentage points).

Hotels on the island of Hawaii felt the effects of Kilauea volcano’s continued activity in June, however, the 33-room Volcano House, located in Hawaii Volcanoes National Park, is the only hotel closed due to this impact. RevPAR for the island of Hawaii dropped to $163.91 (-8.3%) in June. While the ADR of $239 (-0.3%) was similar to a year ago, occupancy declined to 68.6 percent (-6.0 percentage points). Hotel properties in the Kohala Coast resort region also experienced a drop in RevPAR to $214 (-13.3%) in June. While a small increase in ADR to $335 was realized (+1.0%), this was more than offset by a decline in occupancy to 63.9% (-10.6 percentage points).

Chun noted, “Two notable RevPAR growth streaks for island of Hawaii hotels were broken in June. The island overall saw its 31-month streak of continuous RevPAR growth, going back to November 2015, ended. In addition, the Kohala Coast resort’s streak of continuous growth over the past eight months ended in June as well.”