Hawaii Hotels Lose $741 million in 2009

by Jessica MCILHINNEY on February 17, 2010

Hotels in Hawaii had a really hard time staying afloat last year, with state revenues falling $741 million to under $3.6 billion. Most of the losses were due to lower room rates - $501 million loss - while the rest was from less room nights. Hawaii hotels were down by 17% compared to 2008, which was also down 7% from a 2006 peak.

These figures were revealed on Tuesday by Hospitality Advisors LLC, the weekly hotel occupancy and monthly REVpar research firm. Company chief executive officer Joe Toy said that most of the market losses last year were sustained up until the end of September, and then the stability of demand began to show during the last quarter.

For the entire year, hotel occupancy in Oahu was 73%, with Maui County having 62%, Kauai 60% and the Big Island with less than 55%. There was a big difference between the 75% occupancy level in Waikiki compared to the 63% around the rest of Oahu. However, the difference from district to district on the other Hawaiian islands was less.

Occupancy across the state was 66.5%, which was the third most in the US - New York had 77% and San Francisco had 72%, while Miami and Washington DC showed 65%. Hawaii came in second for average room rate after New York, but did better than Washington, Miami and Boston. The state’s REVpar was also second to New York.

However, since most of this damage was done by the end of September, it’s possible that there will be some recovery this year. This actually holds true for all of the travel industry, but they must be careful not to push prices back to peak levels too fast like they would like.  If they do, it could push the economy back into recession.

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