The Bratton Team

Hawaii hotel prices top nation during first half of 2023


Hawaii had the nation’s highest hotel room rates for the first half of this year after beating out New York and Miami for the top of the heap.
Hawaii hotels led U.S. markets with the nation’s highest average daily room rate of $380 and revenue per available room, or RevPAR, of $285 in the first six months of this year, according to the Hawaii Hotel Performance Report recently published by the Hawaii Tourism Authority.
Hawaii hotels came in sixth for occupancy in the nation at 74.9%. Only Las Vegas; New York; Orlando, Fla.; Tampa, Fla.; and Miami had better occupancy rates, according to the HTA report, compiled using data from STR Inc.
Hawaii hoteliers say summer business isn’t coming in as hot as it was during 2022’s so-called COVID-19 revenge travel season, when huge numbers of U.S. travelers were making up for time lost during the pandemic. Still, compared with the rest of the nation, Hawaii appears to be holding its own.
Emmy Hise, senior director of hospitality analytics for CoStar Group, told the Honolulu Star-Advertiser on Monday that “Maui and the Hawaiian island market that we track still have the highest (average daily room rate) in the nation, but they have for the past few months been seeing year-over-year declines.”
HTA reported during the first six months that Hawaii’s statewide average daily room rate grew 3.9% from the $365 attained the first six months of 2022 and was up 35.6% from 2019, when ADR was $280.
Statewide RevPAR, which is the measure of what each hotel room earns regardless of its occupancy status, rose in the first half of the year 7% from 2022’s $266 and 26.3% from 2019’s $225.
Statewide occupancy during the first six months of this year rose 2.2 percentage points from 72.7% in 2022 and was down 5.5 percentage points from the same period in 2019, when occupancy was at 80.5%.
Despite the recent softening trend, travelers to Hawaii still were paying high rates for hotel rooms across the state in June, when ADR grew to nearly $389, which was up 38.6% from $281 in June 2019 but down 2% from the $397 achieved in June 2022.
Hise said CoStar is forecasting continued softening in leisure destinations across the country.
“We are calling it the normalization of travel — so revenge travel is over at this point,” she said. “People who may have gone on this ultra- luxury vacation are going back to their normal travel patterns whether that means not traveling as much or going to the normal priced hotels that they are used to versus going really big.”
Hise said that according to CoStar, the U.S. occupancy level might already have peaked during summer season this year. “We are forecasting a recession in the last part of this year leading into (the first quarter) of 2024,” she said.
Hise said family savings are going down, and debt and credit card bills are going up.
“People who might have splurged for Hawaii aren’t anymore, whereas the people who are a little more recession-proof are probably going to do the travel,” she said.
Hise said a recession also could affect the coming corporate travel season at a time when corporate travelers are needed to offset declines as leisure travelers return to traditional patterns of seasonality.
Still, she added that even with a few months of year-over-year slowdowns, the Hawaii is still significantly above 2019 levels.
“Hawaii continues to be a premier top leisure destination just some of the rate growth is normalizing because having double-digit rate growth year-over-year is just not sustainable,” Hise said. “If we compare Hawaii to the rest of the nation, it’s still well ahead of the other markets that we track in terms of ADR and I would be surprised to see it go lower any time soon if at all.”
State Business, Economic Development and Tourism Director James Tokioka said in a statement last week to mark the release of June visitor statistics, “With the accelerated recovery of international visitors, Oahu experienced the highest increase in visitor arrivals for the first half of 2023, and neighbor islands experienced higher increases in visitor expenditures mainly due to their higher room rates.”
Some observers caution that Hawaii, known for its laid-back island style, may not be ready to deliver the higher service demanded by customers paying higher prices. They fear price-sensitive tourists might reduce other consumer spending, decide to cut trips short or look elsewhere.
Some of these concerns already may be warranted. Jerry Gibson, president of the Hawaii Hotel Alliance, said many hoteliers, especially on the neighbor islands, are reporting that summer is coming in weaker than expected.
“We’re hoping that 2024 will be a better year than this one has been,” Gibson said.
Hawaii tourism officials have argued that higher prices help the destination attract higher spenders; however, that doesn’t mean all businesses benefit. HTA statistics show that while per-person, per-day visitor spending on lodging rose 40.2% from June 2019 to June 2023, shopping expenditures by visitors fell 7.7%.
Another big fear for Hawaii’s visitor industry is that rather than cutting back, some visitors might choose to book elsewhere. Indeed, Hise said there has been a lot of interest in Europe this season.
“We’re definitely competing with European markets,” she said. “People are saying it’s less expensive to get a flight to Europe, and the hotels are a lot less expensive, and then there is the strength of the dollar with the conversion ratio.”
However, Hawaii’s high average daily room rates are more competitive when compared with competing global sun-and-sea destinations.
Oahu, Maui, Hawaii island and Kauai made the top-15 list of competitive sun-and-sea destinations around the globe for ADR, RevPAR and occupancy during the first half of the year.
TOP 5 U.S. MARKETS, FIRST HALF OF YEAR
REVENUE PER AVAILABLE ROOM
Revenue per Rank Destination Available Room % change

  1. Hawaii $284.51 7.0%
  2. New York $204.93 23.2%
  3. Miami $186.81 -7.1%
  4. Orlando, Fla. $156.64 11.4%
  5. San Diego $149.29 8.6%
    AVERAGE DAILY RATE
    Rank Destination Average daily rate % change
  6. Hawaii $379.68 3.9%
  7. New York $264.01 8.7%
  8. Miami $248.99 -5.8%
  9. San Francisco/San Mateo $226.46 12.5%
  10. Boston $211.04 7.7%
    OCCUPANCY
    Percentage Rank Destination Occupancy Pt. change
  11. Las Vegas 78.0% 5.2%
  12. New York 77.6% 9.1%
  13. Orlando, Fla. 76.4% 2.3%
  14. Tampa, Fla. 75.3% 0.0%
  15. Miami 75.0% -1.1%
  16. Hawaii 74.9% 2.2%
    Source: STR Inc./Hawai‘i Tourism Authority