Sun, Jul 05, 2009
Visitors to Hawaii, like these at Waikiki Beach in Honolulu,are paying record-high hotel rates despite a sharp drop in hotel occupancy this year, so hoteliers are adding extras months earlier than usual.
Lucy Pemoni / The Associated Press

Business

Hawaii's hotels adding extras to combat slump in occupancy

By Jaymes Song
the Associated Press
Tucson, Arizona | Published: 04.20.2007
HONOLULU — Visitors to Hawaii are paying record-high hotel rates despite a sharp drop in occupancy this year. The softening has prompted many hotels to offer deals and incentives — from complimentary surfboard rentals to free room upgrades — months before they normally do.
State tourism liaison Marsha Wienert said such specials are usually offered during the spring, or the so-called "shoulder" period, but hotels started advertising them as early as mid-January. She said Hawaii tourists can expect "added value," such as a fifth night free, a meal or an activity.
The cooling comes after 2 1/2 robust years for the hotel industry, which has benefited from Americans leery of traveling abroad.
Hotel occupancy in Hawaii fell to 77 percent for the first two months of the year, compared with 84 percent for the same period in 2006, according to the latest report by Hospitality Advisors LLC.
The statewide average rate, however, surged 8 percent to $201, which is among the highest in the nation.
In February, revenue per available room, a key industry measure known as "RevPar," dipped 3 percent to $161, the first decline since August 2002.
"On a 10-year basis, we're having a perfectly fine first quarter. We're just a little disappointed because the previous two years were so hot," said Barry Wallace, executive vice president of hospitality at Outrigger Enterprises, which manages 30 properties statewide.
Outrigger, like other chains, often sets rates for its 9,000 rooms in Hawaii a year in advance for wholesalers. So adjusting the rates is not as simple as a highway motel changing the sign and turning on the "vacancy" light.
Wallace said the company is engaging in selective discounting to certain segments, such as Hawaii residents, in hopes of a short-term boost.
Hyatt, which operates three resorts in Hawaii, is also trying to stimulate some short-term activity by offering spring packages that include complimentary room upgrades, free breakfast or tickets to a luau show.
Hotel consultant Joseph Toy, chief executive of Hospitality Advisors, said a number of hoteliers predicted the softening and prepared with contingent marketing plans, which are being rolled out.
Some say fewer tourists and higher rates may not necessarily be a bad thing for Hawaii.
Walter Jamieson, chairman of the University of Hawaii's School of Travel Industry Management, said if Hawaii is sincere about attracting high-end tourists and not going for volume, it has to accept the fact that the numbers may be down.
Hawaii is the most expensive state in the nation in which to vacation, according to a survey by AAA last year.
The average cost for food and lodging for a family of four in Hawaii was $559 a day, more than double the national average and more than $200 higher than the next closest state, Nevada.