Kaua‘i leads in hotel occupancy

Kaua‘i is beating O‘ahu and leading the state in hotel occupancy rates for the first nine months ending September 2004. Rates were up 4.5 percent for that nine-month period to 80.8 percent, and average daily room rates increased by 5.9 percent to $176.27.

But September saw a drop of 1.4 percent in hotel occupancy on Kaua‘i, to 76.3 percent. Still, the amount of money we collect per room here rose in September by 4.6 percent to $167.

The good occupancy numbers so far this year mirrors visitor numbers to Kaua‘i, which are up 3.8 percent so far this year over last year, to 772,757 – far exceeding September expectations.

Kaua‘i visitor numbers were up 8.8 percent last month compared to September, 2003.

Oahu occupancy so far this year closely followed Kaua‘i at 80.3 percent for a gain of 7.7 percentage points.

People demanded 4.2 million rooms in September, up 8.9 percent for an average occupancy of 77.6 percent occupancy statewide.

However, the apparent record occupancy percentage was primarily reflective of reduced hotel supply due to hotel conversions to condominiums and timeshare rather than a new record in room night sales.

Luxury and upscale hotel segments helped the industry achieve a 12 percent growth in room revenues to $2.09 billion for the first nine months ending September 2004, according to figures from Hospitality Advisors LLC.

This was the second highest level of room revenue recorded for the nine-month period, behind 2000 levels.

In comparison to the top 25 hotel markets in the U.S., Hawaii held the second highest occupancy behind New York City’s 80.0 percent.

Hawai‘i also had the second highest average daily rate and revenue per available room or “RevPAR” behind New York City at $151.13 and $119.70, respectively. The impressive economy and budget hotel performance was partly attributed to a strong Canadian market, which tend to favor more value-oriented hotels.