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Hotels vs. other means

LIHUE — Hotels might be more traditional, but other ways of crashing while on vacation are gaining ground.

A Hawaii vacation rental market study shows that alternative renting models continue to make inroads on hotels — and on Kauai, it’s about even on how visitors are choosing to overnight.

The study focused on 2013 as well as August and September of this year for the Hawaii Tourism Authority to determine the estimated number of vacation rental units in Hawaii being advertised individually on the Internet.

Vacation rentals, as identified by the study, include condominium units, vacation rental houses and bed and breakfasts. More than 22,000 lodging units are listed under those classifications.

That’s a lot of heads on beds not in a hotel.

“TVRs have clearly become a popular accommodation choice with beautiful homes located in resort neighborhoods,” Kauai County Economic Development Director George Costa said. “It is very difficult to monitor from a tax perspective because many are independently owned and marketed. Our challenge is to ensure that alternative accommodations are properly permitted and properly classified for real property tax purposes.”

Kauai had 3,614 individually advertised units in 2014, accounting for 7,466 estimated bedrooms and 19,481 estimated visitors that could be accommodated.

Costa said that, according to the Visitor Plant Inventory, Kauai’s mix is around 25 percent timeshare, 25 percent transient vacation rentals, 25 percent hotel and 25 percent condo mix — an even split across the board.

Statewide, meanwhile, there were 22,238 individually advertised units, 43,499 bedrooms and 117,607 estimated visitors that could be accommodated. It also said that if all 88,041 lodging units in the state were available at the same time, it would account for 25 percent of total inventory.

That, according to HTA CEO Ronald Williams, means the demand for alternative accommodations has grown rapidly. The study was initiated to help the state, counties and industry further understand the reach of this specific market segment. Williams said that hotels continue to be the accommodation of choice, but it’s a trend that can’t be overlooked.

“It will provide the counties with information to help them better understand this segment when making policy decisions in the future,” Williams said.

Others said the trend isn’t unique.

George Szigeti, CEO of the Hawaii Lodging and Tourism Association, said the study shows that Hawaii is consistent with major markets across the country. Various groups and the hoteliers are paying close attention to vacation rentals by owner, as well as bed and breakfast numbers.

“Alternative accommodations are on everyone’s radar right now,” he said.

On the one side, Szigeti said it is an acceptable reality that people may prefer alternative rentals. One size does not fit all, and there is a balance between luxury, family units with accommodations, and the urban Honolulu visitors versus the quieter neighbor island guests who want to experience the great outdoors or their mai tai by their own, seemingly secluded places in peace.

“That is what differentiates Hawaii as a sun, surf and sand destination,” Szigeti said.

The trend could affect the state’s pocketbook.

Hotels charge visitor fees that contribute to the general excise tax or transient accommodations tax. The state and counties could well be losing out on potential revenues from non-traditional housing that would otherwise come from hotels, condo associations and timeshares.

“Our lodging people are not looking to put anyone out of business but what we’re asking for is to put everyone on a level playing field,” Szigeti said. “Everyone should pay their fair share of the fees that come with accommodations.”

“We are changing the model all the time and this study is a great road map to look at,” he added. “There are a lot of challenges and people are trying to get their arms around this and do the right thing.”

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Tom LaVenture, staff writer, can be reached at 245-0424 or by emailing tlaventure@thegardenisland.com.

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