Short-term rental operators moving out of the Hawaii market

HONOLULU — The number of Hawaii properties listed as short-term vacation rentals has declined by as much as half compared with last year, which is likely the result of the pandemic and new restrictions on the industry.

The number of properties being used as vacation rentals has declined on all islands, Hawaii Public Radio reported Thursday.

Hotel operators were hit hard by the COVID-19 pandemic, with more than 75% of rooms across the islands empty in the normally busy month of December. Bookings for vacation rental properties were also down.

All of the state’s islands experienced occupancy decreases of at least 25% year-over-year from the 2019-2020 holiday season.

Erik Kloninger, a visitor industry analyst, said the City and County of Honolulu and Hawaii County posted the largest declines in vacation rental supply.

“Oahu had the biggest decrease at about 49%, half as many vacation rentals as 2019,” Kloninger said.

Hawaii island’s rental supply decreased about 43%, he said.

Maui and Kauai counties experienced contractions in vacation rentals of about 21% and 23%, respectively.

Economic forecasts predict Hawaii’s visitor industry will remain below 2019 levels for several years, with the short-term rental market likely to follow suit.

The higher rates of loss on Oahu and Hawaii Island were likely driven by government policies in conjunction with the pandemic, Kloninger said.

County officials on Oahu and Maui increased legal restrictions on short-term rentals and penalties for violators in 2018. The heightened constraints and penalties likely combined with the pandemic recession to produce the supply decrease.

Although fewer people have visited Hawaii since the pandemic began, their visits have lasted for longer periods of time.

The length of the stays could potentially skew the data on short-term rentals, which are gathered from property listings on booking platforms including Airbnb and Vrbo, Kloninger said.

Vacation rentals could also be occupied even without being listed on booking platforms.

“A particular house might have been removed from Airbnb or Vrbo, but there could very well be someone renting that house right now and they’re not staying there for a week, they’re staying there for three months or six months,” Klonginger said.

For most people, the coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some — especially older adults and people with existing health problems — it can cause more severe illness, including pneumonia, and death.

  1. Kauai Ken February 6, 2021 8:22 am Reply

    The crashing of the visitor infrastructure is a predictable, avoidable, and unfortunate outcome driven by local government. Our mayor first shut down the largest portion of the local economy and then picked the winners and losers Impacted by his isolationist policy, entirely favoring the multinational resorts over the locally owned and operated vacation rentals.

    Consider the results of his choices:

    1. Most visiting families prefer the vacation rental over the resorts as it gives them enough space to settle in for a week (or longer) with the ability to shop in local stores and farmer’s markets, all at much more affordable rates. This allows them to prepare some of their meals themselves instead of consuming their limited vacation budget on overpriced resort meals. This leaves more money to spend with all the local businesses that cater to visitors.

    2. Fewer Vacations Rental options translates to fewer families visiting. When faced with no option other than big resorts, many families will simply choose to spend their hard earned savings elsewhere, taking their contribution to the local economy and hefty contribution to the county taxes with them. If this sounds good to you (you simply despise tourists?) then without them you should get accustomed to your taxes rising, your government and healthcare services shrinking, and your children relocating to the mainland for opportunities that simply won’t exist on Kauai or elsewhere in Hawaii.

    3. The money spent at big resorts feeds the corporate owner, so much of the visitor income they absorb leaves Hawaii completely. The vacation rental income on the other hand is almost entirely spent on local property tax, GET and TAT taxes, association dues, and well compensated independent small businesses for housekeeping and other services. The vacation rentals feed jobs, livable wages and economic strength into the local economy.

    All this said, I am not condoning illegal vacation rentals or tax scofflaws. The county owes it to itself, it’s citizens, and the local businesses to root out these bad actors to address the nuisance they cause and help the legitimate small business recover and thrive. The county needs to reassess their policy regarding vacation rentals versus giant resorts to even the playing field, and step up to providing the government services and enforcement needed to restore a healthy economy, jobs, and community we ALL deserve.

    1. Pam February 7, 2021 9:12 am Reply

      All excellent points Ken. Thanks for the perspective.

    2. nobody February 8, 2021 7:18 am Reply

      Thanks Ken,

      Sad that most local residents don’t understand these basic economics you explain. The Tinker Bells of the world are moving here and we’re being forced out.

  2. Tinker bell February 6, 2021 2:59 pm Reply

    That’s awesome news….just made my day!

  3. WestKauai February 6, 2021 3:48 pm Reply

    Well said, Ken!

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