Hotel occupancy
dive deepens

October was the 18th straight
month with less business

By Russ Lynch
Star-Bulletin

Occupancy in Hawaii's hotels and resort condominiums slipped below 70 percent last month, making it the worst October on record since 1983 and an unprecedented 18th month in row in which occupancy was lower than the year-earlier month.

Statewide occupancy was 69.9 percent last month, down from 70.9 percent in October 1997. Waikiki was particularly hard hit, with rooms 69.4 percent full compared with 75.5 percent in the year-earlier month, according to the latest monthly report from the consulting firm PKF-Hawaii Inc.

The news wasn't all bad for hotels, with Maui and the Big Island showing occupancy increases and room rates averaging higher across the state.

Ernie Watari, PKF-Hawaii chairman and chief executive, said that the rate of decline in occupancy slowed a little -- a 1.4 percent drop from October 1997 compared with a 5.1 percent September-to-September decrease and a 3.6 percent August-to-August drop.

But Watari said the new Hawaii Tourism Authority will have to work hard to reverse the negative trend.

The statewide average daily room rate for October was up 2.6 percent at $134.31, from $130.90 in the previous October.

The full-service beachfront hotels in Waikiki, which have some of the highest room rates in the state, saw their occupancy slip to 71.1 percent last month, from 76.9 percent in October 1997. That decline came in spite of lower room rates, which averaged $153.48 in the beachfront hotels last month, down 1.1 percent from $155.12 in the year-earlier month.

The cheapest properties in Waikiki, the off-beach hotels and condominiums with no restaurants of their own, also slipped in both occupancy and room revenues. They averaged 62.5 percent occupancy last month, compared with 67.1 percent in October 1997; their average October room rate was $58.13, down 3.2 percent from $60.03.

Occupancy on Kauai slipped to 70.4 percent, from 77.1 percent a year earlier, but Kauai raised its average room rate 2.3 percent to $151.68, from $148.33. Molokai's occupancy was 39.4 percent, down from 40.6 percent, and Molokai rooms averaged $72.84 a night, down 2.7 percent from $74.85 in the year-earlier month.

The state's bright spot was the Kohala Coast of the Big Island, where occupancy rose to 65.2 percent from 53.8 percent and the average room rate rose 6.8 percent to $191.94, from $179.79. Occupancy for the Big Island as a whole was 66.3 percent, up from 58.7 percent, and the island's average room rate was $144.82, up 7.8 percent from $134.30.

Maui had an average occupancy of 76 percent, up from 70.3 percent in October 1997, and the island's average room rate of $146.69 last month was up 2.2 percent from $143.53.

In the October survey, PKF studied activity at 81 hotels and 62 resort condominium properties with a total of 40,033 rooms, or 56 percent of the available rooms in Hawaii.

Occupancy in the hotels was slightly better than in the resort condominiums.