June Hotel Performance

Trends for 2024 continued into June with Maui dragging down the State’s performance. In terms of RevPAR, Oahu had a 5% increase while Maui was down 22%, Hawaii Island up slightly and Kauai registering a 6% increase. The RevPAR increases are mostly rate driven. More telling is that Maui’s total room revenue is down 25% from June of 2023. You don't need to be an economist to know that losing that much revenue is going to have adverse consequences for a long time.

First Half Hotel Performance

Year to date, the State’s RevPAR is down 2% relative to last year. Oahu is up 5%, Maui is down 12%, Hawaii Island is flat, and Kauai is up 4%. The gains are all rate driven. Erik Kloninger noted that Oahu was the top performing large U.S. lodging market during the first half of the year, with the highest RevPAR and ADR, and third highest occupancy. Oahu’s $227 RevPAR edged out runner up New York City’s $225, while Oahu’s $283 ADR topped NYC’s $278. Oahu’s 80.1% YTD occupancy trailed only NYC (81.0%) and Las Vegas (80.6%).

Air Seats

Relative to 2023, projected air seats for July through September are up 3% for the state. Honolulu leads with a 7% increase while Kahului is down 8%, Kona is down 4% and Lihue is up 5%. International seats are up 11% over last year but still 31% less than 2019. The total number of air seats to Hawaii is 3% less than 2019.

Visitor Arrivals

Total visitor arrivals for the first half of the year are down 4% over 2023. US and Canadian arrivals are each down 7%, while Japan is up 52%.

Visitor Spending

Total expenditures for the first half of the year were $10.3 billion which is 5% below 2023 and 16% above 2019. Maui visitor spending was down 24% YTD and 27% for the month of June. This appears to be the new normal for Maui.

Keep An Eye On The Yen

According to Reuters.com, on August 4th the yen is up 10% against the dollar in just over 3 weeks, driven in part of the Bank of Japan's large 15 basis point rate increase last week to 0.25%, alongside which it announced a plan to halve its monthly bond purchases over the next couple of years. The strengthening yen has a long way to go before Japanese travelers feel a Hawaii vacation is a bargain, but the BOJ move is a good first step. 

Investment Market Happenings

Host Hotels closed on the purchase of the 450-room Turtle Bay Resort from Blackstone. The hotel reopened as the Ritz-Carlton O'ahu, Turtle Bay. The purchase price was reported as $680 million net of key money, or $725 million gross. Interestingly, Marriott provided a large slice of key money and accepted the property without a PIP. The purchase also includes an entitled 49-acre parcel. Meanwhile, Blackstone sold an entitled 65-acre parcel for $43 million to Utah-based Wasatch Group who is partnered with the Arete Collective, and plans are underway to develop a 200-room residential project.