Please check out a interesting article from yesterdays Maui News.
Mahalo,
The Smith Team
Ken, Greg, and Jeremy R(S)
WAILEA – Showing little concern about lower room occupancy rates, Hawaii hoteliers raised their rack rates to a record $210 in July.
In Wailea, rates rose three times as fast. The South Maui golf and beach resort complex is on the verge of becoming the first destination resort in the islands to average $500 a night.
Mark Simon, director of marketing at the Four Seasons Wailea, says a loyal clientele of repeat visitors helps explain the extra-strong performance.
Rates were raised 4.6 percent statewide. Maui, which had the highest prices to begin with, raised its rates even more – by 7 percent to $294 a night.
“Over the years, Wailea has built up a loyal following. The Four Seasons, the Grand Wailea and the Kea Lani are very focused on quality,” he said.
It helps that owners have reinvested to keep the hotels – which are approaching 20 years old – sharp, he said.
Wendy Harvey, director of public relations at the Fairmont Kea Lani Resort, said Wailea is “idyllic, very desirable.”
Over the past three years, the Fairmont Kea Lani has often been in the 90-percent occupancy range. Its average prices already are more than $500, although Harvey points out that is not quite an apples-to-apples comparison with other resorts, since the Fairmont is all suites or villas.
The rack rate this year for a “moderate” suite has been $475, with the next larger suites priced at $575.
Wailea, far and away the most expensive resort in the islands, lifted its rates by nearly $60 a night to an average of $489.
No destination resort in Hawaii has ever averaged $500 a night, though individual resort hotels such as the Fairmont have done so.
The statistics are collected by Smith Travel Research for Hospitality Advisors. Its president, Joseph Toy, said: “While down from 2006, Hawaii nonetheless enjoyed a strong 81 percent occupancy, which actually was stronger than expected based on the booking pace a couple of months ago.
“With booking windows so short due to the economic downturn, we will likely continue to see increasing late bookings for travel to Hawaii that has characterized prior soft periods.”
Soft is a relative term. Some general managers consider a hotel is “full” when the occupancy rate is consistently at 80 percent. Being more full than that begins to create operational problems after a time.
Maui’s occupancy rate has not been over 80 percent every month this year, but it has been close. It was 81.8 percent in July, down from 85.1 percent the year before.
Wailea prices may have discouraged a few, as occupancy there fell from 82.1 percent to 75.7 percent.
The Renaissance Wailea Beach Resort, one of the two original Wailea resorts, closed this week for rebuilding, taking 345 rooms off the slate. It will reopen as a 193-room Baccarat “superpremium” resort, but not until 2010.
In West Maui, operators were much more restrained in their price increases: a mere $7 to an average $272. Occupancy there stayed higher, falling only slightly from 88.7 percent to 87.3 percent.
The rest of Maui – made up mostly of Kihei – was in between. Prices were pushed up by $32 (11 percent) to $321. Occupancy declined from 81 percent to 76.2 percent.
Hospitality Advisors reported that occupancy rates declined somewhat faster than prices rose. Room usage was down 5.7 percentage points to 81 percent.
Occupancy took the biggest hit on Oahu, where it dropped 10 points to 81.5 percent. However, July 2006 had been at an extraordinary 91.4 percent, a figure seldom seen since the hectic days of the late 1980s.
Honolulu operators barely raised rates, just $5 a night to $171.
As a result, they took a big hit in overall income. RevPAR (revenue per available room) tumbled $12 to $140.
Maui’s RevPAR, on the other hand, rose $6 to $241.
Kauai bucked all trends by raising rates (by $10 to $216) while also boosting occupancy from 80.6 percent to 86.2 percent. That pumped up RevPAR by $20 a night to $186.
Hawaii County continued to trail the rest. Occupancy fell 1.8 percentage points to 75.4 percent. Room rates rose $7 to $203 and RevPAR was up $2 to $153.
The Kohala Coast has started falling behind. When Smith Travel began breaking out of the top level of resorts, Kohala was second to Wailea, though about $100 a night behind.
In July, it was $200 behind Wailea and, at $298, well behind “other Maui’s” $320.
Although Kohala’s average room rate was more than $25 higher than West Maui’s, West Maui enjoyed higher RevPAR, $237 vs. $225.
West Maui, however, is in transition, with two resort hotels at Kapalua closed. The Kapalua Bay Hotel is being replaced while the Ritz-Carlton Kapalua is undergoing a $95 million renovation that will cut out about 80 rooms.
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