As more people return to the islands of Hawaii due to the easing of restrictions, statistics show that hotel rates are on the rise. After over two years of limited travel to Hawaii, people are less concerned about crowds and flying. According to the Honolulu Star-Advertiser, the highest average daily hotel rate among top tourist markets in the U.S. belongs to Hawaii for the first quarter of 2022.
In March alone, Hawaii had an occupancy rate that was ranked fifth in the country. Domestically, key performance measures show that Hawaii is one of the most in-demand places in the nation, according to data released by the Hawaii Tourism Authority. The only places that outpaced Hawaii were the cities of Phoenix, Miami, Orlando, and Tampa.
Hotels are seeing an influx of travelers despite Japanese tourists not being able to visit the islands because of the pandemic travel rules that are still in place. Before pandemic restrictions, Japan represented Hawaii’s third largest market. However, even without this market, Hawaii hotels are still on a roll.
According to Hawaii’s chief state economist, Eugene Tian, the state received an average of more than 25,000 passengers by air each day. While those aren’t as close pre pandemic numbers, the ones that are arriving are spending more. The Hawaii Department of Business, Economic Development and Tourism released data showing that in February 2022, individual visitors from western states spent $227 per day. That’s compared to just $157 per day in February of 2021, 44.7% higher after only one year.
While this leap in spending has certainly helped the economy of Hawaii, it’s still missing its largest foreign market, Japan. In 2019, 1.6 million visitors came from Japan, which made up 12.6% of the total visitor spending, according to the Hawaii Tourism Authority. If those numbers get back to where they were before travel restrictions were put in place, that will add another 4,000 to 5,000 passengers by air each day. In March 2022, those numbers averaged only around 250.
Nothing has officially been announced yet, but it’s expected that travel bans will be lifted soon for foreign countries such as Japan. That could bring Hawaii hotel room rates, which sit at $380 per night this year, even higher. The second highest average room rate in the country belongs to Miami at $311 per night, while Phoenix sits in third place at $198.
Part of the reason hotel room prices in Hawaii are so high is that there is a limited supply driving up the costs. Hawaii Aloha Travel’s Bruce Fishers says, “Normally there would be much more inventory available… and now they’re asking premium prices for the same thing that you would’ve gotten a lot cheaper before.” Even more, the costs will increase further for tourists with rental car and airplane gasoline prices on the rise.
Despite all these higher prices, Keith Vieira, principal of KV & Associates, Hospitality Consulting, says “We are seeing a demand curve with people who realize the value of travel and creating unique and memorable experiences, and are currently willing to pay for them.”
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