Record hotel rates for Honolulu visitors

HONOLULU — Visitors to Hawaii are paying record-high hotel rates despite a sharp drop in hotel occupancy this year. The softening has prompted many hotels to offer deals and incentives — from complimentary surfboard rentals to free room upgrades — months before they normally do.

State tourism liaison Marsha Wienert said such specials are traditionally offered during the spring, or the so-called "shoulder" period, but hotels started advertising them as early as mid-January this year. She said Hawaii tourists can expect "added value," such as a fifth night free, a meal or an activity.

The cooling comes after 2 1/2 robust years for the hotel industry, which has benefited from Americans leery of traveling abroad.

"Everybody realized over the past couple years that this is a phenomenon and there was going to be a right-sizing occurring within the marketplace. It was a matter of when," Wienert said.

Hotel occupancy in Hawaii fell to 77 percent for the first two months of the year compared with 84 percent for the same period in 2006, according to the latest report by Hospitality Advisors LLC.

The statewide average rate, however, surged 8 percent to $201, which is among the highest in the nation.

In February, revenue per available room, a key industry measure known as "RevPar," dipped 3 percent to $161, the first decline since August 2002.

"On a 10-year basis, we're having a perfectly fine first quarter. We're just a little disappointed because the previous two years were so hot," said Barry Wallace, executive vice president of hospitality at Outrigger Enterprises, which manages 30 properties statewide.

Outrigger, like other chains, often sets rates for its 9,000 rooms in Hawaii a year in advance for wholesalers. So adjusting the rates is not as simple as a highway motel changing the sign and turning on the "vacancy" light.

Wallace said the company is engaging in selective discounting to certain segments, such as Hawaii residents, in hopes of a short-term boost.

Hyatt, which operates three resorts in Hawaii, is also trying to stimulate some short-term activity by offering spring packages that include complimentary room upgrades, free breakfast or tickets to a luau show.

"We deploy them when we see little pockets where we need some help," said Frank Lavey, vice president and managing director of the Hyatt Regency Maui Resort & Spa. "The second quarter has not improved as much as we had hoped it would, but it's certainly more promising than the first one was."