Hawaii hotel performance was up in December but the outlook for international business still not favorable

Don’t Bury the Lede: Investment Market Happenings

In one of the Hawaii’s biggest resort land transactions, Powell & Aucello represented NewAge Ko Olina, an affiliate of Kam Sang Company, in the $177 million acquisition of two prime oceanfront lots at Ko Olina Resort on Oʻahu in a deal that closed in mid-January.

Arrivals and Spending – Month of December

Arrivals for the state were up 6%, with Oahu up 5%, Maui up 15% (compared to post wildfire data) while Kauai and Hawaii Island were both flat. Expenditures were up 5% overall with Oahu down 1%, Kauai down 9% and Hawaii Island up 9%.

Arrivals and Spending – Full Year 2024

Total visitor arrivals for 2024 were essentially equal to 2023. Arrivals were up 4% on Oahu, but down 4% on Kauai, 3% on Hawaii Island and 6% on Maui. Expenditures were also equal to 2023 with Oahu up 3%, Kauai up 2%, Hawaii Island up 6% and Maui down 9%.

Air Seats – December

December air seats to the state were up 6%, Honolulu was up 8%, Lihue was up 11% and Kona was down 3%. International seats were down 5% as most east bound markets saw decreases including Japan which decreased by 5% which is part of a troubling trend. 

Air Seats – Full Year 2024

Total air seats to the state for 2024 were up 1%, Honolulu was up 7%, Lihue was up 1%, Maui was down 13% and Kona was down 4%. International seats were up 10% driven by Japan being up 30% over 2023. However, the recent trends for international seats are not postive. 

Air Seats – Outlook

Looking at the next three months, the state should have 1% more seats than a year ago with Honolulu up 1%, Lihue up 3% and Kona flat. Maui is running 5% below 2019. International seats are forecast to be down 10% as carriers from Japan are forecast to be down 15%. Domestic seats are forecast to increase to all of the islands resulting in a a 4% increase in total. 

Hotel Performance – Month of December

Total revenue was up 1% for the month of December which reversed a trend of the previous three months. Oahu led the way with a 2% increase in RevPAR from a combination of slight gains in rate and occupancy. In terms of RevPAR, Maui and Hawaii Island were flat while Kauai had a 6% drop. The Lahaina/Ka’anapali/Kapalua market is still holding Maui down. 

Hotel Performance – Full Year 2024

For 2024, RevPAR was down 5% driven by a combination of occupancy and rate declines. Oahu is up 1% for the year despite the poor performance during three of the last four months. Hawaii Island was down 2% and the island of Kauai is down 1%. The neighbor islands all have lower occupancy than in 2023. Maui is still suffering with room revenue down by 15% compared with 2023 and 22% compared with 2022 (before the wildfires).

ALIS 2025 Takeaways

At this year’s ALIS conference we noted a slightly brighter outlook. Opportunities for hoteliers cited include potential corporate tax cuts and a more business-friendly regulatory environment tempered by overall higher costs, thinner profit margins and a possibly tighter labor market. RevPAR growth for 2025 should be slightly lower than last year at 1.6%. On the investment side there is hope as some attendees have seen a narrowing of the bid-ask spread. Some cited debt markets opening. Though there were less investment offerings than hoped for there was more than the last few years.

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Our friend and sometime collaborator Dan Wacksman of consultancy Sassato recently launched the Hawaii Hotel Hui Insider. Check it out at: http://HawaiiHotelHui.com