Even in these times of rising fuel and transportation costs, there's no trouble in paradise.
According to a mid-year report by the Hospitality Services Group of Ernst & Young LLP, strong demand from vacation travelers, combined with a decreasing supply of hotel rooms, continue to make Hawaii one of the more desired vacation destinations in the world. The report said the Aloha State outpaced the rest of the United States as the best performing hotel sector in the first six months of 2005.
Hotel occupancy in the four major Hawaiian hotel markets of Oahu, the Big Island, Maui and Kauai, according to the report, increased 4.5 percent in the first six months of '05 compared to the first six months of '04. Over the same period, average daily room rates increased 6.8 percent, according to data supplied by Smith Travel Research. During the same period, occupancy increased 2.8 percent and ADR rose 4.8 percent throughout the U.S. lodging market as a whole.
Based on that performance in the first six months, Ernst & Young predicted the hotel market in Hawaii, which includes some of the world's best-known golf resorts, will continue to grow into 2006. Hawaii's tourism is also strengthened by foreign tourists because of the continuing weakness of the U.S. dollar.
"This is a tremendously robust hotel market. Hawaii is enjoying its strongest economy since the early 1990s, and is seeing significant increases in vacation travel to the islands," said Michael Fishbin, national director of the Hospitality Services Group of Ernst & Young LLP. "With a projected increase in air travel to the islands next year and a rapidly expanding cruise industry, we see no signs of diminishing performance in the local hospitality market."
Fishbin said this belief is based in large part on continued strong performance in the local economy as well as a projected increase of more than 10 percent in tourist visits this summer over the summer of '04.
"Kauai's visitor industry and real estate market have reached new heights the past few years. Experiencing the incredible natural beauty with its large diversity of activities is something Kauai and the other Hawaiian Islands can deliver for visitors year-round," Sue Kanoho, executive director of the Kauai Visitors Bureau, told PGA.com. "With the investment made toward the seven golf courses on Kauai, we've been looking to increase the awareness and desire to play golf while visiting our island."
PGA Professional Gary Planos, senior vice president/resort operations for Kapalua Land Co., which owns and operates Maui's famed Kapalua resort, said savvy marketing in the western United States, particularly California, Arizona and Texas, has helped keep Hawaii's tourist economy on top over the years.
"Our weather year-round is unmatched," Planos told PGA.com. "We rarely get into the 90s and rarely is it below 70. This goes from January to December. Of course we've got great winters compared to the mainland, but our summers are just that much better. You just don't have the hot, humid days because you almost always have the trade winds blowing that cools things off."
About all that heats up these days, Planos said, are the hotel occupancy rates. Time was when the summer months in Hawaii were slow in regard to tourist traffic. That's not the case anymore.
"When I started working here in the mid '70s, there was practically zero summer business," Planos said. "Your starting [tee] times could barely cover the mornings. The afternoons were a ghost town. As an employee in golf operations, we played every afternoon. Now we're pretty well full.
"The summer really is the big difference -- June, July and August are unbelievable months now," he added. "Occupancies frequently get into the 90s [percent]. September used to be pathetic, with occupancies in the 20-30 percent range. This month there have been days and even weeks where we've been sold out."
There is, however, a caveat to all this -- the rising cost of oil. Because of such factors as Hurricanes Katrina and Rita hitting refineries in the Gulf of Mexico, many experts say the price of a barrel of crude oil could reach between $80 and $100 in the next couple of years.
That scenario could impact people's discretionary money to take vacations to faraway destinations such as Hawaii, as well as the price of airline transportation for the flight over the Pacific. But that's a scenario Planos and other Hawaii resort and tourist executives have lived with for years.
Tourist officials for the state of Hawaii, Planos said, are consistently talking to the airlines to gauge the future.
"We're tied at the hips with the airlines," Planos said. "Delta and Northwest are struggling now; we're aware of what they're going through. We have some risk there. But there's no shortage of rental cars being seen on the island or being utilized on the island."
And given the Ernst & Young report, there won't be any time soon.
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