Discount Hotel Rooms Dwindling In Hawaii

By Author: Steve Robinson
Total Articles: 468
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People who like to travel via cheap travel options such as cheap airplane tickets, discount hotel rooms, discount travel packages, and cheap vacation packages are finding visiting Hawaii increasingly expensive.

Average Hawaiian hotel room rates in January cost $231 a night which was 12 percent more than in 2012 and 30 percent higher in than 2010 when the average price was $177. Cheap lodging is becoming harder to find particularly in once modestly priced Waikiki.

Oahu Island’s average room rate was $210 in January, an increase of more than 15 percent and the country’s second most expensive average room rate, behind Miami’s daily rate of $211. Oahu witnessed the largest increase in average hotel rates in 2012 of the top 25 U.S. hotel markets.

Waikiki, which traditional has been the easiest place to find cheap rates thanks to its numerous motels, is experiencing the steepest growth in room rates. Rates have been on the upswing as its beachfront area goes increasing upscale and many of its cheaper lodgings have been torn down or renovated and converted into upscale hotels.

Another factor driving ...
... higher prices is that Hawaii’s tourism is growing after having to deal with the recession and Japan’s earthquake and tsunami which reduced visitor count from one the islands’ best markets. Airlines have been adding flights and launching service to new markets such as China.

Waikiki is home to 27 properties classified as “budget” vs. 33 seven years ago. In some instances budget hotels have been torn down and replaced with condominiums. In many cases millions of dollars have been spent on transforming budget hotels into high end properties.

Three years ago a Courtyard by Marriott opened in what had been an older budget hotel located two blocks from Waikiki Beach. In February the least expensive Courtyard room cost $269 if paid in advance. Otherwise it cost $299.

In 2012 Hawaii filled 77 percent of its hotel rooms, with Oahu filling 85 percent of its rooms. Occupancy rates are expected to increase by around 3 percent both statewide and in Oahu.

America is Hawaii’s largest source of tourists. Recently airline capacity from the 12 Western states is back to peak levels whereas it is about 60 percent back for the rest of the country.

Hawaii is drawing more visitors from new non-stop flights from mid-sized U.S. markets such as Fresno, CA, and Bellingham, WA, as well as new direct service from China.

In the past 10 years over $3 billion has been invested in Hawaiian hotels and retail properties. This investment has taken place not only in the prime beachfront properties but also secondary areas such as Waikiki’s Khios Avenue. This street is going upscale with a developer announcing plans to build a 32 story Ritz-Carlton Residence on Khios Ave, and Hilton Worldwide adding two time share towers there.

$2.5 billion in new projects have been approved for Waikiki and expected to be completed over the next five years with another $1 billion in planning stages.
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