The Hawaii Tourism Authority’s December 2023 hotel performance report included full-year statistics. Despite struggles to maintain occupancy rates last year, average Hawaii hotel rates increased in 2023 when compared to 2022 and remain well above 2019 figures.
Throughout 2023, Hawaii struggled with dipping occupancy rates. This was especially true at the beginning of the year, with softer demand all around. The devastating wildfires on Maui in August didn’t help, though they artificially boosted occupancy rates as hotels in West Maui became homes for displaced residents, volunteers, and recovery officials. However, despite the chaos of the year, average Hawaii hotel rates increased in 2023, maintaining Hawaii’s crown as the most expensive hotel market in the U.S.
Average Hawaii Hotel Rates Increased in 2023
Occupancy rates yoyoed a lot last year but ended, on average, 1.2% higher than in 2022 at 74.7%, though that is still 6.1% lower than in 2019. To combat the rocky occupancy rates, prices dipped here and there. However, the dips weren’t large enough and didn’t last long enough to cause an overall decrease. In fact, average Hawaii hotel rates increased in 2023 by 1.3% compared to 2022 to $378/night, which is a whopping 33.4% higher than pre-pandemic. These figures helped to keep revenue per available room (RevPAR) 23.3% higher than it was in 2019, at $282. By the way, that’s 1.9% higher than 2022’s RevPAR.
So, how does Hawaii compare to other pricy markets in the U.S.? Well, our average daily rate (ADR) was $77/night higher than New York and $154/night higher than Boston – two traditionally pricey markets. This made Hawaii the single most expensive hotel market in the U.S. by a wide margin. It’s also why we ranked third in occupancy rate, behind New York at 81.6% and Las Vegas at 77.9%.
Looking at other famous “sun and sea” locations, Hawaii continued to lag behind more idyllic locations, such as French Polynesia and the Maldives, which had average daily rates of $840 and $582, respectively. Of course, because Hawaii’s lodging market varies so much based on location, it’s crucial to drill down to gain a clearer picture.
You see, Maui’s ADR was WAY higher than the rest of the state last year at $591. Hawaii Island and Kauai trailed at $427 and $420, respectively. Like always, Oahu was the cheapest island to stay on, with a 2023 ADR of $282. It’s worth noting that all markets in Hawaii experienced an ADR increase in 2023, except for Maui, which saw prices decline by 2% when compared to 2022. Hawaii island jumped saw its ADR increase by 2.8% last year, Kauai jumped by 6.7%, and Oahu went up by 5.7%.
Of all the islands, Oahu was, as always, the one that had the highest occupancy rates at 79.6%, beating out Las Vegas in the U.S. and Fiji for sun and sea destinations, which came in at 76.4%. Oahu’s occupancy rate represents a 4% increase over 2022 and was the only county in Hawaii to see occupancy growth. Kauai came in second in the state at 74.6% (a 2.6% decrease), followed by Hawaii Island at 70.2% (a 3.7% decrease), and Maui at 66.1% (a 1.6% decrease). Maui’s drop isn’t surprising, even without the fire, as they’ve been on a downward trajectory even before the fire because of their insane rates.
For example, in December 2023, Wailea’s ADR was at an astonishing $1,140, which is 10% below December 2022 but 28.2% higher than December 2019, and their occupancy was awful at just 55.5%. And, remember, Maui’s visitor arrivals were at nearly pre-fire levels in December.
Final Thoughts
While it’s true that average Hawaii hotel rates increased in 2023, the data shows us that there’s more to it than that. As always, each island had its own averages. And while Oahu had the second-highest increase in the islands, it also remains the most affordable island to visit. Of course, we know these rate increases, along with unfavorable exchange rates, are why Japanese demand remains at 50% below 2019 levels.