OTAs & Taxes

Aloha Kakou:



We've talked before about the hotel tax dilemma with which some OTA's (Online Travel Agencies) have been dealing.

This article, entitled "OTAs Give Up Selling Hotels Where Taxed" from Travel Weekly, points out that hotels in certain cities are no longer represented on OTA websites when those cities insist on collecting their equivalent of the TAT (Transient Accommodations Tax).

Could that happen here? There was a time when the Hawaii state legislature was mulling the idea of collecting the TAT on difference between the OTA's net rate and the rate for which the room was ultimately sold.

Given Hawaii's usual budget balancing act of increasing taxes while not decreasing spending, I wouldn't be surprised to see this come up again soon.

Value Value Value

Aloha Kakou:

This year, it seems there are more stories than ever about different destinations. The one thing they have in common, though, is that they are all touting "value".

While the Outrigger Maui Eldorado has always been and continues to be a good value for both Kaanapali and Maui, that message may have a harder time finding sympathetic ears in the torrent of stories and locations shouting their new value message.

http://www.foxnews.com/story/0,2933,521960,00.html
http://www.msnbc.msn.com/id/30947847/
http://www.msnbc.msn.com/id/30965969/
http://www.cnn.com/2009/TRAVEL/05/26/mexico.tourism.recovery/index.html

Tourism Drought

Aloha Kakou:

Please see this article from yesterday's Star-Bulletin about hotel occupancies and Hawaii's tourism business climate. There are several quotes from David Carey, president and chief executive of Outrigger Enterprises Group, regarding the current rate and occupancy scenario.

"I'm not real optimistic that we'll see any improvement soon," Carey said. "There is tremendous profit-margin erosion."

http://www.starbulletin.com/business/20090528_Tourism_drought.html

April Counts Down

Aloha Kakou:

April's visitor count was about 9.4 percent this April, compared to April, 2008.

Additionally, with the cuts in hotel rates, visitor spending was down $26 per day, to $160.

http://mauinews.com/page/content.detail/id/519024.html?nav=10

More Regarding Stacking

Aloha Kakou:

These two articles from today's Maui News explain more about the proposed zoning stacking changes.

The first article, about the proposed changes to the industrial area zoning, is useful as it explains how stacking works. The second article talks about the hotel area zoning stacking.

Quotes from the article on hotel zone stacking:

"The planning department is firmly against tampering with the apartment provision. Administrative planning officer Joe Alueta said there were more than 5,000 apartments in the hotel zone. Turning those into nonconforming uses would be problematic."

"However, the commissioners agreed about advising the council to leave the apartments alone, although no vote was taken on that."

http://mauinews.com/page/content.detail/id/518970.html?nav=10

http://mauinews.com/page/content.detail/id/518971.html?nav=10

Low Occupancy Means Great Deals

Aloha Kakou:

Hawaii hotels are offering a plethora of deals these days to entice visitors.

Discounts abound and "value adds" are plentiful - see this Honolulu Advertiser article for some of the more interesting ones!

http://www.honoluluadvertiser.com/article/20090526/BREAKING03/90526025

Testify

Aloha Kakou:

This morning, I appeared before the Maui County Planning Commission and testified against the proposed bill to amend the county zoning ordinance that proposes to eliminate "stacking" in hotel-zoned districts.

I appeared on behalf of both my employees and the Outrigger Maui Eldorado unit owners. Should this bill become law, all non-hotel use properties (such as the Maui Eldorado) would become nonconforming. I'm sure I don't have to tell you what difficulties this might create for our owners should the property be adversely affected by any kind of disaster. Additionally, this bill would create limits on remodeling units and even on unit usage.

As far as I could tell, I was the only person specifically representing Maui Eldorado owners at the meeting. I have said previously that I view our relationship as that of partners. I felt it was critical that our collective voice be heard on this zoning bill. The next time anyone else asks you what Outrigger has done for you lately, ask them where their rental manager was on this issue.

"Every Dollar Is Crucial"

Aloha Kakou:

Please see this story that appeared on KHNL regarding the new higher TAT. David Carey, CEO of Outrigger Enterprises, speaks to Outrigger's position on the current reality of tourism:

http://www.khnl.com/global/video/flash/popupplayer.asp?ClipID1=3754057&h1=Higher%20hotel%20taxes%20could%20mean%20fewer%20visitors&vt1=v&at1=News&d1=143133&LaunchPageAdTag=News&activePane=info&rnd=44343789

Potentially Nonconforming

Aloha Kakou:

The Maui County Council's Planning Committee is proposing a bill that will remove the provision to allow residential and commercial uses in areas zoned for hotels.

Should this proposed bill be passed as is, it will have a huge potential impact on the Maui Eldorado, an impact that will not be positive. Carol Reimann, the Executive Director of the Maui Hotel and Lodging Association, has developed the talking points document (below) and has written a letter to MHLA members on the subject (even further below).

I plan on attending this meeting next Tuesday; if you are at all concerned about this potential change, you may wish to attend or be sure that someone is attending on your behalf.

http://mauinews.com/page/content.detail/id/518718.html


051109 HotelStacking.TalkingPoints

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Letter to Members Re Stacking 5-11-09

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Only Third Worst?

Aloha Kakou:

A recent survey by GMAC insurance ranks Hawaii drivers 48th in the nation when it comes to knowing the rules of the road.

Based on most driver's behaviors, I would have guessed we were the worst!

http://www.honoluluadvertiser.com/apps/pbcs.dll/artikkel?Dato=20090520&Kategori=BREAKING01&Lopenr=90520025&Ref=AR&Show=0
http://www.starbulletin.com/news/breaking/45525107.html

Maui Deals In The News

Aloha Kakou:

Money Magazine listed Maui in the number 1 position on it's list of 10 great last minute summer getaways.

At resorts, "there are discounts like I've never seen," says Judi Chaitman of Great Getaways Travel.

http://money.cnn.com/galleries/2009/moneymag/0905/gallery.summer_travel.moneymag/index.html

Japanese Visitors Decline Due To Swine Flu Fears

Aloha Kakou:

Japanese visitors are cancelling their Hawaii vacations at "concerning" rate over Swine Flu fears.

Beginning May 10, Honolulu began experiencing a 25% daily decline in the number of visitors from Japan.

Maui's Japanese visitors make up only five to six percent of our total arrivals, so the outlook may not be so grim for the Valley Isle.

http://www.honoluluadvertiser.com/article/20090519/NEWS15/905190341

Never Say Never

Aloha Kakou:

How would you feel about paying for your plane ticket based on the combined weight of you and your luggage?

Weight is the factor by which air cargo carriers base their fees. The way we're treated as airline passengers these days, being treated as cargo might be a step up!

http://www.chicagotribune.com/travel/chi-tc-trav-weigh-fare-0512-0517may17,0,7887352.story

Visitors May Not Be Up For TAT Increase

Aloha Kakou:

Despite staying in a property that has just undergone a $100 million renovation, and getting a 50% discount rate, these guests are scrutinizing every expense of their vacations.

“We would come back,” said Judy Becker, a guest at the Outrigger Reef on the Beach, “but if one thing goes up, something has to give.”

That pretty much sums it up - guests are looking at every expense and cost.

We've drastically lowered our rates for the remainder of 2009. The other part of the equation is whether guests will see a stay in your unit as a good value for their dollar.

http://pacific.bizjournals.com/pacific/stories/2009/05/18/story3.html?b=1242619200^1829759

The Bottom?

Aloha Kakou:

The chief staff executive for the Realtors Association of Maui, Terry Tolman said Maui's real estate market "seems to be at or near the bottom". Tolman also and noted that the inventory for single-family homes, condos and land lots is at its lowest level in recent months.

http://www.starbulletin.com/business/20090514_Maui_realty_nose-dives.html

No Good News On The Tourism Front

Aloha Kakou:

The Maui News reported today that a University of Hawaii Economic Research Organization (UHERO) report forecasts "a long and deep downturn for the Hawaii visitor industry".

The UHERO report mentions that the falloff in visitors will stabilize later this year, but will see only modest recovery in 2010-11.

http://mauinews.com/page/content.detail/id/518545.html?nav=10

Blue Sky Tours Deals

Aloha Kakou:

Blue Sky Tours, one of our wholesale partners, has updated their Hot Deals page to include the Outrigger Maui Eldorado. Our new, lower rates have obviously had a positive impact!

http://www.blueskytours.com/HotDeals.html

TAT Increase

Aloha Kakou:

The Hawaii state legislature voted to overturn Governor Lingle's veto of several tax bills, including an increase in the TAT (Transient Accommodations Tax). As of July 1, 2009, the TAT on hotel rooms will increase by 1% to 8.25%. The bill provides for another 1% increase on July 1, 2010.

http://www.starbulletin.com/news/20090509_Lingle_warns_of_job_losses.html

Property Tax Rates To Remain The Same

Aloha Kakou:

The Maui County Council has decided to keep property tax rates at their current level for the next year.

The current rates are:

* Homeowner: $2 (per $1,000 of the property's assessed value).
* Apartment: $4.55.
* Improved residential: $4.85.
* Unimproved residential: $5.35.
* Commercial: $6.25.
* Industrial: $6.50.
* Agricultural: $4.50.
* Conservation: $4.75.
* Hotel/resort: $8.20.
* Time share: $14.

http://mauinews.com/page/content.detail/id/518504.html?nav=10

Your Bed Does Make The Difference

Aloha Kakou:

Still have an old mattress? If your mattress and box spring are any color other than white or if they are older than five years, they're too old.

"The additional investment in having good quality bedding products as opposed to mediocre stuff is not that big of an additional investment and it pays back big time in terms of guest satisfaction.” - Stephen Palmer, co-owner of United Feather & Down.

Talk to Leamar about updating your bedding today!

http://lodgingmagazine.com/ME2/dirsect.asp?sid=123F5E7260F24D248B60F2A6F9C1D078&nm=Operations

PDX-OGG

Aloha Kakou:

Alaska Airlines will be starting nonstop service between Portland, OR and Kahului on July 3. The flights will operate three times per week. Originally the flights were to have begun on August 7, so someone at Alaska Air must be optimistic about the Maui travel market.

http://www.bizjournals.com/portland/stories/2009/05/04/daily28.html?ana=from_rss

Marc Resorts Shuts Operations

Aloha Kakou:

In another sign of the times, Marc Resorts, a small resort management company that many years ago had an operation here at the Maui Eldorado, closed it's operations on Molokai and Kauai this last week.

http://mauinews.com/page/content.detail/id/518273.html?nav=10

Canada Travel Mention

Aloha Kakou:

TravelAlerts.ca is a Canadian travel bargain newsletter. The Outrigger Maui Eldorado is mentioned in the most recent edition - please see the link below.


US$125per night
Save 40% on stays at Maui hotel with private beachSource: BookIt.com

Hawaii Group Cancellations

Aloha Kakou:

The fallout from the AIG travel debacles continue to plague Hawaii reservations, as per this article in today's Star-Bulletin.

This is relevant to us as many times MCI (meeting, convention and incentive) travellers also book add-on trips to neighbor islands, particularly Maui. Hawaii is a destination that has one of the largest number of family members traveling in conjunction with MCI travel.

Hawaii MCI travel has been been seen as somewhat of a boondoggle as those Mainlanders who hold the purse strings wrongly believe that no one does any business over here anyway. That coupled with the perceived expense of a Hawaii trip means that we are fortunate to get as much business as we do.

Unfortunately, today's political climate now means even less of this important subset of Hawaii's travel business.

http://www.starbulletin.com/business/businessnews/20090507_cancellation_blues.html

Potential TAT Increase

Aloha Kakou:

Please take a look at this article, written by Dr. Richard Kelley, Outrigger's Chairman of the Board. Dr. Kelley continues to be a tireless advocate for Hawaii tourism.

Currently, the Hawaii state legislature is looking at increasing the Transient Accommodations Tax to 8.25% in July and to 9.25% in 2010 in an effort to balance the state budget. Of course, Dr. Kelley believes an increase in the TAT is a bad idea.

http://mauinews.com/page/content.detail/id/518181.html?nav=18

Here is the link to the tourism study referenced by Dr. Kelley:

http://www.fhb.com/pdf/FHB_Tourism_Study_09325.pdf

A Fast Train Headed The Wrong Way

Aloha Kakou:

The headline of this article that appeared yesterday in the Maui News is hardly comforting. The reality of the article is hardly comforting, either.

"With a very weak first quarter and indications that the drop-off has continued Into April, I'd have to think that we'll be looking at a very soft summer," he said. "I think it will be mid-2010 before we see a sustained uptick", said Joseph Toy of Hospitality Advisers.

Maui's March occupancy average was 66.9%, compared to 80.3% last year. Remember that hotel occupancy levels include timeshares, which traditionally run over 90% due to those owners' need to come to maximize their investment.

http://mauinews.com/page/content.detail/id/518139.html?nav=10

Aloha Happy Tours

Aloha Kakou:

This article appeared in this week's Travel Weekly. Happy Tours had been in business for over 40 years and had been associated with Outrigger for almost as long. It is sad to see a venerable member of the wholesale travel community close so suddenly. Fortunately, the Outrigger Maui Eldorado has contracts with many wholesale partners who continue to send vacation travelers our way.
Http

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The Perils of Booking Online

Aloha Kakou:

This article from the Honolulu Star-Bulletin details the scams that befell a family who booked their Hawaii accommodations through an on-line vacation website, paid in advance and arrived to find there were no such accommodations.

This is why your relationship with Outrigger is so valuable - you and your guests are dealing with a reputable company that does not require an advance payment.

http://www.starbulletin.com/business/20090426_Bait_and_switch.html

Vacation Agent Magazine Ad

Aloha Kakou:

This co-op ad with the Outrigger Maui Eldorado and Blue Sky Tours will appear in the May issue of Vacation Agent magazine, where it will be seen by over 31,000 travel agents whose primary business is to sell leisure travel.

The ad will actually appear in realistic four-color ink; it just won't upload with the right colors!

Jaxfax Article

Aloha Kakou:

Several months ago, Chantal Guillou-Brennan stayed with us at the Outrigger Maui Eldorado Resort. Ms. Guillou-Brennan, who is the Art and Production Manager for Jaxfax, a travel marketing magazine aimed at the travel agency community, was on assignment to write about Maui. Below is the mention of the Outrigger Maui Eldorado mention that we received in exchange for her stay.



jaxfax maui 1

Publish at Scribd or explore others: Magazines & Newspape outrigger maui eldor

jaxfax maui 2

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