Hawaii January Numbers Up But Not Enough

Aloha Kakou:

While occupancy and ADR for the state rose almost 10% in January compared to last year, those increases are not sufficient to return state hotels to profitability.

Price recovery for Hawaii's hotel industry is still another two or three years away.

"In the last few dollars of ADR lies almost all the profit," said Barry Wallace, executive vice president of hospitality services for Outrigger Enterprises. "The vast majority of ADR pays for employees and taxes. Profit is the final dollar or two, and that's the dollar that isn't there. Many Hawaii hoteliers can't pay the mortgage or are in some level of distress."

As a result, hoteliers will continue to feel squeezed, and visitors will continue to get great deals, he said.

"We can't pull back the specials because we are still using them to drive demand," Wallace said. "We are all still very cautious."

http://www.hotel-online.com/News/PR2011_1st/Mar11_HawaiiGains.html