Tourism recovery 'sustainable' but 'uneven'

By Howard Dicus - bio | email

HONOLULU (HawaiiNewsNow) - The recovery of Hawaii's hospitality industry will continue in 2011, but slowly, with bumps along the road, speakers said Thursday at a yearly conference on the state of the business.

Hawaii hoteliers, attending the 18th Annual Visitor Industry Leaders Briefing at the Halekulani Hotel Thursday, were told that it could be two years or more before peak revenue levels are regained in real dollars, however welcome current year-to-year gains are.

"The recovery appears sustainable, but it's uneven, with continued discounting," said Joe Toy, CEO of Hospitality Advisors, which does the weekly and monthly hotel occupancy reports. "We're seeing short booking windows and tough yield management."

Toy said hotels in 2010 have gotten only 38% of their revenue from hotel room sales, with the rest coming from retail, food, entertainment and recreation, and so on.

Keith Vieira, regional vice president for Starwood Hotels, questioned some of the percentage figures offered, intimating that retail sales particularly could be better. Tracking visitor spending has proven elusive this year, with some stores and attractions sellers reporting strong rebounds while others say they simply aren't seeing it yet.

David Carey, CEO of Outrigger, said rebounding revenues should be viewed in the context of operating costs that have been rising throughout the slump. In other words, it takes more than a return to an old revenue level to catch up. Carl Bonham, executive director of the University of Hawaii Economic Research Organization, cited.

Steve Hood, vice president of Smith Travel Research, said one thing helping Hawaii is that it does not have an oversupply of rooms as some mainland markets do.

"You've done a good job taking rooms off the market for renovations and condo conversions," said Hood. "Other destinations are 'underdemolished'!"

Hawaii has 281 hotels and more than 57,000 hotel rooms. Hawaii lodging inventory is 57% hotel rooms, 19% condotel units, 13% timeshares and 11% other.

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