Hawaii hotel profit margins narrow

By Howard Dicus

HONOLULU (HawaiiNewsNow) – A new report shows that costs are rising for Hawaii hoteliers, and more of their revenue is recirculating in the local economy.

Hospitality Advisors, the consulting firm that tabulates weekly hotel occupancy across the state, is finalizing a more detailed report on revenues and costs, based on data representing two thirds of the hotel rooms in the islands.

Comparing 2007 to 2010, payroll has risen from 33 percent to 41 percent of total revenue. Room expenses has risen from 26 percent to 32 percent. Utilities bills have risen from 4 percent to 6 percent.

Food and beverage costs have risen from 50 percent to 60 percent of total food and beverage revenue.

When more money goes to wages, local supplies, and local contractors, it means more hotel revenue recirculates in the Hawaii economy.

Hotel owners, who are mostly on the mainland, are mostly still reaping profits, but because those profits are smaller as a percentage of revenue they may be squeezed in making debt payments from their original hotel purchase deals.

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