Expedia report: Vacation rentals are central to Hawaii's booming - Hawaii News Now - KGMB and KHNL

Expedia report: Vacation rentals are central to Hawaii's booming tourism industry

(Image: Cameron Brooks/Facebook) (Image: Cameron Brooks/Facebook)
HONOLULU (HawaiiNewsNow) -

A new study commissioned by online travel site Expedia claims vacation rentals are critical to maintaining Hawaii's vibrant tourism economy, and attempts to remove or limit those units would cost the state hundreds of millions of dollars in tourism losses. 

The report from Expedia, which owns vacation rental sites VRBO -- Vacation Rental By Owner -- and HomeAway, uses 2016 data to show that the hotel occupancy rate of Hawaii hotels is at or near capacity.

Vacation rentals, the report says, are needed to accommodate all the visitors who wish to spend time in the islands.

According to the study conducted by Hospitality Advisors, the state risks losing 319,000 tourists each year and their $431 million in spending and $37 million in tax revenue if it were to remove the more than 12,000 vacation rental homes it claims are on the market. 

Critics were quick to call the report inaccurate. A Unite Here Local 5 representative told the Honolulu Star-Advertiser the study was "self-serving," adding that illegal vacation rentals are to blame for rising housing costs and a decline in new hotel construction and hospitality jobs. 

Experts say the number of vacation rental listings have skyrocketed in recent years, due in large part to online advertising.

About one quarter of the state's total lodging inventory is made up by vacation rentals, most of which are operated without the proper government approvals, according to the Hawaii Tourism Authority.

HTA counters Expedia's claims about hotel occupancy -- saying last year on average statewide -- it was 79 percent.  

Furthermore, a 2016 HTA study on the impact of vacation rentals in Hawaii finds their prevalence is much more prolific than the Expedia report indicates. 

According to the HTA, there were about 45,052 property owners who rented short-term to visitors statewide last year. Sixty-two percent of them are out-of-state property owners and 81 percent advertised online. Of those properties, 63 percent were residential apartments and houses being used as vacation rentals -- not units in commercially zoned areas. 

Officials say this is key because the rapid expansion of illegal vacation rentals has increasingly been blamed for the lack of affordable housing inventory for local residents. 

On Oahu alone, there are an estimated 3,700 illegal vacation rentals and only 830 "grandfathered" legal listings, which were around before the county outlawed the practice in 1986.

It's an issue that is slated to come before the Honolulu City Council sometime this month. According to the paper, Council Chair Ron Menor plans to introduce an amended version of Resolution 1752, which was deferred in April.

The ordinance would allow residents to file civil complaints against illegal vacation rental operators without needing to first attempt to resolve the issues through city administrative channels. The resolution also reportedly prohibits illegal vacation rental operators from advertising their units by any means, whether in print or online.

It would also earmark additional funding to investigate and enforce regulations against illegal vacation rentals. 

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