HVS Market Report – Journey Tendencies and Provide Modifications for the Hawaii Lodging Markett

Rendering of the Renaissance Honolulu Hotel & Residences
  JL Capital is predicted to debut the Renaissance Honolulu Lodge & Residences in late 2023. The 39-story, twin-tower property will probably be managed by Highgate Motels and can characteristic 112 branded residences situated above 187 lodge models.

Regardless of the numerous affect of the COVID-19 pandemic in 2020 and early 2021, the state of Hawaii skilled a historic surge in home tourism, driving RevPAR to report ranges in 2022. This text explores latest lodge efficiency all through the state, in addition to the outlook for the longer term.


Pandemic-Period Journey Tendencies

Hawaii enacted a number of the strictest journey measures in the USA in response to the COVID-19 pandemic. A compulsory two-week quarantine was enforced in March 2020 for all vacationers arriving to the Hawaiian Islands; this quarantine utilized not solely to out-of-state guests, but additionally to native interisland journey. In consequence, a majority of resorts and resorts suspended operations. In October 2020, a Protected Travels program was launched, easing the quarantine for inbound vacationers contingent upon a detrimental COVID-19 take a look at outcome inside three days previous to arrival. This coverage, along with the outside residing and life-style of the islands, contributed to Hawaii being perceived as a secure haven from the pandemic.
Within the second quarter of 2021, occupancy ranges started to notably enhance concurrent with a robust rebound in home tourism. As most worldwide locations remained closed, U.S. vacationers selected to go to home resort markets with a heavy give attention to the outside and nature, resembling Napa/Sonoma, Lake Tahoe, Sedona, Jackson Gap, and Hawaii. This spur in home journey supported a robust restoration in lodge occupancies, with demand rebounding to roughly 90% of pre-pandemic ranges statewide.

Customer Arrivals by Island

Visitor Arrivals by Island

Supply: Hawaii Tourism Authority

Common Fee and RevPAR Modifications

The surge in “revenge journey,” or these making up for time misplaced throughout the pandemic, spurred phenomenal fee progress on the outer islands, notably at luxurious, resort-style properties. Conversely, many lodging amenities on Oʻahu had been unable to capitalize on the speed features achieved by the outer islands. This island’s slower fee progress will be attributed to a number of elements:

  • The bigger room stock on Oʻahu and lack of room night time compression
  • Waikiki’s high-density, city setting
  • The gradual restoration of worldwide tourism, which has traditionally generated as much as 45% of visitation for the island

Whereas the outer islands achieved ADRs in 2022 between 140% and 150% of 2019 ranges, Oʻahu skilled a relatively meager 10% progress above pre-pandemic ranges.

RevPAR Metrics by Island

RevPAR Metrics by Island

*Consists of the islands of Moloka’i and Lana’i
Supply: Hawaii Tourism Authority, Smith Journey Analysis (STR)

Demand Outlook

Going ahead, demand ranges are anticipated to proceed to enhance on Oʻahu, notably as worldwide tourism picks up. The Japanese market, having solely produced roughly 300,000 arrivals in 2022, is predicted to greater than triple to about a million arrivals in 2023 primarily based on the latest Q1 2023 forecast offered by Hawaii’s Division of Enterprise, Financial Improvement & Tourism (DBEDT). Nonetheless, the return of this key market is prone to be extra gradual compared to the surge in home tourism, notably when contemplating the journey patterns of Japanese vacationers and the cyclicality of the wholesale market. As well as, a weak yen, inflation, and excessive gasoline surcharges on flights have additionally hampered the restoration of Japanese tourism. Golden Week, a multi-day nationwide vacation in early Might in Japan and one of many longest holidays of the yr for a lot of Japanese, is often a significant week for resorts and different companies in Hawaii. Preliminary stories estimate that 2023 visitation ranges throughout Golden Week had been nonetheless down by practically 50% in comparison with 2019 ranges. Current predictions from native hoteliers and different market members anticipate a stronger rebound in Japanese journey in This fall 2023.
In the meantime, home journey is prone to soften as most worldwide locations have reopened and the U.S. greenback stays comparatively robust. The lifting of COVID testing necessities previous to returning to the U.S. can be anticipated to help extra outbound home journey. Following the numerous rebound in 2022, demand ranges are anticipated to step by step enhance over the subsequent a number of years, and DBEDT is projecting statewide visitation ranges to surpass pre-pandemic ranges by 2025/26.

Hawaii Tourism Forecast This fall 2022

Hawaii Tourism Forecast Q4 2022

Supply: Hawaii DBEDT

Modifications in Provide

Given the restricted availability of land and excessive development prices, Hawaii has one of many highest limitations to entry for growth in the USA. Nonetheless, the lodging panorama has skilled a number of notable adjustments because the pandemic, together with the conversion of present provide and the addition of latest provide.

Current Openings

  • The AC Lodge by Marriott Maui Wailea opened in Might 2021 because the sister property to the adjoining Residence Inn by Marriott. This lodge marked the doorway of Marriott’s common AC Motels model to the Hawaiian Islands.
  • Dovetail + Co launched the Wayfinder Waikiki (previously often known as the Waikiki Sand Villa Lodge) in December 2022 following a year-long renovation. The lodge’s espresso store and retail retailer, B-Aspect, is at the moment open. The property’s remaining F&B retailers, together with a tropical speakeasy and pool bar and the Redfish Waikiki (Foodland’s poke restaurant idea), are anticipated to debut later within the yr.
  • Starwood Capital Group debuted the 1 Lodge Hanalei Bay (previously often known as the St. Regis Princeville) as its flagship property for the 1 Motels model in February 2023. The property is positioned to change into the highest luxurious resort on the island of Kauaʻi.
  • Sheraton Kona Resort & Spa at Keauhou Bay was rebranded in November 2021 because the Outrigger Kona Resort & Spa following its acquisition. The property reportedly started to endure a $40-million renovation ($79,000 per room) in April 2023.

Main Renovations

Following the robust reception of the Surfjack Lodge & Swim Membership and The Laylow, Autograph Assortment affiliate, the emergence of design-forward, surf-themed boutique resorts has gained traction in Waikiki. Current renovations have targeted on a playful, trendy design, which will be seen at a number of different common resorts in Waikiki, together with the Queen Kapiʻolani Lodge, Kaimana Seashore Lodge, Wayfinder Waikiki, and White Sands Lodge.

Current Excessive-Profile Renovations

Recent High-Profile Renovations

Supply: HVS

Beneath Development

  • Kona Village is lastly slated to reopen in July 2023 as a Rosewood Resort following a multi-year redevelopment. The property will primarily comprise standalone villas starting from 1,000 to six,200 sq. ft however will even characteristic a number of smaller oceanfront villas salvaged from the previous resort.
  • JL Capital is predicted to debut the Renaissance Honolulu Lodge & Residences in late 2023. The 39-story, twin-tower property will probably be managed by Highgate Motels and can characteristic 112 branded residences situated above 187 lodge models.
  • Continental Property Administration is within the technique of redeveloping the previous Remington School Constructing as a 104-room AC Lodge by Marriott; the property is deliberate to open in This fall 2024.

Lodge Transactions

Regardless of robust lodge efficiency in 2021 and 2022, transaction exercise has remained considerably muted over the previous couple of years. A number of notable transactions occurred on Maui in 2021, together with record-breaking gross sales of the Residence Inn by Marriott and AC Lodge by Marriott in Wailea, in addition to the Royal Lahaina Resort. In 2022, notable gross sales included the Maui Seaside Lodge, which is predicted to be flagged underneath a mushy model following an intensive renovation and repositioning, in addition to the Queen Kapiʻolani Lodge.

Whereas the present excessive price of capital may deter some lodge traders on the mainland, the Hawaii market is poised for stronger transaction exercise in 2023 and 2024 in mild of the latest robust features in RevPAR, particularly as Asian markets reopen.


The Hawaii lodging market made a big restoration in 2022, propelling many properties to attain record-breaking RevPAR ranges. Whereas demand ranges ought to proceed to step by step enhance over the subsequent a number of years, operators might want to stay vigilant with revenue-management methods to take care of the ADR features achieved throughout the pandemic. With tourism ranges projected to exceed pre-pandemic ranges by 2025/26, the Hawaii lodging market ought to attain stabilization round 2025.

Our staff consistently screens the Hawaii lodging market, and our many consulting engagements all through the islands hold us abreast of the most recent tendencies and shifts out there. For extra info, contact John Berean, who oversees HVS operations in Hawaii and Northern California.

About John Berean

John Berean, a Senior Vice President with HVS San Francisco, conducts lodge value determinations and feasibility research in markets throughout the western U.S.; John is the agency’s Hawaii professional. HVS leaders now dwell in and work from markets all through the western Americas area, together with LA, San Francisco, Portland, Vancouver, Las Vegas, and Phoenix. John’s hands-on hospitality expertise consists of work as Accounts Coordinator and Income Analyst for the Queen Kapiolani Lodge in Honolulu, Hawaii. John earned a Masters of Economics, with a focus in Quantitative Finance, from the Peking College HSBC Enterprise Faculty in Shenzhen, China. He beforehand majored in Worldwide Research, with a minor in Environmental Research, at Middlebury School in Middlebury, Vermont. Contact John at +1 (281) 381-3456 or jberean@hvs.com.

Related Articles


Please enter your comment!
Please enter your name here

Latest Articles