Low demand results in more available vacation rentals
There was a larger supply of vacation rentals in July compared with the same month in 2022, but demand and occupancy were down, according to a recent report from the state Department of Business, Economic Development and Tourism.
The report, which was compiled using data from Transparent Intelligence Inc., defines vacation rentals as the use of a rental house, condominium unit, private room in private home or shared room/space in private home. It showed unit supply grew 18.4% to 792,902 units, while demand fell 5.5% to 454,719 units and occupancy dropped 14.5 percentage points to 57.3%. The average daily rate for a vacation rental unit, however, rose 1% to nearly $304.
ADVERTISING
In comparison, Hawaii hotels achieved high occupancy and rates and saw lower performance drops in July. July occupancy for Hawaii hotels was 77.4%, a 3.8-percentage-point drop from July 2022, and ADR was $409, down 2% from July 2022. DBEDT noted that “unlike hotels, units in vacation rentals are not necessarily available year-round or each day of the month and often accommodate a larger number of guests than traditional hotel rooms.”
Vacation rental performance varied across the islands. Despite harsh crack downs on illegal vacation rentals, including referrals to collection agencies, Oahu had the second-highest vacation rental supply in the state at 212,000 available rental nights in July—up 16.9% from July 2022. Demand fell 1.8% to 132, 000 unit nights. Occupancy dropped 11.9 percentage points to 62.3%. However, ADR rose 9.3% to $247.
Hawaii Island experienced a 17.5% rise in available units in July, which reached 204,700. Demand, however, fell 13.4% to 98,700 unit nights. Occupancy dropped 17.2 percentage points to 48.2% , while ADR fell 7.7% to $237.
Kauai had the least amount of available vacation rental units in July, although the count reached 126,200, up 49.1% from July 2022. Demand rose 6% to 65,000 unit nights. Occupancy fell 20.9 percentage points to 51.5%, while ADR dropped 4.3% to $387.
Maui had the state’s highest vacation rental supply at 250,000 available units, up 8.9% from 2022. Demand for Maui units fell 7.4% to 158,800 unit nights. July vacation rental occupancy on Maui was 63.5%, down 11.2 percentage points from July 2022. ADR on Maui rose 2% to $359.
It’s still unclear how vacation rental performance will be affected on Maui in August, following the fire that destroyed Lahaina town and early in the month had already caused visitor arrivals to drop 70%.
Initially, visitors were asked to leave Maui, and social media promoted the idea that due to sensitivity Maui should be closed, which resulted in huge cancellations for Maui’s visitor industry. Gov. Josh Green’s sixth emergency proclamation still prohibits nonessential travel to West Maui through at least Oct. 17.
Some Maui vacation rentals could see a boost from a partnership between Airbnb and the state to provide temporary housing to at least 1,000 displaced Maui residents.
Oahu’s numbers in August also could be affected by the Maui wildfires as Mayor Rick Blangiardi suspended the short-term vacation rental 30-day minimum rental period requirement from Aug. 11 to 24 to help provide emergency housing for Maui residents.
