Hawaii Visitors Shifting Away from Vacation Rentals, Towards Hotels
The number of vacation rental rooms booked in Hawaii has seen a significant decline, while hotel stays are on the rise. According to a report by the Hawaii Department of Business, Economic Development & Tourism, in November 2024, only 388,800 out of 803,100 available vacation rental unit nights were booked, a decrease of 2.4% compared to 2023 and a whopping 38.3% drop compared to 2019.
Travel adviser and owner of Hawaii Aloha Travel, Bruce Fisher, attributes the decline to the increasing cost of visiting Hawaii, including inflation, high taxes, and extra charges. “Travelers seem more price-sensitive than ever, and high nightly rates may be prompting them to choose alternative destinations that offer better value,” he said.
The average daily rate for vacation rentals in November 2024 was $313, an increase of 6.5% compared to November 2023 and 48.3% compared to November 2019. In contrast, the average daily rate for hotels was $335, slightly higher than the average vacation rental.
Fisher believes that visitors are choosing hotels because they offer more amenities at a slightly higher price. He advises owners to adjust their pricing strategies to remain competitive.
The decline in occupancy levels cannot be linked to a single cause, as the Hawaii vacation rental market has seen significant changes in recent years, including new regulations and changes in the composition and location of vacation rentals.
Justin Tyndall, associate professor of economics at the University of Hawaii Economic Research Organization, notes that traveler interest in vacation rentals is stable, but new regulations and changes have made it more difficult to book them. He also sees price as a contributing factor, with the more expensive vacation rentals being more likely to have higher vacancy rates.
Maui County’s plan to phase out around 7,000 vacation rentals that were exempt from standard permitting and are located in apartment districts will further increase the price of staying at a vacation rental.
With all the changes that have happened in the Hawaii vacation rental market since 2019, it is unlikely that the market will return to its previous levels. “I don’t think we’ll see it returning to the levels as it was before, because we’re going to see some policies that prevent the ability to operate vacation rentals,” Tyndall said.