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He Ho'i I Paradiso? What Can Hawaii’s Vacation Rental Industry Expect This Summer

April 15, 2021

When it comes to revenue management for 2021, it is clear that using 2020 pace data may be a tad misleading, to say the least. That doesn’t rule out all historical data, however, as using data prior to 2020 can still provide necessary insight into market and portfolio performance.

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We took a deep dive into what’s happening in Hawaii and how some of the islands - Hawaii, Maui, Oahu, and Kauai - have dealt with the lockdowns and subsequent re-openings brought on by the global pandemic.

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Key Takeaways for the Aloha State

In terms of booking pace over the past 3 weeks, 2021 is falling behind 2019 for bookings with guests arriving in the short term over the next few weeks as the Hawaii market continues to recover
Of bookings made over the past 3 weeks, there are a handful of Summer weeks this year that are booking up faster than the same time in 2019
In the last “normal” year for the market (2019), guests were not making many bookings for stay dates after mid-August, so property managers need not worry about a slow booking pace for late Summer at this point in the year.

In the entire Hawaii market, for example, the chart above displays all bookings that have been made over the past 21 days by their check-in week. Additionally, the same values for 2019 are included to provide pacing context for the entire market.

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Looking at bookings by arrival dates now through this Summer, overall booking pace is in line with 2019. While check-ins in the short term are falling behind 2019 levels, there are some weeks this Summer that are already booking up stronger week to week compared to 2019. As travel demand continues to grow for Hawaii, it’s important to consider how the market is performing compared to 2019 pace levels instead of the abnormal 2020 market performance data.

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While the year started off slow compared to 2019 (January 2021 market occupancy fell below January 2019 occupancy levels), occupancy has been growing compared to 2019 since February. As more Americans get vaccinated and make plans for “vaxications” in the short term, property managers in Hawaii should be prepared to adjust their strategies.

Local Government Restriction Impacts

Throughout the pandemic, Hawaii has been one of the more restrictive states when it comes to travel to protect all local residents from the spread of COVID-19. Visitors traveling to Hawaii in 2020 were subject to a minimum 14-day quarantine before being allowed to explore any island, which prevented many people from making Hawaiian vacation plans.

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As of late, however, vaccine rollouts and declining new cases for most of the continental United States has allowed Hawaii to open up their borders to travelers who are able to provide proof of negative tests or vaccines. While the state has had its own travel restrictions throughout the pandemic, local governments have also been able to implement stricter rules to prevent spread of the disease.

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Last Fall, Hawaii announced the Safe Travels program which required a negative COVID-19 test within 72 hours of arrival to bypass the 10-14 day quarantine requirement. This helped boost tourism to the state with booking pace increasing shortly after the announcement for most islands.

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The Big Island, Maui, and Oahu all saw a surge in bookings that helped occupancy for the beginning of 2021 grow towards 2019 and 2020 levels. For all three islands, March market occupancy actually met or surpassed 2019 levels as travel demand recovered.

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The island of Kauai, however, opted to keep stricter restrictions in place over the past few months and only recently announced that it was re-joining the Safe Travels program. This has had a serious impact on tourism as market occupancy for the first few months of 2021 remains more than 50% below the past two years. Demand is expected to rise for Kauai in the short term, however, with the new, softer restrictions.

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While the state of Hawaii overall has started to recover this year, it’s important to note how different demand for each island can be. For a more detailed look of your properties against the market, check out our Insights tool today.

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