If you often choose Hawaii vacation rentals, are you willing to pay more for the chance to stay at one, or are Hawaii hotels a better option for you? For longer stays, we are still choosing vacation rentals for now because of the extra space, kitchen, and free parking.

Data released by the Department of Business, Economic Development, and Tourism (DBEDT) reveals new dynamics that caught our attention. The daily rate for Hawaii vacation rentals increased to $312, a move up from the prior year and a huge jump from pre-pandemic. Most telling, however, is that vacation rental occupancy decreased to 51%, a decline from last year and even more significantly since 2019.

Compare those statistics to the latest hotel report for April 2024, with the average daily rate of $368 and hotel occupancy at 72.3 percent.

Neither hotel and vacation rental daily rates include 18% accommodation tax nor the various assorted fees than can together add up to as much as 50% of the total cost.

Island-specific results are varied with unique trends.

We think it’s worth noting the differences between the islands when considering Hawaii vacation rental stays.

Maui is still reeling from the effects of last year’s wildfire and from a pending ban on half of all Maui vacatoin rentals. So it came as no surprise that Maui showed a decline in demand and occupancy, but an increase in daily rates.

Oahu continues to show impressive resilience in both Honolulu hotels and vacation rentals, with a notable increase in the vacation rental supply with higher rates, although occupancy showed some decline.

Big Island had an increase in supply and daily rates too, with a slight increase in demand.

Kauai had big increases in supply and demand, a relatively consistent average nightly rate, but again with decreased occupancy.

Overall, Hawaii vacation rentals are both lagging behind their previous performance as well as underperforming when compared with hotels. In April 2024, as we previously reported, hotels had far higher occupancy and ADRs, reflecting what appears to be a consistent shift in Hawaii visitor accommodation preference. That in addition to the effects of planned regulatory measures affecting both availability attractiveness of Hawaii vacation rentals.

The ongoing changes in Hawaii’s vacation rental market are impacting visitors, property owners, and related businesses. The higher daily rates suggest that fewer people are opting for Hawaii vacation rentals, but those who do are paying more. This seems to reflect market adjustments to reduced demand and a way to compensate for lower occupancy rates.

For future vacation rental planning, understanding these trends is important. And for stakeholders, consider how legislative changes, economic pressures, competitive dynamics, and social media come together to affect the viability and sustainability of the Hawaii vacation rental market.

Hawaii Travel News