United States -  Oahu Island

Tourism is the core of O'ahu’s economy. Attracting more visitors than any other island in the state, O'ahu offers a Hawaiian experience in a relatively urban setting, particularly in Honolulu. While occupancy declined in 2006 and 2007, ADR grew from 2006 to 2008, as hotel operators raised rates to maintain RevPAR. However, occupancy fell again in 2008 and 2009, as the Great Recession led to a contraction in destination travel. Heavy discounting to attract visitors prompted the ADR declines in 2009 and 2010. Hotel occupancy generally recovered from 2010 through 2015, with the exception of 2013, due in part to the large increase in demand from Asian markets. In 2015, travelers to Europe and South America were displaced to this market, as terrorist activity and the Zika virus, respectively, affected the perception of those markets as tourist destinations, causing a minor increase in occupancy. Occupancy declined in 2016 given the entrance of new supply and continued to decline in 2017, attributed primarily to the renovations and rebranding of several properties within the Waikiki submarket, recovering slightly in 2018. ADR generally strengthened year-over-year from 2011 through 2018, aside from a slight decline in 2015. In 2019, tourism reached an all-time high, with visitor arrivals surpassing 10.4 million for the State of Hawaii that year; both occupancy and ADR increased in 2019.

The greater Hawaii market was devastated by the COVID-19 pandemic in 2020. A mandatory two-week quarantine for all travelers arriving to the Hawaiian Islands was implemented in March 2020; thus, most hotels and resorts temporarily suspended operations. Demand began to trend upward in June as the quarantine was lifted for interisland travel. The quarantine for inbound travelers was further eased in October, contingent upon a negative COVID-19 test result; in response, lodging facilities began to reopen in October and November. Occupancy remained relatively flat through the remainder of 2020 and the first quarter of 2021, attributed to large outbreaks of COVID-19 in major feeder markets. A distinct shift occurred in late March/early April 2021, as occupancy began to rebound along with strong leisure demand. Market-wide RevPAR approached pre-pandemic levels over the summer, supported by the wide distribution of the vaccines and improving national and local economies. Demand dropped sharply toward the end of August given the prevalence of the Delta variant, with occupancies remaining depressed through the remainder of 2021, concurrent with a spike in cases attributed to the Omicron variant. While neighboring islands have been performing strongly and are expected to recover to 2019 levels by 2023, O'ahu is anticipated to lag in performance until international travel resumes.

* Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent “big picture” data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Change In Value For Market:

Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: More than -10%

For more information, please contact:

John Berean
Senior Vice President
Hawaii and Northern California Market Leader
[email protected]
  • +1 281 381-3456 (w)