Vacation Rental Growth In Hawai’i : Higher ADRs Amidst Supply Expansion And Occupancy Declines In August 2024

Monday, September 30, 2024

Hawai’i vacation rentals saw increased supply and ADR in August 2024, though demand and occupancy rates fell compared to both August 2023 and pre-pandemic 2019 levels.

Hawai’i vacation rentals experienced mixed performance in August 2024, with notable increases in supply, demand, and average daily rate (ADR) compared to the previous year, but a drop in occupancy. When measured against pre-pandemic August 2019, ADR remained higher, but both supply, demand, and occupancy lagged behind.

In August 2024, the total statewide supply of vacation rental units reached 865,000 unit nights, reflecting a 15.9% increase from August 2023, but a 5.7% decline compared to August 2019. Demand for these units totaled 431,000 unit nights, up 6.2% from 2023 but down 36.8% from 2019. These dynamics led to an average occupancy rate of 49.8% for August, a 4.5 percentage point drop from 2023 and 24.5 percentage points lower than 2019. In contrast, Hawai’i’s hotel sector reported a significantly higher occupancy rate of 73.6% during the same period.

The statewide ADR for vacation rentals in August 2024 was $319, marking a 14.1% increase from 2023 and a 56.2% rise compared to 2019. By comparison, hotels reported an ADR of $362 in August 2024. It’s worth noting that vacation rentals differ from hotels in terms of availability, as they are not always accessible year-round or daily, and they typically accommodate larger groups than traditional hotel rooms.

The data from DBEDT’s Hawai’i Vacation Rental Performance Report excludes units included in the Hawai’i Hotel Performance Report and the Hawai’i Timeshare Quarterly Survey Report. Vacation rentals are defined as rental houses, condominiums, private rooms in homes, or shared spaces. This report does not differentiate between permitted and unpermitted units, as the legality of vacation rentals is determined at the county level.

Island Highlights

In August 2024, Maui County had the largest vacation rental supply, offering 278,000 unit nights, a 56.5% increase from 2023, though 8.9% lower than 2019. Demand reached 132,700 unit nights, up 57.2% from 2023 but down 43.8% from 2019. This resulted in a 47.7% occupancy rate, relatively unchanged from 2023 but 29.6 percentage points lower than 2019. The ADR for Maui County rentals was $370, a significant 18.7% increase from 2023 and 58.7% higher than in 2019. By comparison, hotels in Maui County had a 55.1% occupancy rate and an ADR of $515.

On O‘ahu, vacation rental supply was 230,200 unit nights, a 3.5% increase from 2023 but a 16.3% decrease compared to 2019. Demand reached 137,100 unit nights, rising 1.3% from 2023 but down 37.2% from 2019, leading to a 59.6% occupancy rate. The ADR for O‘ahu vacation rentals was $273, 12.7% higher than 2023 and 56.0% above 2019. In contrast, hotels on O‘ahu reported a higher occupancy rate of 83.1% and an ADR of $296.

The island of Hawai’i recorded 216,000 available unit nights, up 1.8% from 2023 and 5.5% from 2019. Demand fell to 94,400 unit nights, an 8.5% decrease from 2023 and a 28.4% drop from 2019, resulting in a 43.7% occupancy rate. The ADR for vacation rentals on Hawai’i Island was $253, an 11.4% increase from