Big Island Vacation Rental Market Update
Every year I enjoy looking at the trends for the Hawaii tourism industry as there always seems to be some interesting and useful information. This year has definitely been a slightly different year than previous years in some positive and negative ways. While the Hawaii Tourism Authority only provides general information and comes to conclusions about tourism in Hawaii as a whole, I try to break it down even further to make it more relevant to vacation rentals on the Big Island. The following information is based on data through July 2014 and estimates for the remainder of 2014.
Big Island Vacation Rental Trends
While most of our properties did not see much of a decrease through July 2014, the two main figures we would be interested in decreased in comparison to the same timeframe in 2013. Of the major Hawaiian Islands, the Big Island saw the largest decrease in visitors, 2%. While for a long period condos were seeing steady growth, this is the first year people staying in condos decreased by a fair amount (close to 3%).
What to Expect for the Remainder of the Year
Although not in line with the statistics, most of our properties did better through July this year than last year. I do not see the remainder of the year being the same, which will probably make things balance out overall for the 2014 year. While typically September in a slow month, the number of air seats to the Big Island are down in 2014 as opposed to 2013. October and November are roughly the same as 2013. December has a significant increase, but that is mostly during the holiday season. Maui is seeing significant increases in all of those months.
The Canadian Market
While the US visitors are typically pretty consistent from year to year, the increase in Canadian visitors over the past few years has seemed to make the difference in the overall statistics. While they do help increase the numbers over the course of the year, they are typically seasonal and come out during the peak seasons, which really does not help vacation rental occupancies too much over the course of a year. That being said, we could see a decrease in Canadian visitors over the course of the next year for the two following reasons:
Canadian Dollar– Due to a sharp devaluation against the US dollar, Canadians will now be paying roughly 15% more than they were last year for accommodations.
Alternate Destinations– With the cost of vacationing in Hawaii increasing, Mexico looks like a more appealing alternative. Through July 2014 Canadians visiting Mexico hit a record high with over 1 million Canadians traveling to Mexico by air.
Looking Forward to 2015 and 2016
According to MMGY Global travelhorizons data, a record number of travelers (36%) say that they are extremely likely to visit Hawaii in the next 24 months. Although this is great, converting that number to actual visitors is extremely tough. The largest factor is airfare with over 42% of people stating that they chose to vacation elsewhere due to the cost of air to Hawaii.
How are People Booking?
As I mentioned in the prior newsletter, we had made a fairly large update to our web site. Although the update was not too large as far as appearance goes, it did make it more mobile friendly. We have seen positive numbers in all the relevant web site traffic stats relating to mobile devices since making the change. This has been a nice modification given that the use of mobile devises to book/research travel is continuing to increase. Roughly 35% do their research on travel on a mobile device with over 20% actually booking on a mobile device.
In conclusion it does look like things are continuing to move in a positive direction for the tourism industry in Hawaii as a whole. It is just a matter of people choosing the Big Island as opposed to other islands such as Maui, which is seeing the largest growth, and choosing to stay in a vacation rental versus a hotel.
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