Kolea Vacation Rental Market Update
2010 was one of the best years the Hawaii tourism industry has recorded in years. With the current economic state, along with the increase in tourism, many vacationers are choosing vacation rentals for their accommodations versus other alternatives, which fares well for Kolea.
The Hawaii Tourism Authority reported an increase in visitors to Hawaii in all four quarters of 2010 versus 2009. The percentage increase grew as the year progressed, leading speculation that there will be continued growth in Hawaii for 2011.
Hawaii Visitors 2009 vs 2010
Looking at the vacation rental industry in Hawaii it appears the industry enjoyed the growth of Hawaii tourism plus more. Instant Software, the most widely used vacation rental reservation software nationally, reported a substantial increase in vacation rental reservations in 2010 versus 2009 in Hawaii. While Hawaii tourism grew close to 10% in 2010, the vacation rental occupancy grew 20% in 2010. This growth could be attributed to the economy, enhanced marketing efforts by vacation rental companies nationally, or Gulf of Mexico issues as well as many other factors. Along with the increased occupancy there was an increase in average daily rate by 5%, which confirms that the increase was not due to “deep discounting” by vacation rental homeowners and agencies.
Kolea achieved better growth than the vacation rental trends depict for Hawaii. Occupancy, average nightly rate, and average length of stay all increased in 2010. Waikoloa Vacation Rental Management, the largest vacation rental management company within Kolea, reported a conversion rate of 88% in 2010. This was a significant increase from 2009. Conversion rate is defined as the percentage of renters who paid the advertised rate. They attribute this to having less dependency on “vacation rental by owner” related marketing sites, which are highly competitive and have very low conversions. Also having a substantial increase in repeat visitors attributed to the higher conversion rate.
Many speculate the growth will continue well into 2011. Group travel to the Big Island of Hawaii is significantly up in the first quarter, which historically has led to higher single or family traveler airline rates during that timeframe. This displacement in the first quarter will lead people to put off their travel until later dates in the year, which would give the Big Island nice growth in the following quarters of 2011. Although the closing of Kona Village due to damage from the tsunami was an unfortunate event, it has affected Kolea in a positive way. With Kona Village being the only all-inclusive resort on the Big Island of Hawaii, the majority of the guests that were scheduled to stay there are choosing vacation rentals as their alternative. Waikoloa Vacation Rental Management was able to arrange for Kona Village to recommend Kolea to their guests as a viable alternative, which not only favored well for them, but also for the Kolea community as a whole. Within a few weeks of the tsunami, Waikoloa Vacation Rental Management was fully reserved at Kolea many weeks leading to substantial overflow for other management companies and homeowners.
Waikoloa Vacation Rental Management reported substantial growth within Kolea for the first quarter of 2011 and currently has more than 500 nights reserved in 2012, which is depicting more great growth for Kolea as a vacation rental community.