"Hawaii's lodging industry is a travel bargain at the moment," says Joseph Toy, Honolulu-based director in the PricewaterhouseCoopers Financial Advisory Services (FAS) group. "Unlike mainland U.S. gateway destinations, there is no shortage of available rooms -- and average daily room rates have risen at far less than the rate of inflation," he adds.

Occupancy fell in each category of hotel in Hawaii, with the exception of budget hotels, where occupancy actually rose 0.9 percentage points to 72.6 percent in August of 1998 from a year earlier. The steepest drop was in economy hotels, where occupancy fell 8.6 percentage points to 68.3 percent in August 1998 from 76.9 percent in the year-ago period.

"There is no question that a lower level of eastbound visitor arrivals is playing a major role in Hawaii's lower occupancy rates," Mr. Toy explains. "Meanwhile, growth in westbound visitor arrivals was modest in August, well off the brisk pace we had enjoyed year-to-date."

Hawaii hotels were nearly as easy on the wallet in August of 1998 as they were a year earlier. Increases in average daily room rates in Hawaii were less than five dollars in each category of hotel -- luxury, upscale, midprice, economy and budget -- from August 1997 to August 1998, Mr. Toy notes.

But with declining occupancies and steady room rates, revenue per available room (or RevPAR) -- an important hotel industry measure -- decreased 5.3 percent in August 1998 from the year-earlier period in Hawaii. The RevPAR decline was the steepest statewide decrease since January of 1994, Mr. Toy said.

For a complete copy of the PricewaterhouseCoopers Hawaii Flash Report, visit www.lodgingresearch.com. The monthly Flash Report survey encompasses 67 percent of all Hawaii hotel inventory and is the most comprehensive measure of its kind in Hawaii. The data have been weighted geographically and by class of property.

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