As Hawaii hotel room prices continue to climb, industry suppliers have been questioning whether these rates are driving customers to opt for alternative destinations such as Mexico and the Caribbean. Pleasant Holidays CEO Jack Richards noted a significant premium of approximately $175 to $200 in Hawaii room rates compared to those in competing markets. However, he also pointed out that the comparison is not entirely fair, as the majority of accommodations in the Caribbean and Mexico are all-inclusive, significantly impacting the overall cost.
Factors Driving Up Costs
Upon closer examination, Pleasant Holidays discovered that the increase in Hawaii visitor costs is not solely due to room rates. Additional fees such as resort fees, parking fees, and rising food and beverage costs also contribute to the overall expense. Richards specifically highlighted the Hawaii accommodations tax as a significant driver of these escalating costs. According to the Hawaii Department of Business, Economic Development, and Tourism, per-person, per-day spending by U.S. visitors has risen to $242 in February, up from $194 in 2019.
Industry executives have observed that the surge in room rates is already influencing customer decision-making. Delta Vacations President Kama Winters noted that advisors have commented on the high hotel prices in Hawaii, comparing a short stay in the state to a more extended vacation at an all-inclusive resort. Customers are increasingly weighing the value proposition offered by Hawaii against the quality and affordability of all-inclusive options in Mexico and the Caribbean.
ALG Vacations group president Ray Snisky emphasized that Hawaii is one of the highest-priced destinations, facing stiff competition from Mexico. He highlighted the recent surge in investment in Mexican resorts, resulting in a significant improvement in quality and a broader range of luxury offerings at competitive prices. Classic Vacations CEO Melissa Krueger pointed out that while Hawaii’s five-star hotels and resorts are on par with those in Mexico and the Caribbean in terms of pricing, the state’s four-star accommodations are struggling to remain competitive.
The rising room rates in Hawaii are reshaping the landscape of the state’s tourism industry. While the allure of Hawaii’s natural beauty remains strong, it is essential for stakeholders to address the cost concerns raised by industry experts and customers alike to ensure the continued growth and success of Hawaii’s tourism sector.