More Hawaii tourists skipping hotels

updated 12:57 p.m. ET July 17, 2007

HONOLULU - More and more tourists to Hawaii are bypassing hotels and finding alternate accommodations such as timeshare units, bed-and-breakfast inns or simply a couch at a friend's house.

Despite record arrivals in May, hotel occupancy fell 6.5 percentage points to 69 percent because of increased use of non-hotel accommodations, according to the latest report by Hospitality Advisors LLC.

For the first five months of the year, hotel occupancy has dipped 6 percentage points to 74.4 percent.

Meanwhile, the numbers of visitors who stayed in vacation condominiums, timeshares, cruise ships or with friends and relatives have all increased, according to the state.

Hotel consultant Joseph Toy, chief executive of Hospitality Advisors, said Friday that he first noticed the trend about four years ago, especially with repeat visitors to Hawaii.

Toy said a sharp decline in tourists from Japan also has affected hotel occupancy. About 95 percent of Japanese visitors to Hawaii stay in hotels, as opposed to about three-quarters of Americans.

Another factor is that more than 2,000 hotel rooms in Waikiki were being renovated last year and are now back online. Hotels are also charging record-high rates.

However, guests aren't necessarily saving money by avoiding hotels and resorts. Each of the six rooms at the Ho'oilo House, a Balinese-inspired bed-and-breakfast in West Maui, runs $315 a night.

Amy Wisthoff-Martin, a partner of the B&B, said her guests are seeking luxury and privacy.

"The resort areas in general have just gotten a little crazy," she said. "Even though you've got all these great amenities, you have a lot of people to deal with."

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Hal Nordblom, general manager of the Holualoa Inn, which sits on a 30-acre coffee farm near Kailua-Kona on the Big Island, said his guests are usually couples seeking a relaxing, intimate and personal experience.

"We'll know them by first name right when we greet them," he said. "Most people don't want to be a number at the front desk checking in."

So some are forsaking the resorts and their luxurious lobbies, sprawling swimming pools, 24-hour room service and heavenly spas for a little privacy and space.

But hotel chains aren't suffering. They're actually leading the way in the timeshare movement.

Hyatt, Hilton, Marriott and Starwood have successful timeshare divisions using a club concept where timeshare buyers receive points that offer the flexibility of staying at other properties, including some hotels.

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"I think it's a complementary product to the hotels," Toy said. "Hotels are expanding their brand through timeshares."

Starwood is quickly growing its timeshare presence in Hawaii. The company is opening a new tower later this month at the Westin Kaanapali Ocean Resort on Maui and will open the Westin Princeville Ocean Resort Villas on Kauai next year. It is also in the permitting stage for a new property in Poipu on Kauai.

Gregg Lundberg, general manger of the Westin Kaanapali Ocean Resort, said his property has been extremely popular with families because it offers full kitchens, washers and dryers and multiple bedrooms along with the amenities of a hotel.

"There are just more options than ever before," said Daniel Nahoopii, chief of tourism research of state Department of Business, Economic Development and Tourism.

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