On Monday, Walt Disney Co. opens the Aulani resort at Ko Olina. A grand opening comes later, but a grand opening isn't an opening at all; it's a contrived event for publicity purposes. Whatever else may be contrived Monday, the resort is really opening and people will start staying there.
Ramsay Wharton and I will both be live from Aulani on "Sunrise" and to prepare for my reports I've been studying the Hawaii Tourism Authority and DBEDT (state Department of Business, Economic Development & Tourism) reports on lodging inventory. Here are my notes.
The state counted 75,048 units in 2010, including hotel rooms, condos, timeshares, B&Bs and any other place where a visitor can stay. As an article in the Sunday edition of the Honolulu Star-Advertiser points out, a suite may be counted as one unit, but if it can be sold as two units by closing and locking a connecting door, it is more often counted as two. So I'll use rounded-off numbers from here on out.
Hawaii lodging inventory has risen by fewer than 2,000 units in five years. Sometimes hundreds or thousands of units may go offline for renovation, then back online as a remodeled hotel or as a hotel converted to condos. In 2010, for example, lower participation in condo hotel rental pools offset the opening of the Trump tower. But it is safe to say 70,000 lodging units are in active inventory, not just available on paper but really ready for you to book today for a stay tomorrow.
State lodging inventory has been around 70,000 or more for the past quarter century, compared to 47,000 units in 1978, the first year I visited Hawaii.
For years we've said half the hotel rooms in the state are on Oahu, but when you count all visitors units Oahu now has 45% of the total. Although Hawaii County has the second largest population to the City and County of Honolulu, it is Maui County which has the second biggest chunk of lodging inventory:
- Oahu 34,000 units.
- Maui 19,000 units.
- Big Island 12,000 units.
- Kauai 9,000 units.
- Molokai 400 units.
- Lanai 350 units.
So how many of these "lodging units" are traditional rooms in traditional hotels? Still most of them, as it turns out, yet perhaps not as large a percentage as you might think:
- Hotel rooms 57%.
- Condotels 19%.
- Timeshares 13%.
- Individual visitor units 9%.
- B&Bs 2%.
There are, with the opening of Aulani, 10,000 timeshare units in the state. (The state counted 9,909 units last year.) It is a substantial part of our lodging industry, though that is fewer than the 15,000 units in condotels and not so much more than the nearly 7,000 individual rental units available across the state.
The importance of timeshares to Hawaii tourism lies in the fact that timeshare owners are more likely to visit during economic downturns because they have in effect already paid for it. Timeshares smooth out our economic cycles to a degree.
Timeshares are more important to some islands than others:
- Oahu 2,400 units, pre-Aulani. Oahu's 26,000 hotel rooms and 5,000 condotel rooms have little competition. All the B&Bs, individual rental units and hostels on the island, taken together, add up to fewer than 1,000 lodging units. Most timeshares are in Waikiki, but there were 800 timeshares on the Leeward coast even before Aulani opened. Hilton edges Marriott as the largest timeshare player on the island.
- Maui 3,300 units. Maui timeshares, mostly on the Lahaina-Kaanapali-Napili-Kapalua coast and in Kihei, compete with thousands of luxury hotel rooms. There almost no timeshares on Molokai/Lanai. Starwood edges Marriott as the biggest timeshare player on Maui, according to the state inventory report.
- Kauai 2,600 units. Kauai has as many timeshare units as hotel rooms, and almost as many individual rentals units. Timeshares are more important to Kauai than any other island. Princeville has the most but they're all over the island. Marriott is the biggest player, though, with about a fifth of the units.
- Big Island 1,600 units, mostly in Kona and Waimea/Kamuela. The Big Island has even more individual rental units than timeshare, not to mention almost 400 bed-and-breakfasts. Hilton alone controls more than a third of Big Island timeshare units.
Timeshares are thought to date back to the 1960s when a ski resort developer in the Alps encouraged people to buy permanent control of a condo for a particular week every year. As a practical matter, modern timeshare owners use a couple of trading exchanges to barter their control of a timeshare in one place to obtain the use of one in another location.
The value of a timeshare goes down sharply after purchase, and it's not for everybody. Many people who want to "live in another place" for a couple weeks rather than staying in a hotel are probably better off renting a condo or home for the vacation, but others like the feeling of making an annual pilgrimmage to a place that is theirs, at least for that period. Fewer than 6% of American households own a timeshare, but that is still perhaps 5 million households.
The American Resort Development Association, whose president has been on "Sunrise" the last couple times he was in Hawaii, counts more than 1,600 U.S. timeshare resorts with more than 150,000 units. There are more than 5,000 timeshare resorts worldwide, so about a third of all of them are in America.