It's been a little more than a year since deadly wildfires ravaged West Maui, and while hotel performance hasn't returned to 2023 levels yet, Maui still is one of the top-performing markets in the U.S.
The recovery process for Maui was sure to be an arduous task following the fires that began in early August 2023 and resulted in more than 100 deaths, along with massive building and land destruction. Recovery also was complicated by disputes over the ethics of allowing tourism to the island while its residents started to rebuild their lives, homes and community infrastructure.
On one hand, tourism was responsible for about 40% of Maui's gross domestic product and indirectly or directly brought in 70% of every dollar generated in Maui, according to the Environmental and Energy Study Institute. On the other hand, resources were sparse for residents who lost their homes.
Maui is ready
In the immediate aftermath of the fires, Hawaii Gov. Josh Green and the Hawaii Tourism Authority strongly discouraged non-essential travel to West Maui. In March, the tourism authority launched "Mākaukau Maui," which means "Maui is Ready," indicating the island was ready to embrace tourism once again so residents could get back to work.
Hotel performance in Maui is still lagging 2023 levels, though, CoStar Group Senior Director of Hospitality Market Analytics Emmy Hise said in an STR blog post.
"While most of the hotel performance decline was due to the devastating fire, performance was already starting to slow before the fire, similar to many U.S. leisure destinations," she said. "Nationally, domestic leisure demand has slowed due to Americans traveling abroad or travelers being more budget-conscious, causing them to take fewer trips or pick less expensive destinations. The lagging international visitor recovery, mainly from Japan and China, also hinders hotel performance."
Despite decreased performance across the island, Maui had the U.S.'s highest 12-month average daily rate as of July at $551. This is down from its 12-month ADR in July 2023 of $609, but still remains about $120 higher than the second-highest destination, the islands of Hawaii and Kauai, Hise said.
While some islands such as Hawaii and Kauai experienced a decrease in occupancy, Maui was the only island to have a decrease in ADR, in part due to rates being lowered to more reasonable prices for displaced residents, she said.
Oahu is the only Hawaiian market that increased hotel performance growth. It's home to the state capital, Honolulu, and the Hawaii Convention Center. Thanks to group and corporate demand, Oahu had the second-highest 12-month occupancy in the U.S. at about 81%.
Despite all of this, "hotels in Hawaii have the highest topline performance metrics, with Maui, Hawaii/Kauai, and Oahu achieving the first, second, and fifth-highest 12-month average revenue per available room, respectively, in the U.S.," Hise said.
"While travel demand contributes to higher ADR, it is also expensive to operate a hotel due to the high cost of living on the islands, which increases labor and supply operating expenses," Hise said. "Hawaii is a highly desired destination due to its year-round temperate weather, sought-after beaches, and plentiful excursion options. As such, continued recovery in Maui is expected, with annual RevPAR expected to reach peak levels again in 2025."
Airlift still lags
Tetsuji Yamazaki, general manager of the Sheraton Maui Resort and Spa in Lahaina, Hawaii, said demand is starting to come back, but occupancy at his property is down 20% to 25% from where it was prior to the fires. He attributes some of this lagging occupancy to the lack of direct flights to Maui.
Yamazaki said airlines have reduced available seats to Maui by 30% due to a lack of demand even though hotels in the Kaanapali area have been open and are ready for visitors.
"In Hawaii or Maui ... the only way from the mainland to here is to fly. You can't really drive here, so air seats are really important for us," he said.
During its second-quarter earnings conference call with investors in early August, Host Hotels & Resorts cited soft leisure demand and fewer flights to Maui. Host owns the 810-room Hyatt Regency Maui Resort and Spa between Kaanapali and Lahaina, the 320-room Andaz Maui at Wailea Resort and 450-room Fairmont Kea Leani, Maui in Wailea.
"I believe that in the quarter we were down about 16% [total airline seats] over the same time frame in 2019. And that's down another 6% over where we were last year," Host President and CEO Jim Risoleo said on the call. "So it's a bit of a chicken-and-egg situation. ... We're going to be encouraging the airlines to put more capacity into their Maui routes, but we've got to bring the customers back as well."
Hawaiian Airlines added a few additional flights into Maui this summer, and Delta Airlines is adding additional direct flights from Atlanta, Boston, Salt Lake City and Seattle in November and December through early 2025.
Group bookings were already down in Hawaii in 2023 and 2024 due to recovery from the pandemic, and the fires only made that recovery even trickier, Yamazaki said.
"We're backed up in booking a group and with the fire, we weren't able to secure group business. The group business is trading behind," he said.
Hoteliers and tourism officials were optimistic that a full recovery could be reached by this holiday season at the end of the year, and while Yamazaki said most expect a pickup in demand during that period, he's hoping for a recovery by next summer.
A big part in recapturing that demand is getting the word out that Maui is ready again for tourism.
"We are still working with some of the perception that the people are holding off from coming to Maui," he said. "We've been working with the Hawaii Tourism Authority and Hawaii Visitors and Convention Bureau ... to pump out our marketing messages to say that Maui is open, Maui is ready. We want everybody to come and rediscover Maui."