Vacation rental occupancy in June was lower compared with the same month in 2023; however, supply, average daily rate and demand were higher, according to the state Department of Business, Economic Development and Tourism.
The report, which was compiled using data from Lighthouse Intelligence Ltd., defines vacation rentals as the use of a rental house, condominium unit, private room in a private home or shared room/space in a private home. Data comes from permitted and unpermitted units listed on Airbnb, Booking.com, Vrbo and Tripadvisor.
It showed unit supply grew 6.8 percent to 820,500 unit nights, while demand rose 0.4 percent to 419,400 unit nights — a combination that caused occupancy to drop 3.3 percentage points to 51.1 percent. The average daily rate for a vacation rental unit, however, rose 5.6 percent to nearly $320.
The vacation rental ADR was lower than the $373 ADR achieved in June by hotels, which still get the lion’s share of Hawai‘i’s lodging reservations. Vacation rentals differ from hotels because units are not necessarily available year-round or even on any given day. Vacation rental units also are larger than hotel units and accommodate more guests per reservation.
Vacation rental performance varied across the islands, and occupancy may have been affected by the downturn of visitors, especially on Maui. Vacation rentals across the state also may have been affected by pushback from the community and the highest levels of government to crack down on unpermitted rentals.
The state Legislature passed Senate Bill 2919, which Gov. Josh Green signed into law as Act 017 on May 3 and clears up issues of state preemption of vacation rental management by allowing counties to craft their own policies, which “regulate the time, place, manner, and duration in which uses of land and structures may take place.”
Given the new state law, vacation rental owners across the state are closely watching Maui Mayor Richard Bissen’s proposal to phase out the legal use of roughly 7,000 short-term vacation rentals in apartment-zoned districts.
The Maui County Planning Commission voted 5-0 Tuesday evening to recommend that the Maui County Council approve the draft bill proposed by Bissen that, if enacted, would ban short-term rental use of about 2,200 properties in West Maui as of July 1, followed by the rest on Jan. 1, 2026. The Maui County Council must hold public hearings on Bissen’s proposed bill before deciding whether it should become an ordinance.
Maui had the state’s highest vacation rental supply in June at 256,800 available unit nights, up 4.3 percent from June 2023. Demand for Maui vacation rental units fell 13.5 percent to 126,500 unit nights. June vacation rental occupancy on Maui was 49.3 percent, down 10.2 percentage points from June 2023. ADR on Maui rose 7 percent to $380. Maui County hotels reported a higher occupancy of 57.5 percent and a higher ADR at $563.
Honolulu County has been cracking down on unpermitted vacation rentals by referring those who have accrued enforcement debts to a collection agency. Still, O‘ahu had the second-highest vacation rental supply in the state at 222,900 available rental nights in June — up 5.5 percent from June 2023. Demand rose 14.4 percent to 136,500 unit nights. Occupancy rose 4.8 percentage points to 61.2. percent. ADR rose 10.5 percent to $268. By comparison, O‘ahu hotels in June reported a higher occupancy rate of 85.2 percent and an ADR of $296.
Hawaii Island experienced an 8.2 percent rise in available units in June, which reached 210,100. Demand, however, fell 1 percent to 89,300 unit nights. Occupancy dropped 4 percentage points to 42.5 percent, while ADR rose 5.3 percent to $258. In comparison, Hawai‘i Island hotels reported ADR at $424 and occupancy of 67 percent.
Kaua‘i had the least amount of available vacation rental units in June, although the count reached 130,700, up 12.2 percent from June 2023. Demand rose 8.5 percent to 67,100 unit nights. Occupancy fell 1.8 percentage points to 51.3 percent, while ADR increased 3.9 percent to $393. Kaua‘i hotels reported ADR at $459 and occupancy of 75.3 percent.
