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Why Did These Hawaii Airbnb Rates Just Drop 40%?

In the past few months, data shows a shift in Hawaii vacation rentals has started. And it may well be for the better from the visitor’s point of view. But there’s more to it than that.

It isn’t entirely clear what this change in pricing of Airbnb Hawaii vacation rentals implies for future visitor spending here. Could Hawaii tourism be finally less robust, or is this only an adjustment in relation to the ridiculous increases the Hawaii vacation rental market has seen over pre-Covid pricing?

Drop in Airbnb Hawaii vacation rental rates.

One data industry data source for Hawaii vacation rental rates is alltherooms.com. We check there to get an idea of recent performance, which currently goes through April 2023. Their data indicates that some of the highest-priced Hawaii vacation rental markets are among those in the US that have recently seen the greatest drops in daily rental rates.

  • Kaanapali Maui. February $761. April $455. Down 40%.
  • Wailea Maui. February $776. April. $481. Down 37%.
  • Kona Big Island. February $298. April $247. Down 12%.
  • Princeville Kauai. February $391. April $350. Down 11%.
  • Honolulu Oahu. February $208. April $197. Down 6%.

Other places in the US that have also reported recent rate drops include Nashville, Phoenix, Myrtle Beach, and Florida beach destinations of Panama City and Orlando.

Latest state data on Hawaii vacation rentals is inconclusive on price drops.

The latest month for which the state has its own data about vacation rental performance is May 2023. And in that month, both occupancy and rates were mixed, although occupancy was decidedly low. Occupancy was just 54% statewide, down 16% compared with 2022.

Big Island: Occupancy was 44%, -20%. The average rate was $228, down 2%

Kauai: Occupancy was 52%, -19%. The average rate was $375, down 5%

Maui: Occupancy was 60%., down 15%. The average rate was $344, up 6%

Oahu: Occupancy was 57%, down 10%. The average rate was $231, up 10%.

Conflicting data on Hawaii vacation rentals.

Various travel industry analysts have chimed in on these recent changes, but none agree on the cause, or the exact data points themselves. Hawaii vacation rental platform Vacasa said recently that business is finally on a downward trend after two years of record bookings. “We continue to see evolving booking patterns as the industry comes off of two record years, and we are experiencing some renewed bookings softening, especially on the close in part of the booking curve.”

This could be good for Hawaii visitors.

What’s happening in this regard is making for a most unusual summer season; perhaps even an ideal time to plan a last-minute trip while staying in a Hawaii vacation rental.

A changing Hawaii travel landscape.

Some Hawaii visitors are moving on from Hawaii to other places. We’ve seen it in your many comments, and it is clear as we study the global travel industry. Those who, in the past few years, have focused on safe and easy Hawaii are expanding their horizons for multiple reasons. One of the most important of which is that Hawaii has become too expensive for many. Visitors are now feeling more comfortable traveling internationally again, and so Hawaii finds renewed competition as a destination. How much visitors are willing to spend on a domestic Hawaii vacation is definitely in a state of flux.

Vacasa said that it simply isn’t seeing the volume of return visitors to places, like Hawaii, that performed well over the past couple of years. They said, “We are in a very different demand environment than we were a year ago.”

Last-minute Hawaii vacation rental deals even this summer?

Perhaps, but not necessarily. Why? We know that occupancy rates are in a continuous state of modest decline or more. So that could mean last-minute deals. Some owners, whether listing on Airbnb or elsewhere through a vacation rental management company, may now be willing to negotiate prices. And it never hurts to ask. On the other hand, vacation rental owners feel squeezed by high costs and, in some cases, mortgages that leave them holding out for top dollar as long as possible.

US visitors don’t seem deterred from travel overall.

Despite declining prices in some Airbnb markets, like Hawaii in particular, U.S. visitors don’t yet seem to be scared off from vacationing this summer or thereafter. Instead, what appears to be happening is that consumer spending remains in a shift focused on experiences like exotic travel and away from goods. The question is whether more of that visitor spending will be leaving Hawaii for places further afield.

Source : BeatOfHawaii