HONOLULU -- With Hawaii hotel room prices increasing sharply over the past few years, suppliers at the Travel Weekly Hawaii Leadership Forum questioned whether rates were causing customers to choose competing destinations such as Mexico and the Caribbean.
Pleasant Holidays CEO Jack Richards said that while Pleasant sees a "roughly $175 to $200" premium in Hawaii room rates over those destinations, the comparison is not analogous.
"Ninety-nine percent of everything we sell in the Caribbean and Mexico is all-inclusive, so it's really not that fair," he said.
Furthermore, Richards said that when Pleasant drilled down into Hawaii visitor costs, it found that they're up because of fees outside of the room. The Hawaii accommodations tax is "what's really driving it, in our opinion."
"You have resort fees, parking fees, food and beverage costs. That is really driving the cost of the Hawaii vacation up," he added.
According to the Hawaii Department of Business, Economic Development and Tourism, per-person, per-day spending in February by U.S. visitors was $242, up from $194 in 2019.
Other executives warned that room rate hikes are already having an impact.
Kama Winters, president of Delta Vacations, said advisors have commented on high hotel rates, saying that "a few days in Hawaii is comparable to an extended stay at an all-inclusive," noting the high quality of many all-inclusives in Mexico and the Caribbean. "I think customers are making those valid value trade-offs in their minds."
ALG Vacations group president Ray Snisky also noted the high-quality resorts in competing markets and said Hawaii is one of the highest-priced destinations. Unprecedented investment has made Mexico far more competitive against Hawaii than in the past, he added.
"The quality of resorts in Mexico has skyrocketed in the last 24 months," he said. "You're seeing $1,000 a night, which Mexico has really not seen other than in very select small boutique hotels."
Classic Vacations CEO Melissa Krueger said Hawaii's five-star hotels and resorts are comparable on price to what visitors can get in Mexico and the Caribbean.
Below that, however, it's a different story.
"Four-star Hawaii is where we see Hawaii not being competitive," she said. "That's where I think some of the market share gets lost."