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Vacation Rental Occupancy Rates Outperform Hotels Since October

Catherine Cruz/HPR

HONOLULU — Hawai‘i's vacation rental market has outperformed hotels in occupancy rates in every month since October.

Vacation rental owners across the state have said the higher demand was prompted by pandemic-related attitude shifts that prioritize space and seclusion for getaways, the Honolulu Star-Advertiser reported Monday.

Other rental home operators have said that the pandemic-induced reduction in some hotel services, such as daily housekeeping, has decreased the service gap between homes and vacation rentals, the newspaper reported.

Matt Beall, the CEO of the full-service real estate brokerage Hawaii Life, said the company is enjoying its best year on record for vacation rentals.

The dramatic demand increase happened as some counties attempted to regulate the industry.

A public hearing organized by the Honolulu Department of Planning and Permitting on draft rules to regulate and register short-term rentals on Oahu is scheduled for Tuesday.

The hearing stems from an ordinance that required the city department to adopt rules to limit the number of vacation rentals outside of permitted areas, such as the resort destinations of Waikiki, Ko Olina and Turtle Bay.

The department said it expects to review comments from the public hearing and adopt a final draft before Aug. 1.

Longtime hotelier Jerry Gibson said regulating vacation rentals is important for state residents and to aid job recovery for hotel workers.

“Vacation rental occupancy was 7 percentage points higher than hotel occupancy in 2020,” Gibson said. “The current situation is impacting job recovery for hotels. It’s also affecting resident sentiment. The general public would rather have people in the tourism zones than in their neighborhood.”

Andreea Grigore, a co-founder of the Hawaii Legal Short-Term Rental Alliance, said every island has set reasonable limits for the legal vacation rental supply.

“Our goal is to work hand-in-hand with government officials to stop the proliferation of illegal vacation rentals and therefore contribute to the responsible management of tourism in Hawaii,” Grigore said.

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