The shutdown of Aloha and ATA airlines as well as the rising cost of fuel combined to push Hawai'i's hotel occupancy rate in April to 69.5 percent — the lowest percentage for any April since 2003.

In addition to the drop in the occupancy rate, room revenue declined in April, according to a report from industry consultant Smith Travel Research and Hospitality Advisors LLC. The average daily rate declined 1.2 percent to $197.07, and, combined with reduced occupancy, led to a 3.2 percent drop in revenue per available room to $137.03.

The poor numbers came as no surprise to the visitor industry, which saw a 7.6 percent drop in visitor arrivals in April, to 538,428. Much of the decline is blamed on the lower number of available seats to the Islands following the closure of Aloha Airlines at the end of March and ATA in early April.

With fuel costs rising almost daily and the economy taking a turn for the worse, the outlook for the rest of the year isn't very promising.

"We anticipated a shortfall in the second quarter, but it's certainly more pronounced given what's happened to air lift," said Joseph Toy, Hospitality Advisors president and chief executive officer. "The economic news really isn't getting any better so there's certainly more concern growing."

Toy said it has become difficult to predict visitor arrivals because people are waiting until the last minute to book trips. Potential visitors are hunting for the lowest prices, he said, and many are waiting to see what special offers are being made by the hotels.

"As these campaigns grow out to these target markets, we see a lot of late pickups and that's really what the hotels are hoping for," he said.

But Toy said he doesn't expect a big turnaround this year.

"2008 is going to be a down year," Toy said. "Hopefully we'll start to regain momentum going into 2009. We're certainly more hopeful for 2009 than we are for 2008."

FUEL COSTS A NEW TWIST

Toy said the industry has recovered from down times, such as in the months following Sept. 11. But he said the current slide is different because of increasing fuel prices.

"We haven't really seen that before, which really adds to the cost of travel substantially," he said. "It's very difficult to understand long-term how this is going to play out."

One segment of the hotel industry that did see strong increases in occupancy in April was the budget properties. Bolstered in part by a 48.2 percent jump in Canadian visitors, budget properties statewide reported a 74.6 percent occupancy rate, 10.1 percentage points higher than April 2007, according to the report.

Occupancy rates at luxury hotels dropped to 71.1 percent in April, compared with 76.3 percent a year earlier. The only other category that had an increase in occupancy was the midpriced properties, which rose from 65.6 percent in April 2007 to 67.4 percent this year.

ALL ISLANDS AFFECTED

Each island saw a reduction in hotel occupancy in April when compared with the same month in 2007.

Occupancy at O'ahu hotels declined slightly by 0.5 percentage points to 71.9 percent. But the average daily rate rose 2.3 percent to $165.42 and resulted in a 1.6 percent increase in revenue per available room to $118.94.

The Big Island had the biggest occupancy decline to 54.5 percent, compared with 64.3 percent a year earlier. Occupancy at Maui hotels dropped from 71.7 percent to 70.7 percent, while Kaua'i hotels saw a 1.7 percentage point drop to 69.9 percent.

The April report surveyed 163 properties representing 47,736 rooms, or 84.5 percent of all lodging properties with 20 rooms or more.