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POUNDED BY MOTHER NATURE AND RECESSION, HAWAII LODGING INDUSTRY MAY BE DOWN BUT NOT OUT

 Oahu Still Leads the Market While Outer Islands Experience
 Biggest Tourist Drop; Economic Woes in Japan and California
 Ripple Across the Pacific
 LOS ANGELES, April 7 /PRNewswire/ -- While Hawaii experienced its fourth consecutive year of hotel occupancy decline, operating levels should bottom out at 67 percent in 1993 and begin gradual growth thereafter, according to a study by the national accounting firm Kenneth Leventhal & Co. (KLCO). For the first time in more than a decade, the average hotel room rate dropped by 1.4 percent to $140.
 "California's recession has trickled down to Hawaii's lodging industry as the number of visitors from California, which generally accounts for 20 percent of travelers to the islands, declined sharply in 1992," said J. Paul DeMyer, the firm's national director of hospitality industry services. The KLCO Hawaii Tourism and Lodging Industry report tracked room occupancy for first-class, deluxe and luxury hotels.
 Hawaii has experienced a tremendous surge in visitors from the Pacific Rim region since 1987 -- actually reaching its highest level in 1992. Japan is still the most significant source of tourist business for the islands, representing 25 percent of all visitors. "Had it not been for Japan's economic woes this number would have been even greater and could possibly have offset the general downturn from the U.S., the islands' primary visitor base," DeMyer stated.
 According to the KLCO report, Oahu continues to be the state's most popular tourist destination, leading the islands with a 77 percent occupancy rate in 1992 and sustaining annual room rate increases.
 Maui followed Oahu in popularity with a 64 percent average occupancy rate in 1992. Though Maui is the only island to experience consistent annual room demand increases since 1989, development of new hotels outpaced this demand resulting in declining occupancy levels.
 The Kauai market, even before hurricane Iniki last September, was facing difficulties with a combination of an 18 percent increase in room supply and approximately 12 percent annual visitor declines since 1989.
 While developments conceived in the mid-to-late 1980s have recently opened, most projects in the planning stages have come to a halt. "This will allow a correction to the current supply/demand imbalance over the next couple of years," DeMyer said.
 -0- 4/7/93
 /EDITOR'S NOTE: To obtain a copy of the report contact Karen Diehl, 310-458-1224/
 /CONTACT: Karen Diehl of Casey & Sayre, 310-458-1224, for Kenneth Leventhal & Co./


CO: Kenneth Leventhal & Co. ST: Hawaii IN: LEI SU: ECO

JL-MS -- LA019 -- 3672 04/07/93 09:03 EDT
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Publication:PR Newswire
Date:Apr 7, 1993
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