New Travel Tech Study: Alternative Accommodations Critical to Oahu Economy
Travel Tech on July 24, 2018
For Immediate Release
Alternative Accommodations Critical to Oahu Economy, Study Finds
Local economy could lose $1.2 billion and risk 7,000 jobs if alternative accommodations were severely restricted
HONOLULU, HI – A new study released today, commissioned by The Travel Technology Association (Travel Tech) and conducted by local economic consulting firm Kloninger & Sims, finds that severe restrictions on Oahu’s alternative accommodations would have a devastating impact to the local economy. The study is in conjunction with both Expedia and Airbnb.
According to the Kloninger study, 60% of Oahu’s alternative accommodations are located outside of resort-zoned areas. Without alternative accommodations outside of resort zoning, Oahu would stand to lose the following on an annual basis:
$336 million in household income
$1.2 billion in economic activity
“Alternative accommodations are playing an increasingly vital role in Oahu’s visitor industry as more guests travel to the island and hotel occupancy rates are near max capacity,” said Erik Kloninger, Principal at Kloninger & Sims LLC and lead researcher of the study. “Efforts by lawmakers to significantly reduce the number of accommodations will have a significant effect on the island’s economy and hurt hundreds of local businesses that benefit from the revenue these visitors bring in,” he added.
“TravelTech and our members are committed to working with local leaders and elected officials to find a regulatory solution that balances the economic welfare of residents and business on Oahu with the industry’s impact to neighborhoods and local character,” said Matt Kiesling of TravelTech. “It’s important to find the right framework that will benefit everyone.”
In addition to alternative accommodation hosts and guests visiting Oahu, small businesses throughout on the island would feel the hit, the report shows.
"There is already a limited amount of accommodation options for visitors to stay on the windward side. If we reduce these options further, it will discourage these visitors from coming to our neighborhoods and it will definitely have a negative impact on our business" said Peter Anderson of Morning Brew Coffee.
Oahu’s economy has benefited from recent increases in airlift to the island, which could be undermined if severely restrictive legislation is passed, the study found.
“A drastic reduction in the supply of Alternative Accommodations on O’ahu would have substantial negative impact on visitor spending, as well as on household income, state taxes, employment and airlift.
Additional Key Findings:
Of the $1.1 billion in estimated direct visitor spending by those staying in alternative accommodations on Oahu in 2017, about $643 million of that represented non-loding spending (retail, food, entertainment and ground transportation);
$77 million in direct TAT and GET would be lost if Alternative Accommodations were eliminated on Oahu;
$659 million in direct visitor spending would be put at risk if Alternative Accommodations were eliminated
“With about one in every seven visitors to Oahu using alternative accommodations in 2017, it’s important to ensure that regulations are keeping pace with what the local economy needs,” added Kloninger.
Kloninger & Sims Consulting LLC was retained by Airbnb to analyze the short-term rental industry’s contribution to Hawaii’s economy. With over 15 years of experience in tourism and real estate consulting in Hawaii, Erik Kloninger is a principal at Kloninger & Sims Consulting LLC. He has worked in the hospitality consulting practings of PKF-Hawaii, PricewaterhouseCoopers and Hospitality Advisors and on projects related to most of the major hotels in Hawaii, all of the Ali’i trusts, the Hawaii Tourism Authority and county governments.