Occupancy
rates for Hawaii fared worse than the national average in 2008 due to
the economic downturn and a weak performance during the peak summer
season, according to a report released yesterday by Ernst & Young LLP.

Based on year-to-date data from Smith Travel Research,
Hawaii's overall occupancy decreased 4.5 percentage points to 70.8
percent. While average daily room rates increased by 1 percent to $202,
revenue per available room dropped by 5 percent to $143.

Most
cities experienced declines in U.S. lodging demand and occupancy last
year, as well as slowing growth in key metrics such as average daily
room rates (ADR) and revenue per available room (RevPAR); however, the
national average for occupancy declined only 4.3 percent.

Phoenix,
Atlanta and Chicago joined Hawaii in falling below the national
average. Meanwhile, Los Angeles; New Orleans; San Francisco; Miami;
Manhattan, N.Y.; Dallas; Ft. Lauderdale, Fla.; Washington, D.C.;
Philadelphia; Boston; Orlando, Fla.; Las Vegas and San Diego fared
better.

Hotel
markets across the world are expected to experience continued economic
pressure and reduced leisure and business travel in 2009, the Ernst
& Young report said.

"There
is little doubt that most markets in the current economic climate are
challenging at best and growth will be hard to come by for most
operators," said Michael Fishbin, Ernst & Young's national director
of hospitality services. "As a result, this year we will see hotel
operators continue to focus more of their energies on cost reduction,
improving operating efficiencies in their hotels, reaching out to
guests via enhanced Internet communication and strengthening their
brands through an emphasis on green principles in activities related to
both development and operations."

By Allison Schaefers