The sky isn’t falling! Hawaii is still affordable.

Diamond Head and Punchbowl

I’ve been reading quite a few panic ridden articles that Hawaii airfare has skyrocketed. Sure the airfare has increased recently. With Aloha and ATA Airlines bowing out of business, we all knew higher airfares were coming. The situation illustrates the classic economic’s law of supply and demand.

The good news is that the cost of Hawaii accommodations has become even more reasonable. If you’ve been following the deals that I share, you’ll notice I’ve posted some phenomenal deals. (I even seen hotel deals as low as $60 per day if you don’t mind staying several blocks away from Waikiki Beach.) I’m not the only one noticing this trend. Take a look at this excerpt from this LA Times article:

Fares to Hawaii climbed dramatically after Aloha Airlines went out of business and took nearly 100,000 available seats a month out of the West Coast market.

Now, travel agents say they’re seeing some of the lowest hotel rates in years.

 

“There are some surprising deals out there,” said Chris McGinnis, editor of Expedia Travel Trendwatch, in an online research report expected to be unveiled this week. “Because fewer people are flying to Hawaii, there are significant hotel discounts.”

According to the report, summer airfares are up nearly 18% on average, while hotel rates are down 26% in Maui and 17% in Oahu.

Let’s take a closer look at that last statement and crunch some math, nerdy engineer style. Here are the factors we’ll consider:

  • Maui average hotel cost a couple months ago was around $280 per night, per my Hawaii news roundup on March 17th. The significance of this date is that it was just prior to Aloha and ATA going out of business.
  • Maui hotel rates are down 26%. (To be honest, I think this estimate might be inflated a bit, but we’ll go with it because I think Expedia probably has a little more data to work with than I do. Okay, they have a lot more data than I have.)
  • Airfare to Maui has increased by 18%.
  • Let’s assume that the national average airfare to Maui was $725 prior to Aloha and ATA going out of business. (I’m basing the rate of $725 as an estimated national average. Rates from the West Coast would cost less, while rates from the East Coast would cost more. I’m also basing this number from my own experience)

Now that we’ve laid out the factors, let’s see how much the airfare increases really impact us.

  • With rates being $280 in March and they are now projected to be 26% less – that results in a net daily rate savings of nearly $73.
  • With airfare going up 18% and a previous average of about $725, the net airfare increase is nearly $131.

So, you can see where I’m going here. Let’s say you are going on a 7 night vacation to Maui, with the lower hotel rates, you’ll save a total of $511 ($73 x 7) while your airfare only increased by $131. In the end, you save $380 in this scenario! (This savings is based on a single traveler.  Your savings will vary based on the number of people traveling in your party.)  While I don’t believe these savings are absolute, I do believe that the increase in airfare is more than offset by the decrease in hotel rates. So don’t listen to Chicken Little, the Hawaiian sky is not falling. In fact paradise may be even cheaper than before.

13 comments
  1. Great analysis! Rates have gotten so cheap, we stayed two weeks on the Big Island for a rate that would have gotten us only one week, the year before.

    The overall cost probably declines further when you consider other items. OK, so maybe your cost of gas increases, but if the hotels are hurting, then restaurants, activities, and other Hawaiian businesses are likely reducing their prices too–or at least offering more discounts.

    Even Roy’s–one of the more expensive restaurants–offers a set menu that is really good, and half the cost you would pay a la carte.

  2. Great article Sheila! – It’s so true! The airlines and hotels seem to be on a teeter-totter. (When one goes up, the other goes down) I’ve been watching this phenomenon for quite a while but never did any real research. Hawaii naturally seems to create an equilibrium in these situations and visitors continue to see good value in a Hawaii vacation year after year in spite of the temporary, local drama.

  3. Great post Sheila! The misleading thing about a lot of the national headlines is that all destinations are becoming more expensive to travel to, NOT JUST HAWAII. Airfares are rising around the world. So when you stack Hawaii up against another destination, it’s all relative…both vacations are going to end up costing you more. Of course there are cheaper places to visit, but as the saying goes, you get what you pay for. I’ve been told by visitors time and time again, you can’t find the unique culture, warm aloha spirit, and engage in the variety of experiences found in Hawaii any place else in the world. Once people get here, this becomes very apparent.

  4. Thanks, everyone, for your comments.

    I thought the data was pretty compelling. Even if you are bring a family of four, you’ll come out close to “breaking even” between increased airfare and lower hotel rates. That’s a much different picture than what’s being painted by the press about increased airfare.

    @ Andy – mmmm, Roys set menu with the molten chocolate cake. 🙂

    @ Dave – That’s an interesting phenomenon. I wonder if that applies to other destinations?

    @ golfnutn8 – good point about airfares increasing all around. Hawaii is unique. I’m living proof that going to Hawaii is a wonderfully addictive destination. That’s why I spend hours each day working on this blog writing about a place I love so much!

  5. In the situation you outlined above, each plane ticket sees an increase of $131 so one person traveling to Hawaii comes out $380 ahead.

    However… Most people will be traveling as a couple so two people would come out $249 ahead. If they brought one child, the three of them would still be $118 ahead. You would need to be traveling as a family of four before you would see a cost increase, which would only be $13.00. Not Bad! 😉

  6. Dave – that’s a great point – a family of four would end up paying a bit more. Which brings up a question, I wonder if there is any data that describes the size of the average group traveling to Hawaii? If I had to guess, I’d guess that there’s more couples traveling together than families. Of course it doesn’t feel this way when you travel to Hawaii over Easter or in the Summer when the kids are out of school. 🙂

    Still, I think you hit the nail on the head. The panic in some of the articles is really only considering one aspect – the airfare. While they’re freaking out over the airfare, they’re missing the bigger and rosier picture.

  7. Love your site – thanks for crunching the numbers. I wish HTA/OVB/HVCB were doing a better job with remedying this perception that higher airfares are making Hawaii vacations prohibitively expensive.

  8. Hi Amber – I’m glad you are enjoying Go Visit Hawaii. I’m happy to do my small part t to continue to promote Hawaii in a positive light. Thank you for your first time comment.

  9. I checked with the condo we usually stay in on Maui. We have been paying around $110 a night. It’s now listed at $79 a night through June and by the looks of her calendar they’ll be extending the offer through October. Air to Maui from San Francisco was about $700 per person, about $200 more than we’re used to. So, we’d have to stay for 2 weeks for the cost to equal what it did before. Guess we’ll just have to bite the bullet and go for 2 weeks.

    David

  10. Hi David – Isn’t that condo oceanfront? It was a deal already at $110 and wowza…now at $79? That’s tremendous.

    Woe is you to have to sacrifice 2 weeks in Maui in order to break even with the previous rates. (Just kidding about the woe part.) 🙂

    Thanks for providing us with some actual data for your situation!

  11. One thing you can do to save money on airfare is plan ahead. In most cases the cheapest airfare will be 5 or 6 months before you depart. The closer you get to departure, the more expensive the airfare will be. Planning ahead can sometimes save you several hundred dollars per seat.

    Another thing you can do to save money on airfare is keep reading this blog. If there is a good deal to be had, I’m sure Sheila find it. 😉

  12. Ya, woe to us. Yes it is ocean front. VRBO 112536 if anyone is interested. One bedroom, nice view of Haleakala and Maalaea Bay. It’s a bit cluttered but a real deal at $79. The owner has two others in the same building that she’s also renting for $79.

    There were actually some lower fares available on Alaska Airlines, but they were not exactly direct. One went from San Francisco to Seattle, change planes, then to LA, change planes, then to Honolulu, then interisland. Sort of like coming from the East Coast I bet. 🙂

    We also found a $381 fare from LA to Honolulu in October. We were thinking about flying into Honolulu and then taking the Superferry.

    Anyway we’re just doing a little “research.” Our next trip to the Islands won’t be till next March, that is unless a really good last minute deal comes along.

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