Why are Hawaii Luxury Resorts So Expensive in 2021, During the COVID Pandemic? This is a question we're hearing from some clients, who recall booking lower category rooms for less than $1000 per night pre-pandemic, and are now faced with rates for entry-level rooms at the Four Seasons Maui at Wailea, Four Seasons Hualalai, and Four Seasons Lanai of over $2000 per night for certain dates. Here are the three main reasons why the rates are so high:
1. Soaring Demand for Hawaii as Travelers Complete Vaccination
After a long winter of hunkering down during the pandemic, many Americans have been longing to travel somewhere warm. And as more and more states have opened vaccine sites more broadly, roughly 50% of adults have been fully vaccinated. That's created considerable demand for Hawaii and Mexico travel, especially from the West Coast, and for Caribbean travel, especially from the East Coast.
2. CDC COVID-19 Test Mandate Has Increased Hawaii Demand at the Expense of International
Since late 2020, even fully vaccinated Americans must take a COVID-19 test within the three days prior to the departing flight to the U.S. (see United States: Coronavirus Test Required for All International Arrivals). While many resorts are providing easy access to the required COVID-19 test right at the resort (see Hyatt: Free COVID-19 Testing at Mexico, Caribbean Resorts), the required test has travelers worried that they might test positive and be unable to take their originally booked flight back home. That isn't the case for Hawaii or for U.S. territories such as Puerto Rico or the U.S. Virgin Islands, so demand has increased for U.S. destinations.
3. Some Hawaii Hotels are Limiting Occupancy Due to Hawaii's Indoor Dining Restrictions
To be clear, the State of Hawaii hasn't limited hotels' occupancy levels. But some of the better Hawaii luxury resorts, such as Four Seasons Maui at Wailea, are voluntarily limiting their occupancy levels to 60-65%, in part due to the state's mandate of 50% capacity when it comes to indoor dining (fortunately most luxury resort restaurants have significant outdoor and/or open air seating). The voluntary capacity limitation also aims to preserve a high level of service for guests, since anyone who has stayed in Hawaii over the peak Christmas and New Year's time knows that even at the best resorts, service levels can suffer. Of course, there are high fixed costs when operating a luxury resort, particularly with the operational adjustments needed to operate safely during a pandemic, so this in turn means that rates per night are higher, so as not to operate at a loss.
Have you noticed higher rates at your favorite Hawaii luxury hotels?
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