×

Maui tops state in vacation rental availability

Maui County had the highest September vacation rental availability in the state with 312,810 unit nights — a 24 percent increase compared to a year ago, according to a vacation rental performance report released Friday.

The report, prepared by the Hawaii Tourism Authority, also showed that occupancy at Maui County vacation rentals in September mirrored Maui County hotels, 72.3 percent and 72.7 percent, respectively.

Average daily rates for vacation rental units were $228 for the month, compared to hotels’ $319.

In September, there were 312,810 unit nights available in Maui County. Last year, there were 251,489 unit nights available.

Unit nights are total nights in all available units, HTA said. Not all units in vacation rentals are available every day, unlike in a hotel or time share. A house with multiple bedrooms, which rents as a whole, is considered one unit. But if an owner rents bedrooms separately, each one is considered one unit.

Vacation rentals, especially illegal ones not in resort areas, have upset residents. Opponents have complained that vacation rentals have damaged the fabric of neighborhoods with high turnover, short-term visitors and that they have taken units off the long-term rental market in a tight housing environment.

But advocates say vacation rentals contribute nearly 30 percent of the county’s real property tax revenues and support the visitor industry.

The increase in vacation rental availability in Maui County did not surprise government leaders and hospitality industry officials.

“When you are no ka oi, everyone wants to do it,” said County Council Member Tamara Paltin, whose residency district is West Maui.

Paltin, who chairs the council’s Planning and Sustainable Land Use Committee, said she receives calls from developers seeking an increase in the number of allowable short-term rental permits in West Maui; the limit currently is 88.

One developer wanted to build luxury homes, sell them as an investment for off-island owners to vacation on Maui for part of the year and rent the homes out the rest of the year, she said.

On the flip side, Paltin said that constituents tell her they want fewer short-term rentals because having permanent neighbors is better than living next to a home that may be empty frequently. This could especially be important during emergencies when a close-knit neighborhood can band together to help each other.

Jen Russo, Maui Vacation Rental Association executive director, said Friday that the numbers didn’t surprise her because Maui County has been working on permitting short-term rentals the longest; short-term rental condos have been part of the Maui landscape since the 1960s.

“I anticipate these unit counts will drop as the county enforcement gets stronger,” she said. “Maui has a great opportunity here to lead the way for outer islands. Create a diverse tourism industry that finds the best way to make short-term rentals contribute to the well being of the island’s economy and offset the visitors utility of the island with the taxes collected and education.”

As for vacation rental visitors spending less on Maui than resort visitors, Russo said many of the vacation rental homes are high-end, going from $350 to more than $1,000 a night.

“I have a hard time believing those guests are not spending more than average,” Russo said. “We also have condos and hotels that rent for less. How are vacation rental visitors different from those folks? These visitors are interested in getting a very real Maui experience, not just a budget experience.”

The short-term rental property tax rate is higher than the hotel rate, she noted. Maui County hotels brought in 9.1 percent or $32 million in projected real property taxes this year versus 28.5 percent or $101 million for short-term rentals.

“These properties employ local landscapers, housekeepers, interior designers, real estate managers and accountants year-round,” Russo added.

Overall, the available nights for vacation rentals in the state grew 13 percent over September 2018, from 807,473 unit nights available to 913,285. Occupancy grew 2.6 percentage points from from 65.5 percent to 68.1 percent.

The vacation rental report for September does not determine or differentiate between units that are permitted or unpermitted.

The Maui Planning Department said there are 150 permitted bed-and-breakfasts, 231 permitted short-term rental homes, 10 permitted vacation rentals (that are not B&Bs or short-term vacation rentals) and approximately 6,400 lawful vacation rentals in the apartment districts.

Planning Director Michele McLean estimates there are 300 to 500 illegal operations that the county currently is investigating and enforcing.

“It’s a little like whack-a-mole; once we cite an operation and it stops operating, another one pops up somewhere else,” she said.

Maui Hotel and Lodging Association Executive Director Rod Antone said that “managing tourism is what we are all about right now.” He alluded to calls by environmental groups, local organizations and political officials to ensure the industry preaches respect for culture and helps protect natural resources from uninformed visitors.

Antone expressed concern for illegal vacation rentals not complying with rules and laws, and out of the loop with the aims of the industry.

Only Wailea/Kihei and Lahaina/Kaanapali/Napili/Kapalua had detailed breakout data in the HTA report. Wailea/ Kihei had 148,992 unit nights available last month, up 20.8 percent from 123,289 last year.

The Lahaina/Kaanapali/ Napili/Kapalua area had 127,058 available unit night stays in September, compared to 95,745 in 2018, an increase of 32.7 percent.

The average unit daily rate for South Maui was $219.34 in September, versus $195.43 last year. West Maui units average daily rate was $252.21, compared to $221.93 in 2018.

* Melissa Tanji can be reached at mtanji@mauinews.com.