Hawaii is one of the top vacation destinations in the world. In 2016, 8.9 million people visited the Aloha State to soak up the sun, learn the luau, practice surfing, and explore the islands’ volcanoes.
According to a Hawaii Tourism Authority report, 15% of those visitors would not have gone to Hawaii if there hadn’t been the option to stay in alternative accommodations, such as vacation rentals.
With demand for Hawaiian rental properties rising significantly, the islands are now among the top-performing markets in North America. We created a series of Vacation Rental Performance Reports for the Big Island, Maui, Oahu, and Kauai to explore these trends. If you’re an existing owner or prospective buyer, these reports will show you the rental income, nightly rates, and occupancy rates you can expect with a vacation rental in Hawaii.
The reports provide key insights into the factors that contribute to the incredible success these areas enjoy in the short-term rental market, including:
- Year-round demand for accommodations
- Growing interest in vacation rentals
- Long stays on the islands
- High average daily rates
Visitors book early and often
There’s no shortage of demand for accommodations in Hawaii, with the islands serving as a top destination for honeymooners, snowbirds, and families looking for a special vacation. On average, visitors book 3 months in advance to secure a vacation rental for their upcoming trips.
While many tourist areas have a defined high and low season, marked by booking peaks and slumps, the demand in Hawaii is steady throughout the year.
Peak season runs from December to February, when occupancy rates are at or above 80% for the average vacation rental home. Top-performing properties that earn an income in the 75th percentile see occupancy rates climb even higher, nearing 100% during those peak months.
While there’s demand for every type of home in Hawaii, our data showed that certain properties perform better than others – and it’s not always what you’d expect. Here’s a breakdown of the rental income you can earn with a vacation home in Maui, Oahu, Kauai, and the Big Island:
How much can you make owning a vacation rental on Maui?
The average rental income varies greatly by size of home, proximity to the beach, and quality of amenities. 1-bedroom vacation rentals in the 50th percentile earn about $38,490 per year, while a 3-bedroom brings in $98,688.
Meanwhile, a property that performs in the 75th percentile earns much more – $48,740 for a 1-bedroom, and $168,688 for a 3-bedroom.
Another factor that impacts the earning potential of Maui vacation homes is the long length of stays. On average, visitors spend more than 9 days on the island to make for high-value bookings.
How much can you make owning a vacation rental on Oahu?
If you list a 1-bedroom property in Oahu and you perform in the middle of the pack (50th percentile), you can expect to charge $147 per night on average, see a 75% occupancy rate, and generate $30,188 per year.
On the other end of the spectrum, a 5-bedroom property brings in $99,188 per year on average, but only sees an occupancy rate around 34%.
In this case, a lower occupancy rate isn’t necessarily a bad thing. With a significantly higher average daily rate, $653, a 5-bedroom property still makes a great income without causing a lot of wear and tear on the property.
The earning power of a vacation rental on Oahu is highly dependent on location. Guests are looking for larger vacation homes on the North Shore of Haleiwa, while a beachside studio might be the most popular in Honolulu.
How much can you make owning a vacation rental on Kauai?
The median 1-bedroom vacation rental in Kauai generates $33,004 in yearly revenue, and has an occupancy rate of 69%. A 3-bedroom property earns $54,530 in annual revenue and has a 63% occupancy rate.
On Kauai, studios outperform all other types of property in terms of popularity. The average occupancy rates is 79%. This can be attributed to the fact that studios only make up 14% of the vacation rental inventory on the island, so there’s high demand and reliable bookings year round.
Beachside condos with ocean views, lanais, and updated interiors are some of the key amenities that guests look for when booking, and contribute to the earning potential of rental homes in Kauai.
How much can you make owning a vacation rental on the Big Island?
The median 1-bedroom property on the Big Island generates $22,068 in yearly revenue, and has an occupancy rate of 68%. But surprisingly enough, studios actually perform better than 1-bedroom properties.
In most vacation destinations, a high bedroom count correlates with higher income, but bigger isn’t necessarily better on the Big Island. You can make a great income with a smaller property.
In fact, Studios are most popular properties on the Big Island, even though they only make up 12% of the vacation rental inventory. The average yearly occupancy rate for studios is 77%, and with an average daily rate of $110, they earn around $26,603 in rental income per year – more than 1 bedrooms.
Thinking about buying a second home on the Big Island, Oahu, Kauai, or Maui? Have a Hawaiian vacation property that you’re thinking about using as a vacation rental?
Download our free 2018 Vacation Rental Performance Reports for the Hawaiian Islands to see:
- Rental income potential by property size
- Average occupancy by property size
- Average daily rate by property size
- Average length of stay
- Vacation rental inventory by property size
- Occupancy rate by month
DOWNLOAD OUR HAWAIIAN ISLAND VACATION RENTAL REPORTS
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The Hawaiian Islands
Vacation Rental Performance Report
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