The backlash from companies holding expensive junkets and conventions while receiving federal bail out money is taking it's toll on hotel revenue as groups cancel their conventions in droves.

Wall Street Journal Article

The interesting point made here is that "Hotels are Businesses Too". All of these cancellations are going to take their toll on the employees who will be laid off as hoteliers try to decrease their overhead as their revenue numbers decline.

The silver lining for us homeowners at the Beach Villas at Ko Olina (who rent out our villas) is that we were never setup for conventions and groups so we don't have this business to loose. To attract group bookings we need the food & beverage component along with conference rooms.

The bulk of our business comes from individual families or small groups of families traveling together who are looking for luxurious accommodations at a "value" price. By value I mean we have $400.00 - $800.00 rates instead of $1,500.00 - $2,500.00 per night rates. Not $200.00 per night rates for a two or three bedroom suite.

So we have a couple of challenges:

While hotels in Hawaii are crying because their 98% occupancy levels have fallen into the 70%'s, I don't know if we we'll every be able to achieve 75% to 95% occupancy on a consistant basis since hotels use group bookings and conventions to smooth out occupancy during slower times of the year.

With lower purchase prices being touted for the June sales event, with all things being equal, you won't have to rent out as many nights as before.

The other challenge for us is in our ability to cut expenses which is limited by the sales agreements we signed with the developer when we purchased our villas. Some of the language may preclude us from being able to do any meaningful cost cutting which could then be reflected in lower Home Owners Association (HOA) fees.

Again, with the lower purchase prices for the June sales event, the savings in mortgage payments will offset the HOA dues. Not so lucky for us current homeowners.

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Please allow me to represent you as your buyers agent on selection day. There is no cost to you and your purchase price is exactly the same. What you select and how much you pay will make a big difference in your profitability; both from an appreciation standpoint and if renting, covering expenses. Afterwards, we can also work together to "get heads in beds".

(All of the thoughts expressed in this blog are my own personal opinion, they are no guarantee that you will achieve similar results, it's just me sharing my own experiences and what has happened in my own situation. I cannot know what will happen in the future.)