Airbnb Honolulu, Hawaii: Market Data, Laws & Investor Guide

Honolulu, Hawaii is a dream destination for travelers from around the world, with its stunning beaches, vibrant culture, and year-round warm weather. As the demand for authentic, local experiences continues to rise, starting an Airbnb business in Honolulu presents a lucrative opportunity for entrepreneurs in 2024.

In 2023, Hawaii welcomed over 10 million visitors, with Honolulu being the most popular destination. The city's tourism industry is thriving, with an average hotel occupancy rate of 84% and daily rates reaching $371. However, many travelers are seeking alternatives to traditional hotels, preferring the unique, personalized experiences that Airbnb offers.

Airbnb has seen tremendous growth in Honolulu, with the number of listings increasing by 25% in 2023 alone. Hosts in the city are earning an average of $3,500 per month, with some properties generating over $10,000 during peak seasons. This impressive earning potential, combined with the city's strong tourism market, makes Honolulu an ideal location to start your Airbnb business.

Moreover, Honolulu's diverse neighborhoods offer a range of opportunities for Airbnb hosts. From the bustling streets of Waikiki to the laid-back charm of Kailua, there's a perfect spot for every type of traveler. By offering a unique, locally-inspired experience, your Airbnb can stand out in a competitive market and attract guests from around the world.

Honolulu Short-Term Rental Market Analysis

Honolulu, the capital of Hawaii, is a popular tourist destination known for its stunning beaches, vibrant culture, and year-round warm weather. The city's short-term rental market has experienced significant growth in recent years, making it an attractive option for investors and entrepreneurs looking to start an Airbnb business.

Occupancy Rate, Nightly Rate, and Seasonality

According to AirDNA, in March 2024, the occupancy rate for vacation rentals in Honolulu was 57.4%, with an average daily rate of $337. The city experiences a high level of seasonality, with peak months being June through August and December through February.

Key Airbnb market data for Honolulu in 2024 so far:

• Average occupancy rate: 68%
• Average daily rate: $335
• Average Annual revenue: $83,200

Growth Rate and Tourism Industry

Honolulu's tourism industry has been growing steadily over the past few years. In 2023, Hawaii welcomed over 10 million visitors, with Honolulu being the most popular destination. The city's tourism industry increased at a prolific CAGR since 2009 compared to the revenue passengers flown.

The number of Airbnb listings in Honolulu has also been increasing, with a 25% growth in 2023 alone. Hosts in the city are earning an average of $3,500 per month, with some properties generating over $10,000 during peak seasons.

Key Dates and Events

Honolulu hosts numerous festivals and events throughout the year that attract visitors from around the world. Some notable events include:

1. Waikīkī Steel Guitar Week (July 8-13, 2024)
2. Prince Lot Hula Festival (July 20, 2024)
3. Duke Kahanamoku Ocean Festival (August 17-25, 2024)
4. Aloha Festivals (September 2024)
5. Honolulu Marathon (December 8, 2024)

Booking Durations and Mid-Term Rentals

According to Airbnb host forums, the average booking duration in Honolulu is around 5-7 nights, with longer stays more common during the summer months and holiday seasons. The city also has a strong mid-term rental market, with many travelers booking stays of 30 days or more.

Airbnb hosts in Honolulu have reported that offering discounts for longer stays and providing amenities such as fully-equipped kitchens and laundry facilities can help attract mid-term renters.

In conclusion, Honolulu's short-term rental market presents a lucrative opportunity for investors and entrepreneurs in 2024. With its growing tourism industry, high occupancy rates, and strong mid-term rental market, the city is well-positioned for continued success in the years to come.

Best Neighborhoods in Honolulu for an Airbnb Business

When searching for the ideal location to start an Airbnb in Honolulu, hosts should consider factors such as proximity to popular attractions, tourist hotspots, and up-and-coming areas. By analyzing data from reputable sources, as well as incorporating local knowledge, we've identified the top 5 neighborhoods in Honolulu for starting a successful Airbnb business.

Waikiki

As the most popular tourist destination in Honolulu, Waikiki is an obvious choice for Airbnb hosts. With its world-famous beach, vibrant nightlife, and abundance of shopping and dining options, Waikiki attracts millions of visitors each year.

1. Average Occupancy Rate: 78%
2. Average Daily Rate: $245
3. Airbnb Seasonality: High season from June to August, with a peak in July
4. Estimated Annual Revenue: $69,800

According to Zillow, the median home value in Waikiki is $695,000 as of August 2024. For optimal return on investment, consider investing in a one-bedroom or studio apartment, as these tend to have the highest occupancy rates and generate the most revenue per square foot.

Kailua

Located on the windward side of Oahu, Kailua offers a more laid-back atmosphere compared to Waikiki. With its beautiful beaches, outdoor activities, and close proximity to attractions like the Lanikai Pillbox Hike, Kailua is becoming increasingly popular among tourists seeking a more authentic Hawaiian experience.

1. Average Occupancy Rate: 72%
2. Average Daily Rate: $275
3. Airbnb Seasonality: High season from June to August, with a peak in July
4. Estimated Annual Revenue: $72,300

The median home value in Kailua is $1,100,000 as of August 2024. Two-bedroom properties provide the best balance between occupancy rates and nightly rates, making them a solid choice for Airbnb investors in this area.

Kakaako

Kakaako is an up-and-coming neighborhood located between Downtown Honolulu and Waikiki. With its vibrant street art scene, trendy restaurants, and proximity to popular attractions like Ala Moana Beach Park and the Ward Village shopping center, Kakaako is attracting a growing number of tourists.

1. Average Occupancy Rate: 70%
2. Average Daily Rate: $200
3. Airbnb Seasonality: Consistent demand throughout the year, with slight peaks during summer months
4. Estimated Annual Revenue: $51,100

The median home value in Kakaako is $580,000 as of August 2024. One-bedroom and studio apartments are the most popular among Airbnb guests in this area, offering a good return on investment for hosts.

North Shore

The North Shore of Oahu is famous for its stunning beaches, laid-back vibe, and world-class surfing. With attractions like the Polynesian Cultural Center, Waimea Valley, and the charming town of Haleiwa, the North Shore is a popular destination for tourists seeking a more authentic Hawaiian experience.

1. Average Occupancy Rate: 68%
2. Average Daily Rate: $300
3. Airbnb Seasonality: High season from November to February, coinciding with the peak surfing season
4. Estimated Annual Revenue: $75,000

The median home value on the North Shore is $950,000 as of August 2024 (Zillow). Two-bedroom properties are the most popular among Airbnb guests in this area, offering a good balance between occupancy rates and nightly rates.

Hawaii Kai

Hawaii Kai is an affluent neighborhood located on the eastern side of Honolulu. With its scenic beaches, hiking trails, and proximity to attractions like Hanauma Bay and the Koko Crater Trail, Hawaii Kai is becoming increasingly popular among tourists seeking a more upscale and nature-oriented experience.

1. Average Occupancy Rate: 65%
2. Average Daily Rate: $350
3. Airbnb Seasonality: High season from June to August, with a peak in July
4. Estimated Annual Revenue: $83,000

The median home value in Hawaii Kai is $1,300,000 as of August 2024. Three-bedroom properties provide the best return on investment in this area, as they can accommodate larger groups and command higher nightly rates.

By considering these top neighborhoods and their respective data, Airbnb hosts can make informed decisions when investing in a property in Honolulu. Remember to also factor in local regulations, property management costs, and your own personal preferences when choosing the perfect location for your Airbnb business.

Maximizing Your Revenue Through In-Demand Amenities and Properties in Honolulu

To maximize your revenue as an Airbnb host in Honolulu, it's essential to set competitive prices and offer in-demand amenities. By analyzing the best-performing listings in the city, you can identify trends and implement strategies to help your property stand out in a competitive market.

Setting Competitive Prices

When setting your nightly rates, consider factors such as seasonality, demand, and the prices of similar listings in your area. Honolulu experiences a high season from June to August and December to February, so you can adjust your prices accordingly during these periods. Use dynamic pricing tools to automatically optimize your rates based on market conditions.

It's also important to monitor your competitors' prices regularly. Aim to price your listing slightly below the average for similar properties in your area to attract more bookings. However, be careful not to undervalue your property, as this can lead to lower perceived value and decreased revenue.

In-Demand Amenities

Based on an analysis of top-performing Airbnb listings in Honolulu, the following amenities are highly sought-after by guests:

1. Air conditioning: With Honolulu's warm climate, air conditioning is a must-have for most guests.
2. Pool or beach access: Properties with direct access to a pool or the beach are highly desirable.
3. Balcony or outdoor space: Guests appreciate the ability to enjoy Honolulu's beautiful weather and scenery from a private balcony or patio.
4. Full kitchen: Many travelers prefer the convenience and cost-savings of preparing their own meals, making a well-equipped kitchen a valuable amenity.
5. Washer and dryer: Having laundry facilities on-site is especially important for longer stays and families with children.

To maximize your revenue, consider investing in these amenities if your property doesn't already have them. Highlight these features prominently in your listing description and photos to attract potential guests.

Popular Property Types and Revenue Potential

In Honolulu, condos and apartments are the most popular property types for short-term rentals. According to AirDNA data for March 2024, the average occupancy rate for vacation rentals in Honolulu was 57.4%, with an average daily rate of $337.

Here's a breakdown of average property prices and potential revenue by bedroom count:

1. Studio: Median home value of $153,000; estimated annual revenue of $40,201
2. 1-bedroom: Median home value of $175,000; estimated annual revenue of $47,631
3. 2-bedroom: Median home value of $295,000; estimated annual revenue of $71,092; 94% occupancy rate; $174 average daily rate
4. 3-bedroom: Median home value of $1,300,000 in Hawaii Kai; provides the best return on investment in this area

Keep in mind that these figures are averages, and individual properties may perform better or worse depending on factors such as location, amenities, and marketing strategies.

By setting competitive prices, offering in-demand amenities, and investing in popular property types, you can maximize your revenue as an Airbnb host in Honolulu. Stay up-to-date on market trends and continually adapt your strategies to ensure long-term success in this dynamic industry.

Understanding Honolulu Short-Term Rental Regulations

Honolulu, Hawaii has stringent short-term rental regulations that are carefully enforced to ensure compliance with local laws and zoning ordinances. Short-term vacation rentals on Oahu are only permitted in specific resort-zoned areas and certain apartment-zoned areas, with strict conditions on occupancy limits and rental durations. Property owners must adhere to all regulations and pay the relevant taxes to operate legally.

To start a short-term rental business in Honolulu, owners must research the applicable regulations and zoning laws, obtain a non-conforming use certificate, comply with safety regulations, and apply for a short-term rental license from the City and County of Honolulu. The licensing process requires a significant amount of documentation, including a detailed site plan, proof of ownership, a description of the proposed use, and additional documents such as a fire safety plan, noise mitigation plan, and proof of insurance.

Short-term rental operators in Honolulu are subject to state and county transient accommodations tax (TAT) and general excise tax (GET) based on gross rental proceeds. Operators must register with the state's Department of Taxation, file regular tax returns, and pay county taxes to Honolulu tax authorities and state taxes to state authorities.

Despite recent legal challenges, such as Honolulu's Bill 41, existing short-term rentals have been allowed to continue operations following a federal judge's ruling. However, the city has been cracking down on illegal short-term rentals, issuing significant fines to violators.

Read our full STR regulations guide for more detailed information about Honolulu's short-term rental regulations, including insights from local hosts and a closer look at other policies.

Keys to Success as a Honolulu Airbnb Host

Starting an Airbnb business in Honolulu can be a rewarding and profitable venture, but it requires careful planning, attention to detail, and a commitment to providing exceptional guest experiences. By understanding the local market, offering in-demand amenities, and following best practices for short-term rental management, you can set yourself up for success in this competitive industry. In this section, we'll explore some key strategies for thriving as an Airbnb host in Honolulu.

Popular Amenities and Design Themes in Honolulu

To attract guests and maximize your revenue, it's essential to offer amenities that cater to the preferences of travelers visiting Honolulu. Some popular amenities include air conditioning, pool or beach access, outdoor spaces like balconies or patios, fully-equipped kitchens, and laundry facilities. Incorporating local design elements, such as tropical decor, Hawaiian-inspired artwork, and natural materials like wood and stone, can help create an authentic and memorable experience for your guests.

How to Attract Honolulu Customers

To stand out in a competitive market, focus on creating a unique and compelling listing that showcases your property's best features. Use high-quality photos and detailed descriptions to highlight your amenities, location, and local attractions. Emphasize your proximity to popular destinations like Waikiki Beach, Diamond Head, and the Honolulu Zoo. Consider offering special packages or discounts during slower periods to attract more bookings.

Engage with potential guests promptly and professionally, answering any questions they may have about your property or the surrounding area. Maintain a high response rate and positive reviews by providing excellent communication and customer service throughout the booking process and during their stay.

Potential Challenges and Guidelines for Success

While operating an Airbnb in Honolulu can be highly profitable, it's important to be aware of potential challenges and risks. One of the biggest challenges is navigating the city's strict short-term rental regulations. According to hosts on the Airbnb forum, it's crucial to thoroughly research and comply with all local laws and zoning requirements to avoid fines and legal issues.

Another potential challenge is managing guest expectations and maintaining a high standard of cleanliness and maintenance. "Cleanliness is key," advises one experienced Honolulu host on BiggerPockets. "Hire a reliable cleaning service and conduct regular inspections to ensure your property is always guest-ready."

To minimize risks and ensure a smooth operation, consider the following guidelines:

• Invest in high-quality furnishings and amenities that can withstand frequent use and wear.
• Establish clear house rules and communicate them to guests before and during their stay.
• Be proactive in addressing any maintenance issues or guest concerns to prevent negative reviews.
• Maintain open lines of communication with your neighbors and local authorities to address any concerns and maintain positive relationships.
• Regularly review and adjust your pricing strategy based on market conditions and seasonality.

By following these guidelines and adapting to the unique challenges of the Honolulu market, you can build a successful and sustainable Airbnb business in this beautiful and dynamic city.

Using BNBCalc to Find Profitable Properties in Honolulu, Hawaii

Investing in a short-term rental property in Honolulu can be a lucrative venture, but it's essential to conduct thorough research and analysis to ensure profitability. BNBCalc is a powerful tool that can help aspiring business owners identify the most promising investment opportunities in Honolulu's competitive market. By leveraging BNBCalc's features and following a strategic approach, you can maximize your chances of success in the short-term rental industry.

Analyze Properties Using BNBCalc

BNBCalc's property analysis tool allows you to input key details about a potential investment property, such as the purchase price, number of bedrooms and bathrooms, and estimated occupancy rate. The tool then calculates the projected revenue, expenses, and cash flow, providing a clear picture of the property's profitability. By analyzing multiple properties using BNBCalc, you can quickly compare and identify the most promising investment opportunities in Honolulu.

Benchmark Comparable Rentals

To ensure your short-term rental stands out in Honolulu's competitive market, it's crucial to benchmark your property against comparable rentals in the area. BNBCalc's market research feature allows you to see nearby rentals and analyze their performance, including occupancy rates, nightly rates, and revenue. By studying successful listings, you can identify best practices and strategies to implement in your own rental, helping you fetch top dollar and maximize your returns.

Determine The Right Price and Property Size

BNBCalc's investment property calculator can help you determine the optimal number of bedrooms, bathrooms, and purchase price to maximize your revenue potential. By inputting different scenarios and analyzing the projected returns, you can identify the sweet spot that balances investment costs with potential earnings. This data-driven approach ensures you make informed decisions when selecting a property to invest in.

Make an Offer

Once you've identified a promising investment opportunity using BNBCalc's analysis tools, it's time to make an offer. BNBCalc has partnered with STR lenders to help investors get prequalified for financing. Our team recommends working with Brian Bockholdt at Alliant Credit Union, who offers some of the lowest rates in the industry. By securing financing and making a competitive offer, you can take the first step towards owning a profitable short-term rental in Honolulu.

Use Our Tax Calculator

Owning a short-term rental can provide significant tax benefits, including deductions for expenses and bonus depreciation. BNBCalc's tax calculator helps you estimate your potential tax savings, allowing you to factor these benefits into your overall investment strategy. By understanding the tax implications of your short-term rental, you can make more informed decisions and maximize your returns.

Come Up With a Buy Box

A buy box is a set of criteria that defines your ideal investment property. When creating a buy box for a short-term rental in Honolulu, consider factors such as:

• Location: Focus on properties in popular tourist areas, near beaches, attractions, and amenities.
• Property type: Condos and apartments are the most popular choices for short-term rentals in Honolulu.
• Occupancy rate: Look for properties with a proven track record of high occupancy rates.
• Revenue potential: Use BNBCalc's tools to identify properties with strong projected returns.
• Condition: Prioritize move-in ready properties to minimize upfront renovation costs.

By establishing a clear buy box and using BNBCalc's powerful analysis tools, you can streamline your investment process and focus on the most promising opportunities in Honolulu's short-term rental market.

Ready to start your Airbnb journey in Honolulu? Use BNBCalc to analyze potential properties and make informed investment decisions. Our powerful tool provides comprehensive data to help you maximize your profits. Check out this pre-analyzed Honolulu Airbnb opportunity and see how BNBCalc can help you succeed in the short-term rental market. Visit BNBCalc.com today and take the first step towards building your Airbnb business.