The Best Places for Airbnb Investment in Hawaii

For decades, Hawaii has been a popular tourist destination for travelers from around the globe. Taking into account the rapid growth of the short-term rental market, there is no surprise that Airbnb entrepreneurs are thriving in the state. However, the state is large, and a host that wishes to enter the market has to choose a location first. In the article, we will review the most popular places and analyze the key metrics for short-term rentals there.

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The list of the most profitable markets for Airbnb in Hawaii

Cities	Revenue
Kapolei	$10,135
Kamuela	$9,800
Hanalei	$9,600
Koloa	$8,616
Kahuku	$8,400
Lahaina	$8,000
Princeville	$6,415
Haleiwa	$6,237
Kihei	$6,150
Haiku	$6,031
Lihue	$6,000
Wailuku	$5,836
Kapaa	$5,819
Hauula	$5,787
Waikoloa	$5,570
Kailua	$5,353
Kahului	$4,831
Volcano	$4,300
Captain Cook	$4,125
Honolulu	$3,985

Kapolei

Located west of Honolulu, Kapolei is a rather luxurious resort that has been gaining momentum for the past couple of years. As of right now, this commune is the best location in all of Hawaii in terms of Revenue, as local hosts averagely make $10,135 per month.

Even though there are only around 600 active rentals here, the competition is rather intense, as most properties are densely populating a small area. The Average Daily Rate here is $600, while the Occupancy Rate averages 84%, making it an attractive destination for hosts.

Hanalei

Hanalei is an area on one of the smaller islands. It is home to only around 300 vacation rentals, meaning the competition is not as severe in this region. What is even better, the properties are spread across the shore, allowing local hosts to have fewer active neighboring Airbnbs.

The Average Daily Rate here is $546, while the Occupancy Rate is even higher than in the previous regions, as it averages 87%. The revenues are also quite decent, as they average $9,600 throughout the year. Even though it is lower than with the previous region, the lack of intense competition will surely compensate for that.

Kamuela

Commonly referred to as Waimea, Kamuela is a relatively small location in Hawaii County. Located in the northern part of the island, it is home to around 750 active vacation rentals. The Average Daily Rate for hosts here is $636 throughout the year, while the occupancy rate is the same as with Kapolei, as it averages 84%. As for the revenues, they are pretty decent here, as they average $9,800 per month, reaching it’s peak of $12,200 in July. Even though its Occupancy Rate is lower than in some other areas, the Revenues compensate for it fully.

Koloa

In contrast to Hanalei, Koloa is a much more competitive region. There are around 1,750 active Airbnbs here, though the Occupancy Rate is also 87%. The Average Daily Rate here is $468, while the Revenues of local hosts average $8,616 per month, which is still one of the best results in all of Hawaii. The only drawback of Koloa for hosts relates to the fluctuation of Revenue, as it goes down from $10,620 in July to $6,600 in September.

Kahuku

The market conditions in Kahuku are rather interesting to look at. Even though there are only around 400 active vacation rentals, it is still considered to be a very competitive area. This is related to the vast majority of listings densely packed Kawela Bay, while only around thirty properties are located outside and do not seem to attract as many tourists.

The Average Daily Rate here is $408, which is considerably lower than in most other places, but the Occupancy Rate still averages 87%. The average monthly Revenue of local hosts is $8,400.

Lahaina

Lahaina is the largest region we have reviewed so far, so there is no surprise it is home to 5,500 active vacation rentals. The good news is that these listings are scattered across the shore, meaning the competition is quite average here. The ADR metric in Lahaina fluctuates between $353 in September and $467 in July, averaging $420 throughout the year.

The Occupancy Rate is even higher than in the previous regions, as it is 89% here. This, once again, indicates that the competition is not as severe. The Revenue of local hosts averages $8,000.

Princeville

Princeville is located right next to Hanalei, which we have already reviewed, but the metrics here are not similar to the ones of Hanalei at all. It is a smaller and less prestigious area, so the Average Daily Rate here is only $346, almost 50% lower than in Hanalei. The tourists seem to enjoy this alternative, as the Occupancy Rate here is 90%.

As you might expect, the Revenues here are lower, as they only average $6,415 throughout the year. It is still decent, especially, taking into account the lower costs of properties in Princeville. In case you were looking for a stable location with medium competition, Princeville might be the choice for you.

Haleiwa

Haleiwa is located right next to Kahuku, but in contrast to the previous region we have reviewed, these two have similar metrics. The Average Daily Rate in Haleiwa is $401, while the Occupancy Rate here is 89%. The Revenues are $6,237, which is still rather decent.

The main benefit of Haleiwa is the low number of competitors you will have to deal with as an Airbnb host. In total, there are only around 450 active listings here, most of which are spread across a relatively large area.

Lihue

Lihue is almost the opposite of Kihei in terms of local competition. Here, you will only find around 400 active listings spread across a large area. The other metrics, however, are relatively strong, compared to other regions. For example, the Average Daily Rate here is $303, while the Occupancy Rate averages 90%. At the same time, the average monthly Revenue throughout the year is $6,000. This makes Lihue an interesting opportunity for launching an Airbnb, as it seems to be a decent location with a rather untapped market.

Haiku

Speaking of places with reduced competition, Haiku is almost a perfect example of this. It has only 136 active rentals spread across a rather large area, while the other metrics are still decent. For instance, the Average Daily Rate here is $331, while the Occupancy Rate averages a whopping 93%. The Revenue here is $6,031, making it one of the most attractive investment opportunities in 2022.

Kihei

It is fair to consider Kihei a very competitive region of Hawaii, as it is home to around 4,800 active vacation rentals that are all located on the shore of Maalaea Bay. Thanks to this competition, the Average Daily Rate in Kihei is only $324, although it is compensated for by the Occupancy Rate of 90%. The Revenues of Airbnb hosts in this region average $6,150.

Hauula

The situation with Hauula is similar to the previous region, as there are only around 230 active rentals here. The region is less prestigious, so the Average Daily Rate here is only $276. The Occupancy Rate, however, is still pleasant, as it averages 89%. The Revenue of $5,787 per month might be lower than in some other locations, but it still has all the necessary potential to become a successful place to start a business.

Wailuku

Wailuku has a rather unique geographical position, where it covers both the northern and the southern shores of the island. Out of all 423 local Airbnbs, around 370 are located in Maalaea, which is in the south. The Average Daily Rate here is $297, while the Occupancy Rate is 90%. The Revenues of local enterprises are $5,836 per month. Even though the region provides the tourists with access to the same Maalaea Bay that Kihei does, it did not yet manage to reach the same metrics.

Kapaa

Located right next to Lihue, Kapaa features almost the same metrics. It is home to twice as many active rentals, as there are currently around 950 listings on Airbnb and VRBO. The Average Daily Rate in Kapaa is $296 and its Occupancy Rate is 90%. The monthly Revenue here drops from $6,879 in May to $4,698 in September, averaging $5,819 throughout the year. Even though there are some rentals available closer to the center of the island, most of the properties are located right next to the beaches of Kapaa.

Waikoloa

In contrast to Kapaa, Waikoloa has almost 30% of its listings located at a distance from the shores. In total, there are also around 950 active Airbnbs here, while the Average Daily Rate is relatively high, as it averages $368. The Occupancy Rate is lower than in some other regions, as it is subject to strong seasonal effects. In February, it reaches 91%, while in September it drops all the way down to 63%.

The hosts receive $5,570 worth of monthly income on average here, which is lower than in most other regions of Hawaii. It is surely a more risky investment compared to regions with higher occupancy rates, but it may be a decent location for a seasonal rental business when the demand is at its peak.

Kailua

Kailua is less populated with short-term vacation rentals than most other locations in Hawaii, as it is only home to around 370 active businesses. Most of them are entire homes that can accept up to six guests and are scattered around the shores of Kailua Bay. It is surely not the most popular tourist destination in Hawaii, though it manages to provide local hosts with an average Occupancy Rate of 90%. The average monthly Revenue of hosts in Kailua is $5,353. It is also one of the few locations that offer some interesting attractions in the city, as well as a beautiful wildlife sanctuary.

Kahului

Kahului is by far the least competitive region of Hawaii, as there are only around 130 active listings here. Another interesting fact about it is that around 22% of the listings in the area are private rooms, which is quite rare for Hawaii. The Average Daily Rate here is $324, but the average Occupancy Rate is only 77%. The average monthly Revenue of local hosts is $4,831 throughout the year.

It would also be fair to say that it is one of the most seasonal locations in Hawaii, as the metrics fluctuate dramatically. For example, the Occupancy Rate almost reaches 100% in May but drops all the way down to 24% in August. The same goes for the Revenues, which peak at $9,200 in July and drop to $1,744 in January.

Volcano

Volcano is perhaps the cheapest option for tourists across Hawaii, as the ADR here is only $195. It is located in the center of the island with no access to the shores, but it manages to attract some tourists with its Volcanoes National Park. The Occupancy Rate of 90% is partially explained by the popularity of this destination among visitors and partially by the extremely low prices of Airbnbs in the area. The average monthly Revenue in Volcano is around $4,300.

Captain Cook

Captain Cook is an area that would be perfect for tourists who are looking for a quiet vacation on the shores of Hawaii. The Average Daily Rate here is only $228, which is almost the cheapest option you can find. The Occupancy Rate is also pretty high, as it averages 90%. The best part about it from the perspective of a host is that you will only have to deal with 240 competitors that are spread across a large area. The Revenues are perhaps not as impressive, as they only average $4,125 per month.

Honolulu

Even though Honolulu is one of the most desired tourist destinations in Hawaii, it might not be the best option for hosts. The competition here is severe, as you will need to deal with more than 7,600 active rentals. Even though the area is large, there will still be some alternatives for guests right beside your property.

The Average Daily Rate is extremely low because of this competition, averaging only $214. The Occupancy Rate might also not be as impressive, as the market is oversaturated and it averages 83% throughout the year. The monthly Revenue of an average host in Honolulu is only $3,985. The only benefit this location has to offer is the large sample size for these metrics. It means you will reach these numbers more likely than in any other region of Hawaii, but the numbers themselves are not as decent as in some other locations.

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