While Hawai'i's hotels have seen a decline in guests recently, a new study shows the state's timeshare industry remains strong with occupancy rates supported by the pre-paid vacation crowd.

Timeshare properties statewide averaged occupancy of 88.6 percent during the second quarter, or nearly 20 percentage points above the average hotel occupancy for the period, according to a report released yesterday by the American Resort Development Association's Hawai'i chapter.

The statistics drew more attention since traditional hotel occupancy has shown a decline in recent months following the overall drop in the number of visitors coming to the Islands.

"Even during downturns in tourism, timeshare continues to stand out as a reliable source of revenue for Hawai'i's economy and provide jobs for Hawai'i's people," said Mitchell Imanaka, chairman of ARDA Hawai'i.

He said timeshare owners make the commitment to come to Hawai'i when they buy their units and that makes them less likely to be discouraged by higher air fares or economic issues.

"These people are locked into their vacations because they paid for it," Imanaka said.

Imanaka said that makes these visitors a more predictable source of income while the other visitors may ebb and flow. "It's holding steady," he said.

And he said that helps supports a more steady job base — one that is not expecting layoffs.

State economist Pearl Imada Iboshi said the timeshare visitors are growing but they pay "significantly less" in state transient-accommodation tax, often referred to as the hotel-room tax.

That's because the 7.25 percent TAT tax they pay is applied only to the maintenance fee and not the room rate when timeshare owners are using the unit, Iboshi said. The maintenance fee is usually far less than an average room rate.

"At the same time, they do pay taxes on everything else they do," Iboshi added.

Hilton Hotels Corp.'s timeshare division is building the 38-story Grand Waikikian, the most visible sign of the healthy growth of the industry in Waikiki.

Bryan Klum, executive vice president Asia/Pacific of Hilton Grand Vacations Co., said timeshare is less seasonal and more predictable.

Hilton has timeshare units in two other nearby properties that were converted to timeshare units. But Klum said the Grand Waikikian "is built from the ground up as a deluxe timeshare resort."

He said timeshare travelers can use their time or exchange for another place. "They're less likely to put off a trip."

Hotel analyst Joseph Toy has been charting the growth in the timeshare industry for years. "It keeps people employed, it keeps visitors coming and spending in the market," he said.

Toy noted that timeshare properties bounce back faster from downturns that have included the Sept. 11 terror attacks and Hurricanes 'Iwa and Iniki in Hawai'i.

After Iniki, Toy said most of the state's occupancy plunged to an occupancy in the 30s.

But on Kaua'i, the strong timeshare market helped push occupancy back to 70 percent to 72 percent.

"Essentially, these are pre-paid vacations," Toy said. "If you don't use it at that time, you lose it."

Imanaka said he was impressed that the timeshare industry now include 4,500 jobs in Hawai'i. Imanaka said the industry pays hotel taxes two ways: when the owner stays in the unit, and when it is rented.

"The timeshare industry does pay its fair share of taxes," he said.