More choices for tourists are translating into fewer rooms filled at hotels and the first drop in Hawai'i's hotel revenue in five years.

For the first half of 2007, statewide hotel room revenue was $1.5 billion, a 2 percent decrease from the same period last year, according to a report by Hospitality Advisors LLC. Hotels across the state reported declines in occupancy despite increases in visitor arrivals, the report said.

Smith Travel Research compiled the report after surveying 147 properties that represented 46,765 rooms, or about eight of every 10 lodging properties with 20 rooms or more. The survey results confirmed what the hotel industry feared all along — that revenue was falling short this year.

"If you were reading the tea leaves at the start of the year, it's not a surprise," said Mike Paulin, owner of Aqua Hotels & Resorts. "The bloom has gone out of the blossom."

Hotel occupancy has fallen every month on a year-over-year basis since April 2006.

A record average daily room rate of $198.68 in the first half of the year, was combined with a 6 percent drop in occupancy. That resulted in revenue per available room slipping to $148.20, or a 1.1 percent decline compared to the same period last year.

Marsha Weinert, the governor's tourism liaison, said the negative numbers reflect a shift in visitors' preference for accommodations. She said more visitors are choosing to stay at time-shares, condo-hotels, bed and breakfasts, and cruise ships than at traditional hotels.

These figures aren't reflected in the hotel occupancy and revenue report, she said.

"It has to do with the dynamics of the choices that our visitors have now in regards to accommodations," Weinert said. "There are more options available for our visitors than there was, so what we're doing is taking a finite number and dividing it amongst more options."

Weinert said even Japanese tourists who traditionally stay at hotels are choosing other forms of accommodations. In June, about 94,000 stayed at a hotel, a 7.9 percent drop from the same month last year, she said.

But about 8,400 Japanese visitors, or a 60 percent increase, stayed at a condo in June, while 860 picked a time-share, an 83 percent hike from June 2006, she said.

Weinert said choosing alternate accommodations is a trend across the visitor industry, not just in Hawai'i.

"It's a sign of what's going on in the lodging industry. There are a lot of different choices out there, no matter where you go," she said.

Weinert added that hotels here may need to shift their marketing strategy and target first-time visitors because they tend to stay at traditional hotels.

Although revenue is down, Paulin said he's not overly concerned because 2007 followed five years of record revenue. In the first half of 2005, statewide room revenue was $1.43 billion and $1.33 billion for the first six months of 2004.

"I think we are at a new plateau," Paulin said. "It's not a bad plateau to be at compared to where we were five years ago. The problem with growth is the continued expectation of growth."

Reach Curtis Lum at culum@honoluluadvertiser.com.