Hawaii Vacation Rental Market Analysis: What Investors Should Know Before Buying

Hawaii isn’t just a vacation destination; it’s an experience. From snorkeling in crystal-clear water to hiking volcanic landscapes and unwinding on world-famous beaches, the islands deliver adventure and relaxation in equal measure.

For investors, owning a Hawaii vacation rental can feel just as magical. With more than 11 million visitors traveling to the islands each year, well-positioned properties can benefit from strong year-round demand.

If you’re wondering where to invest in Hawaii vacation real estate, two markets consistently stand out: Kauai (The Garden Isle) and The Big Island’s Kona Coast.

To help you decide where your investment dollars should go, we created a free, downloadable Hawaii Vacation Rental Market Analyses that break down performance trends and earning potential. Inside the reports, you’ll find:

• Rental income potential by property size

• Average occupancy by property size

• Average daily rate (ADR) by property size

• Booking lead times and length of stay

• Monthly occupancy rates

• Vacation rental inventory by property size across the Hawaii market

These reports are based on Evolve’s Hawaii market performance over the last 12 months and provide a helpful baseline for evaluating investment potential.

👉 Download the complete Hawaii Vacation Rental Investment Analysis. 

What the Best Hawaii Vacation Rental Markets Have in Common

While Kauai and the Kona Coast offer unique draws, they share several fundamentals.

1. Strong Demand Throughout the Year

Unlike many mainland markets, Hawaii benefits from:

• Warm weather year-round

• Seasonal demand spikes in late winter (snowbird season)

• Consistent spring, summer, and fall bookings

• Extended average lengths of stay compared to urban markets

• This steady demand can translate into more consistent occupancy and revenue,  especially for homes that are professionally managed and five-star ready.

💡Investor tip: With high occupancy potential, efficient cleaning, maintenance, and turnover processes are critical to maximizing earnings.  

2. Amenities Matter — A Lot

Hawaii travelers expect comfort alongside natural beauty. Top-performing Hawaii vacation rentals often include:

• Air conditioning (especially important in humid climates)

• Private pools or access to resort-style pools

• Outdoor spaces like large lanais, decks, or al fresco dining areas

• Beach gear (umbrellas, snorkel equipment, coolers)

• High-speed WiFi and smart TVs

• Local-inspired décor for authentic island vibes

Location is equally important. Proximity to these locations can significantly increase booking appeal:

• Beaches or waterfront access

• Hawaiʻi Volcanoes National Park (Big Island)

• Hāʻena State Park (Kauai)

• Coffee farms and cultural attractions

3. Vacation Rental Regulations Require Due Diligence

Hawaii’s short-term rental regulations have tightened in recent years, so it’s crucial to research local zoning and permitting rules before purchasing. Examples include:

• Big Island: Short-term rentals on the Kona Coast are generally limited to certain zones.

• Kauai: At least three to four permits are required, and length-of-stay restrictions may apply in some areas.

Honolulu has a full ban on all new short-term rentals, and Maui is pursuing a large-scale vacation rental phaseout. We recommend avoiding Oahu and Maui, instead focusing on Kauai and the Kona Coast, where legal vacation rental opportunities remain available (provided you do proper due diligence).

Investing in a Kauai Vacation Rental

Kauai is known as the Garden Isle, and for good reason. With lush rainforests, dramatic cliffs, waterfalls, and a more rugged, less commercialized feel, Kauai attracts travelers seeking:

• Adventure and hiking

• Seclusion and natural beauty

• Fewer crowds than Maui or Oahu

• Iconic filming locations (including Jurassic Park)

Why Guests Love Kauai

• Access to nine forest reserves

• Proximity to Hāʻena State Park and the Nā Pali Coast

• Quiet beaches and dramatic landscapes

• A slower-paced, off-the-beaten-path vibe

Because the island is relatively small, most properties are within reasonable driving distance of major attractions (though ocean views and beach proximity always command a premium).

Kauai Vacation Rental Investment Considerations

• Two-person occupancy limit per bedroom

• Licensing requirements that may take up to 180 days for approval

• Higher median home prices (~$997,000) compared to the Big Island

Revenue Trends

• Five-bedroom homes tend to generate the highest annual revenue.

• One- and two-bedroom homes often lead in year-round occupancy and make up the largest share of local inventory.

Kauai generally offers one of the highest revenue ceilings among Hawaii vacation rental markets, making it appealing for long-term investors willing to navigate the permitting process.

👉 Download our free Kauai Vacation Rental Investment Analysis. 

Investing in a Kona Coast Vacation Rental (Big Island)

The Big Island offers something no other Hawaiian island can: striking volcanic terrain, black sand beaches, and dramatic coastal cliffs. Within the island, the Kona Coast is the top vacation rental destination.

Why Guests Choose the Kona Coast

• Black sand beaches like Punaluʻu

• Hawaiʻi Volcanoes National Park access

• World-famous Kona coffee

• Resort-style communities and golf courses

• Strong seasonal peak demand

While there’s typically a modest demand slowdown in early fall, the Kona Coast experiences high occupancy peaks, creating meaningful revenue potential during busy seasons.

Kona Coast Vacation Rental Investment Considerations

• Short-term rentals are restricted to certain zones

• Investors must confirm zoning compliance before purchase

• Lower median home prices (~$873,000) than Kauai

Revenue Trends

• Four- and five-bedroom homes often command the highest daily rates.

• One- to three-bedroom homes frequently book more nights annually.

• Mid-sized homes (like three-bedroom properties) can perform exceptionally well.

This balance of demand across property sizes makes the Kona Coast appealing to a wide range of investors.

👉 Download our free Kona Coast Vacation Rental Investment Analysis. 

Download Our Full Hawaii Vacation Rental Market Analyses

As a dream destination for all types of travelers, Hawaii continues to stand out as a strong market for vacation rental investments. 

For a deeper dive into income potential, download our free Vacation Rental Market Analyses for Kauai and the Big Island’s Kona Coast. Inside, you’ll find:

• Average daily rate (ADR) by property size

• Average high- and low-season length of stay

• Market inventory insights

• Demand seasonality

Whether you’re purchasing your first property or optimizing an existing rental, our market data can help make your investment journey a breeze.