Hawaii's Top Lodging Companies
Is bigger better? Do bulging portfolios, brand segmentation, and unprecedented growth give some companies a distinct advantage over others? Critics claim that size affects quality and consistency. They believe smaller firms outperform the megacompanies by using a more-focused approach. Super-players say it isn’t so, arguing that combined resources, brand identity and sheer magnitude give them stronger hands in shaping the industry’s future and creating a healthier bottom line.
In this Hawaii Hospitality exclusive, we profile the major companies in our Top 10 Lists. Meet the power brokers of the state’s lodging industry who control more than a third of the hotel rooms in the state. Examine with us what makes them tick.
Outrigger 8543
Starwood 6485
Aston 6088
Marriott 4122
Hilton 4939
Hyatt 2638
Castle 1724
HTH 1657
Prince 1614
Marc 1578
Company Room Count
Sheraton 5153
Ohana 5143
Aston 5592
Hilton 4626
Marriott 3513
Hyatt 2638
Outrigger 2334
Prince 1614
Renaissance 1130
Fairmont 990
Outrigger 5599
Kyo-Ya 4678
Hilton 4626
Azabu 2382
HTH 1657
Seibu 1614
CNL 1310
Fairmont 990
HH&R 963
Host Marriott 806Compilations based on room count derived by Hawaii Hospitality survey of respective companies and are current as of November 2003.
Numbers reflect properties in Hawaii only, and exclude timeshare units.*Corporate profiles follow in alphabetical order.
Aston Hotels & Resorts
Aloha with Attitude is Profitable
Kelvin Bloom, Aston’s big kahuna, is banking on tikis. As Hawaii’s lodging industry reined in expansion spending over the last two years, Aston Hotels & Resorts spurred growth with new management contracts and aggressive renovation investment. Let’s recount the ways:
In July 2001, Aston won the contract to manage the recently sold Hawaiian Waikiki Beach Hotel (originally Holiday Inn) after fighting off national brands like Starwood, Hilton, Hyatt and Marriott.
Aston’s most recent acquisition is the newly developed Waikoloa Colony Villas, an upscale condominium resort in Waikoloa on the Big Island. It’s a brand-new property and a new contract. Roughly half of the planned 162 two and three-bedroom villas are already open, featuring sunken living rooms, gourmet kitchens, vaulted ceilings and private garages.
When it began managing the Aston Aloha Surf (January, 2000), a $3 million makeover was ordered for a surf-theme with boards hanging from the ceiling and photos of big wave surfers.
The Aston Waikiki Beach Hotel celebrated a grand re-opening in November 2002 after a massive $30 million renovation with a bold theme of “hip Hawaiiana” featuring giant tiki torches, a 30-foot volcano roof bar, “lava flow red” rooms and beaded closet curtains.
This theme approach has since become a trademark for Aston. Kelvin Bloom, company president, calls it “Aloha with attitude.” Best of all, it’s a profitable business strategy.
“Several years ago, we realized we needed to re-invest in our properties and get our owners to re-invest more,” says Bloom. “We recognized the need to revitalize Waikiki and rejuvenate Hawaii as one of the top destinations in the world, and to do that we’re going to have to think outside the box.”
While Aston has been aggressive with this attitude, it has remained prudent by not putting all of its eggs in one basket. In fact, the company’s biggest waves are being felt in the condominium resort market. The company, which began as a two-story walk-up, pioneered the condominium resort concept in Hawaii. Today, it manages 6,088 rooms on 30 properties on four Hawaiian islands, and almost half are condominiums (2,134 hotel rooms, 3,954 condos).
Aston is considered Hawaii’s leader in management of resort condominiums, offering a range of properties from luxury choices such as the Aston Waikiki Beach Tower to the full service Aston Kaanapali Shores in Maui.
In addition to adding new condominium resort rooms to its inventory, Aston is looking to amp up its focus on vacation ownership. ”Vacation ownership is the fastest growth area in the industry in the last few years,” Bloom points out. “It has a very high return on investment so we’ll most definitely be looking to expand in that area.”
As for new management contracts, Bloom says Aston Hawaii is in a better bargaining position now than a few years ago because of what he calls a “subtle shift” in negotiating leverage.
“Management companies have an enhanced leverage position due to the poor economy,” he explains. “The economic realities of the world have hit the owners right between the eyes. They’re starting to realize we’re all in this thing together.”
In 1998, Aston Hawaii was purchased by ResortQuest International (NYSE: RZT), which manages 20,000 vacation rentals throughout the
U.S. and Canada. The purchase placed Aston Hawaii in a position to expand, and it did, despite heavy hits on Hawaii’s visitor industry from 9/11 and the Iraqi War.
Bloom says there has been a steady rebound since President Bush announced the end of the war in Iraq last May. “We’ve grown in every aspect—rooms managed, occupancy, ADR and revenue,” Bloom says.
As to the future, Bloom is looking forward to new investment clout after the ink dries on a recent merger between ResortQuest and Gaylord Entertainment Company, a Mainland hotelier with flagship properties in Las Vegas and Florida.
“The merger will make our company much larger and more competitive,” Bloom predicts. “We’re working on several new projects right now, both in Waikiki and the neighbor islands. Hopefully the Gaylord merger will help us close these deals.”
“We’re going to be extremely bullish in 2004 and beyond.”
–Mark Doyle
Aston Hawaii: Aston Waikiki Beach Tower, Aston Waikiki Sunset, Aston at Waikiki Banyan, Aston Pacific Monarch, Aston Waikiki Beach Hotel, Aston Waikiki Beachside, Aston at Executive Centre, Aston Aloha Surf, Aston Waikiki Parkside, Waikiki Joy, Aston Coconut Plaza, Aston Waikiki Circle, Aston Waikiki Grand, Coral Reef, Hawaii Polo Inn, Honolulu Prince, The Whaler on Kaanapali, Aston Kaanapali Shores, Mahana at Kaanapali, Aston at Maui Banyan, Maui Hill, Aston at Papakea Resort, Aston Paki Maui, Maui Lu Resort, Hanalei Bay Resort, Aston at Poipu Kai, Aston Kaha Lani, Waimea Plantation Cottages, Aston Islander, Kona by the Sea, The Shores at Waikoloa, Waikoloa Colony Villas. back to top
Azabu
No News is Good News
Owner Azabu USA just completed a $2-million soft goods upgrade at Ala Moana Hotel. Azabu has made more than its share of headlines during the past two decades.
In the 1980s, both Tokyo-based Azabu Building Co. and its Hawai‘i subsidiary, Azabu USA, were aggressively buying Hawai‘i hotels, acquiring six of them and spending more than half a billion dollars. In 1986 Azabu was everywhere, the pacesetter in a wave of investors from Japan, paying top dollar for hotels and launching costly renovations and expansions.
In the 1990s after the Japanese investment bubble burst, Azabu made more headlines as it divested four of those hotels (Kona Lagoon, Keauhou Beach Hotel, Waikiki Beachcomber and Maui Marriott) in a series of messy foreclosures and other misfortunes. The bad news hit bottom in 1997 when three top executives of Azabu Building Co. were arrested after being accused of illegally hiding assets from creditors.
Today Azabu seldom makes news, and that seems to be the way the owners like it, as they shun publicity and decline interviews.Nevertheless, Azabu remains a major player in Hawai‘i’s hotel industry. Azabu Building Co. owns the state’s fourth largest hotel (1,230-room Hyatt Regency Waikiki) and Azabu USA owns the fifth-largest (1,152-room Ala Moana Hotel). They are solid properties that survived the tourism doldrums of the 1990s and are now steady performers in two distinctly different niches.
In the heart of Waikiki, Hyatt Regency Waikiki is operated by Hyatt (see page 33) and serves the tourist market, especially travelers from Japan. Ala Moana Hotel, in contrast, is on the fringe of Waikiki, is self-managed and serves a kama‘aina-oriented clientele of Neighbor Islanders, returning residents, corporate travelers and the akamai tourists who know it’s there.
Azabu paid $245 million in 1986 to acquire Hyatt Waikiki from VMS Realty, a Chicago-based investment syndicate. The Ala Moana Hotel purchase also occurred in 1986, sold for $69 million by a partnership of Dillingham Corp. and Pick-Americana Hotels of Dallas.
The Azabu companies’ roots date to 1956, when founder Kitaro Watanabe established a car dealership in the Azabu district of Tokyo. The company eventually expanded into luxury auto imports, real estate, finance, insurance and other areas. Its Hawai ‘i assets, which include King’s Village Shopping Center, are its only investments in the U.S.
—John M. Black
Castle Resorts & Hotels
Prince of Value and Variety
Chairman Rick Wall likes the G-word: growth Castle Resorts & Hotels is a subsidiary of The Castle Group, Inc., which was founded in 1994 with just 220 rooms. Today, Castle manages more than 2,500 hotel rooms and condominium units and employs 384 resort, hotel and corporate staff.
In Hawaii, it has 17 properties located on Oahu, Maui, Molokai, Big Island and Kauai. Among those properties are the Hawaiian Monarch Hotel, Waikiki Shore, Kamaole Sands, Hilo Hawaiian Hotel, Waimea Country Lodge, Kiahuna Plantation & Beach Bungalows, and Kaluakoi Villas.
Offshore properties are Aquarius Beach Tower on Saipan and The Spencer on Bryon in New Zealand.
Since its founding, Castle has been an acquisition-minded company that sparks its growth through full management and/or sales-marketing contracts. Three years ago, it employed First Security Van Kasper, a Mainland investment bank to help with acquisitions.
A potential target reported at the time was Marc Resorts & Hotels, which would have added 22 condominium properties with 2,000 rooms to the Castle portfolio. No deal was made, however. The companies operate separately today.
But Castle continues to prosper. In the past 18 months, Castle has signed contracts with the Waikiki Shore, Diamond Resort Hawaii, Royal Gardens at Waikiki, and the Hawaiian Monarch Hotel.
“These properties will add significantly to our profitability,” says Castle Group Chairman and CEO Rick Wall.
Look for growth to continue under the leadership of Wall and his team.
“We are always in a growth mode and have several opportunities pending,” he says. “We hope to announce these exciting expansion plans soon.”
While not revealing details, Wall did indicate “New Zealand is a destination we plan to strategically grow over the next several years.” But he affirms Castle’s “core competency” remains the marketing of Hawaii resorts.
Castle’s lodging properties, ranging from 17 to 286 rooms, caters to leisure and commercial accounts. Its brand promise is “more value, more variety.”
“Each property has different customer types and lifestyles it attracts based upon unique selling attributes, from the family market to business travelers,” Wall says.
Although Eastbound guest bookings have floundered recently, feeder markets on the West Coast remain strong, according to Wall. “The booking window has shortened, and we have experienced a shift in distribution to online travel and explosive growth through third party intermediaries and merchant models, such as Expedia, Travelocity, Hotels.com, and Orbitz.”
Castle Resorts was the first regional hotel company in the country to launch a private-label vacation package in partnership with Expedia. Online sales represent about 22 percent of Castle’s total business, a huge jump from 3 percent a year ago.
The travel agent remains an integral link in the distribution channel. Incentive programs, such as Castle’s 5 for 50 Program, rewards new retail and wholesale bookings. Agents get $50 cash for every five-night booking at participating Castle properties through Dec. 22.
A customer service program, introduced this Fall, puts general managers out front, greeting and meeting every guest.
“(General managers) will be visible and accessible to all guests during their stay, and not like many general managers who spend most of their time in their office or not interacting with the guest,” says Alan Mattson, Senior Vice President of Marketing.
As for trends in resort management, Wall says predictably, “There is growing pressure to provide higher and higher returns to owners. To do so, many management companies are reducing the level of guest services they provide, which in turn reduces overall expenses. Many smaller condominium and individual real estate companies are already doing this and in some cases can match our returns.”
But meeting competition head-on and mastering change are skills Castle Resorts & Hotels has honed over the years. Stagnation has never been the company’s style.
So expect this lodging brand and operator to add to its variety and value next year and beyond. One thing, however, won’t change. They’ll continue to treat guests royally at Castle.
–Susan Sunderland
Castle Resorts & Hotels: Waikiki Terrace Hotel, Hawaiian Monarch Hotel, Waikiki Shore and Pacific Marina Inn on Oahu; Kamaole Sands on Maui; Kona Reef, Hilo Hawaiian Hotel, and Waimea Country Lodge on Big Island; Makahuena at Poipu, Poipu Shores, Kiahuna Plantation & The Beach Bungalows, and Lanikai Resort on Kauai; Kaluakoi Villas, and Hotel Molokai on Molokai; Aquarius Beach Tower on Saipan; and The Spencer on Byron in New Zealand. CNL Hospitality Corp.
Keys to Unlocking Opportunity
When this Florida-based company became the owner of the 1,310-room Waikiki Beach Marriott Resort it joined the ranks of Hawaii’s top lodging companies.
CNL Hospitality Properties, Inc. is an affiliate of CNL Financial Group, Inc. that specializes in the investment of quality hotels and resorts.
hrough partnering with several top-tier lodging companies, CNL owns interests in a portfolio of 124 hotels with more than 25,000 rooms in 37 states with 19 nationally recognized hotel brands.
Headquartered in Orlando, Florida, CNL Financial Group, Inc. is one of the nation's largest, privately held real estate investment and finance companies. CNL Financial Group, Inc. and the entities it has formed or acquired have more than $6.5 billion in assets, representing more than 1,800 properties and 1,000 mortgage loans in 49 states.
CNL’s purchase of the hotel at the diamondhead end of Waikiki was the last of Hawaii’s major hotel properties to be sold since the Japanese investment bubble ended in the early 1990s.
Many were hoping the sale would breathe new life into the former Hawaiian Regent, Oahu’s second-biggest hotel after the Hilton Hawaiian Village. The Hawaiian Regent had fallen into disrepair over the years because of a lack of improvement financing from earlier owner, Otaka Inc.
The Hawaiian Regent was developed by American International Travel Service in 1971. It was sold to Tokyu Corp. the following year, which added a second tower before selling the entire complex to Otaka in 1986.
The hotel sits on leasehold land, a portion of which is owned by the Queen Liliuokalani Trust, and another portion of which is owned by the Bolte Trust. The lease runs through 2043, but the rent paid by the hotel is renegotiated every 10 years.
In November 2000, Marriott International purchased the Hawaiian Regent for $130 million. It was renamed Waikiki Beach Marriott Resort.
A year later, Marriott and CNL Hospitality Corp announced its partnership agreement to own and renovate the resort. Marriott is a minority investor in the partnership and manages the hotel under a long-term management agreement.An extensive $65 million redevelopment plan also was announced, which included renovations of all guest rooms and suites in the Kuhio Tower, lobby area, meeting space and restaurants/lounges.
“It was evident to us early on that the Waikiki Beach Marriott had a tremendous redevelopment upside, due to the global strength of the Marriott brand and the hotel’s attractive position in a prominent resort market,” says Charlie Muller, chief operating officer of CNL Hospitality Corp.
“We are extremely excited about our investment in this property, which fits squarely into our strategy of owning premium hotels in high growth markets and working alongside the industry’s leading lodging companies.”
In the sunset of having made a sweet deal, Muller boasts, “Waikiki is truly one of the world’s most distinguished destinations.”
—Susan SunderlandFairmont Hotels & Resorts
Joining Hawaii’s Luxury Icons
Regional VP David Roberts shines on Hawaii's two jewels, including The Fairmont Kea Lani (above). When Canadian Pacific Hotels, the largest owner-operated hotel company in Canada, acquired Fairmont Hotels in the spring of 1999, a new company was created called Fairmont Hotels & Resorts.
The faithful union of two companies with long histories would quickly result in Fairmont’s setting sail for Hawaii, finally adding a South Pacific jewel to its collection of tropical getaways already bearing fruit in Mexico, Bermuda and the Barbados under the Princess Hotels label.
Heeding the call of Fairmont CEO William R. Fatt, who was on a crusade to increase the company’s luxury portfolio, a mere two years would transpire before Fairmont negotiated the hotel industry’s largest international transaction of 2001. At a cost of $250 million (about $600,000 per room), the high profile of Kea Lani Resort in Wailea, Maui, was officially reflagged The Fairmont Kea Lani Maui.
In December 2002, the Big Island was next. There, on the Kohala Coast, the Fairmont’s “F” flag was raised over 540-room The Orchid at Mauna Lani, to officially become known as The Fairmont Orchid, Hawaii and the company’s 41st hotel. This time the price tag was a mere $140 million for a property that had cost Shimizu Land Co. and Mitsui Corp. $175 million when it opened in 1990. All in all, it was a nice profit for the real estate investment folks at Colony Capital LLC, who reportedly had paid $75 million for the site in 1996.
Fairmont Hotels & Resorts today is the largest luxury hotel management company in North America, with more than 19,000 rooms in more than 40 hotels under its extremely tasteful umbrella. These include the hallowed Plaza Hotel in New York, the Copley Plaza in Boston, and the Fairmonts in San Francisco and New Orleans, regarded as Fairmont icons.
Reflecting the growing confidence among hoteliers of a turnaround in the lodging business, The Fairmont Orchid launched a $3 million renovation in October, an early entry in the 2004 renovation splurge nationwide that PricewaterhouseCoopers estimates will climb to $3 billion.
Chief among the improvement at the Fairmont Orchid are the refurbishing of spa facilities and restaurants, and the creation of an exclusive floor. The latter, to be known as the Fairmont Gold Floor, will have 45 guest rooms on the sixth floor for visitors who want more personalized service from a specially designated staff, in the intimate surroundings of a plush sanctuary.
Brian Richardson, vice president of marketing for the Toronto-based Fairmont Hotels & Resorts, has said of the company, “the goal is to establish the Fairmont brand as the top-of-the-mind luxury hotel and resort chain on the continent. We are intent on building equity around the brand.”
If the penchant of financially able and willing consumers for luxury and elegance in their vacation surroundings continues (and there’s no reason to think it won’t), Fairmont’s current resort duos may find the family growing.
In mid-October, David Roberts, who is a 14-year veteran of the Chateau Whistler in Canada, put on his suit as regional vice president of the two posh Fairmont Hawaii outposts and flew to Toronto for a weeklong series of budget meetings at the Canadian Pacific Tower on Wellington Street.
Financial reports were forthcoming, and the news was not unlike what other major Hawaii hotel companies have been announcing when doing the Quarterly Earnings Dance of late: While earnings were down, the leisure market, which can’t quite shake loose its fond memory of the spectacular business of 2000, is continuing to make gains on its tedious, yet gradual climb to full economic recovery.
Leading luxury-ticket properties are actively engaged in revving up non-room-related sales. It has been predicted that RevPAR—those extra amenities that lure a visitor to spend more than the room rate—will rise 4.9 percent in 2004, the most since 2000.
The Fairmont Orchid as a destination spa seeks to further bolster the non-room-related sales that make up nearly 48 percent of total revenue.
—Karen Horton
Hawaiian Hotels & Resorts
The Hogans in Paradise
Who would have thought that a notable example of American entrepreneurship would be fully realized in 1959 when Ed and Lynn Hogan began a small retail travel agency in Point Pleasant, N.J., and called it Pleasant Travel Service. Coincidentally, it was the same year Hawaii became a state.
In retrospect, it would be a fortuitous development in the personal history of this couple who would eventually turn their focus to Hawaii travel, and go on to become deeply entwined with the development of tourism in the 50th state.
Less than 30 years later, Hogan would be named “Mr. Tourism Hawaii” by the State Legislature in 1987, the year the company brought its 2 millionth customer to Hawaii.
When the Hogans began what would become the largest and most successful charter operation to Hawaii in 1976, their distinct stamp of personable advertising would make the two synonymous with idyllic Island vacations. Their success resulted in spin-off capital investments in the substantial form of hotels: The 592-room Royal Lahaina Resort on Maui in 1982, the 4520-room Kona Hilton Resort (now the Royal Kona Resort) on the Big Island, and the 311-room Sheraton Coconut Beach Resort (that would become known as the Kauai Coconut Beach Resort) in 1986.
There have been changes in recent years. In 1999, Pleasant Holidays, having become one of the largest package wholesalers to Hawaii, sold a majority interest in the company to the Automobile Club of Southern California (AAA). (In Hawaii, it is still known as Pleasant Hawaiian Holidays. Pleasant Holidays reflects the company’s expansion to other resort areas in Mexico, the Caribbean, and the South Pacific.)
Pleasant Travel Service, Inc., which stands as a separate company, is the parent company of the Hogan family-owned Hawaiian Hotels & Resorts, and other Hogan enterprises, including the Hogan Family Foundation.The portfolio of Hawaiian Hotels & Resorts has been undergoing changes in recent years. From the three hotels previously under that umbrella, the number has dropped to two properties: The Royal Lahaina Resort and the Royal Kona Resort.
The Kauai Coconut Beach Resort was recently sold to the Presidio Hotel Group of California. Presidio is in negotiations with Marriott International for a management contract. When this is finalized, the Kauai property would become a Marriott Courtyard. Meanwhile, Hawaiian Hotels & Resorts is providing central call center services during the transition phase.
Regarding future plans of company, executive Glenn Hogan responds: “The Hogan family is now focusing on philanthropic endeavors. Ed and Lynn Hogan and their family are continuing to be entrepreneurs by looking at how to give back and touch people in a pleasant significant way. We have started an entrepreneur program at Chaminade, Gonzaga University as well as providing philanthropic endeavors to the disadvantaged. The family loves Hawaii and will always have a presence in Hawaii. We believe in a business cycle where you give back when you are so blessed.”
—Karen HortonHilton Hotels Hawaii
Mastering the Art of Rebounding
Hilton’s Peter Schall says the focus is on guest service and customer loyalty, not bricks and mortar. The last two years were rebound years for most of Hawaii’s lodging industry, with some players rebounding higher than others. The recovery from 9/11 had grown robust enough to allow Hilton Hotels Corporation to report a net income of $198 million for 2002, up from $166 million in 2001. After factoring in the industry-wide revenue dive during the Iraqi war and the SARS epidemic, Hilton appears to have turned in a strong 2003 as well.
Hilton Hawaiian Village Beach Resort & Spa, owned and operated by Hilton, did its part as it remained the largest hotel resort in Hawaii, the largest in the Hilton chain and one of the largest in the world.
Though it too suffered through the calamitous impacts of terrorism the year before, Hilton invested $155 million in 2002 to purchase the remaining 87 percent of the Hilton Waikoloa Village, the trophy 1,241-room resort property on the Big Island. Hilton had previously managed the property and owned 13 percent.
Since the buyout, the Hilton has undergone millions in renovations at both villages.
“We average around $20 million a year in renovations (in Hawaii), and we’ve already spent about that in 2003,” states Peter Schall, managing director of Hilton Hawaiian Village and senior vice-president for Hilton Hotels Corporation, Hawaii Region.
The weakened visitor industry over the last three years has forced hotels, large and small, to turn more to non-room revenue sources to help balance their budgets. The most tapped of these resources are their business and meeting facilities, an industry sector in which Hilton excels.
“A significant part of our revenue has always come from our banquet rooms and services, especially from the local market,” Schall says.” we have the largest meeting space in the state, second only to the convention center, but we also do whatever it takes to make sure our product and services are second to none.”What he’s talking about is enhancing the Hawaiian Village’s business services throughout the property. Every room on the Tapa, Rainbow and Kalia Towers will have high speed internet access by the end of the year, Schall says. Publicly accessible wireless internet is already in many of the hotel's ground floor public areas. Hardwire and wireless high speed service are available in all meeting rooms. Most guest rooms have two-line telephones with data port and speaker phone capability.
In addition to owning and operating its two renowned villages, Hilton manages the Doubletree Alana Hotel in Waikiki. The intimate boutique hotel offers 45 luxury suites and 268 rooms, a fitness center, sauna, heated outdoor pool and a business center. The hotel will soon begin a $1.9 million dollar renovation of guest rooms, corridors, public areas and meeting rooms.
Schall says Hilton is currently focusing much of its attention on guest services and customer loyalty. “Our On Cue’ computer system gives us customer history preferences,” Schall points out. “We can pull up customer profiles on any guests who have stayed at one of Hilton’s hotels previously, or at the Doubletree Alana Hotel.
“We can then market directly to those customers or greet them when they come on to any of our properties. They’re impressed when they check in and we’re already aware of their preferences. It helps build loyalty.”
Hilton spent millions in 2000 erecting its Lagoon Tower for vacation ownership, placing Hilton Hawaiian Village at the forefront of this fast-growing industry in Hawaii. Six floors of Kalia Tower are being converted to Hilton Grand Vacation Club luxurious studio suites and one bedroom condominium-style accommodations, scheduled for completion in December.
“We re-opened (Kalia Tower) on September 1 and were sold out on September 6,” Schall boasts.
—Mark DoyleHost Marriott
Acquiring a RevPAR Leader
The Hyatt Regency Maui Resort & Spa has a new owner. It’s a name familiar to Hawaii because of its historical roots in lodging and food service. Host Marriott is a Fortune 500 real estate company which owns 120 upscale and luxury full-service hotel properties. The 806-room Hyatt Maui purchase is its first property in Hawaii.
Host Marriott announced its acquisition of the Kaanapali beach property in October at a purchase price of $321 million. It is $4 million less than what KM Hawaii, a unit of Japan-based Kokusai Jidosha, paid in 1987 and about $120 million more than the present owner, Blackstone Real Estate Advisors, paid in 2001.
“This investment is another example of our strategy of acquiring high quality hotels in difficult to replace locations at a discount to replacement cost,” states Christopher J. Nassetta, president and chief executive officer.”In addition to further diversifying our portfolio, Maui has extremely high barriers to entry for new supply. In fact, supply has actually declined due to recent conversions to timeshare.”
The Hyatt Regency Maui opened in 1980, with a splashy debut by its original owner-developer Christopher B. Hemmeter. Its innovative design and features, including free-form pools with waterfalls, captured the imagination of travelers seeking a fantasy-like resort. The Hyatt today is the most prominent hotel and the RevPAR leader in Kaanapali.
Focus and a disciplined approach to business will continue to be the mantra for Host Marriott. Addressing shareholders in its annual report, top management reports,”Our near-term liquidity is strong and more than sufficient to deal with the impact of international events on our business. Over time, strengthening our balance sheet remains a high priority. Controlling operating costs has been another priority over the past year. The quality of our portfolio creates high guest expectations, and our team is working closely with our hotel operators to establish and refine operating benchmarks, reduce labor costs and generate savings in ways that do not impact on the perceived quality of our hotels or guest satisfaction.”
Translation: Host Marriott remains confident about the future.
—Susan SunderlandHTH Corp.
Island Hospitality By the Book
“It’s a real difficult job. You need physical dexterity, ability and good people skills, because you’re dealing with the customer and the back of the house. Both at times will complain at you.”
This was Corine Hayashi describing the rigors of waiting on restaurant customers when she was starting out in the hospitality business. Things haven’t changed now that she is president of HTH Corp., one of Hawaii’s top lodging companies with three hotels totaling 1,657 rooms. But both the company and the child-protégé have matured in significant ways.
HTH Corp. was founded in 1946 by Corine’s visionary father, Herbert Takami Hayashi, who was a contractor-developer after World War II. In the early 1960s he realized the potential of an area mauka of Ala Moana Center and built an apartment building, the Pagoda Terrace, which opened in 1963 as totally something else.
Inspired by a keen appreciation of nature, he developed the Pagoda Hotel and Floating Restaurant around dramatic koi fishponds that wind around Japanese gardens. The 360-room oasis today is a favorite of kamaaina guests and international visitors.
In the 1970s, he bought the Pacific Beach Hotel and incorporated an Oceanarium that stretches three stories high and is the largest of its kind in a hotel. The 280,000-gallon aquarium inspires the dÈcor and furnishings for the hotel, where ocean motifs and colors flow throughout the public areas and guestrooms.
In 1990, Hayashi bought the 460-room King Kamehameha Hotel in Kailua-Kona from Amfac Resorts. The acquisition was a strategic step to expand the HTH hotel division to the neighbor islands. Located on Kamakahonu Bay, the King Kamehameha Kona Beach Hotel fronts the only white sandy beach in Kona and stands on the grounds of Ahu’ena Heiau, a restored Hawaiian temple.
The landmark hotel on the Big Island was reported to be up for sale, according to a local business publication last November. Sources said pressure to sell might have been caused by debt HTH took out on the hotel and other holdings. Asking prices ranged from $17 million to $27 million. The property spans 13.2 acres, 7.5 acres of which are fee simple with the remaining 5.7 acres lease hold.
However, in the second quarter of this year, CB Richard Ellis reported in its real estate newsletter that King Kamehameha hotel had been taken off the market.
HTH Corp. spurred rumors by announcing a major refurbishing of the hotel’s guest rooms. New carpeting, bedding, window treatments and furniture are in place, along with new tile work and vanities in the bathroom, according to Mark McGuffie, HTH director of operations.
Seemingly, it’s business as usual for the family-owned enterprise, where consistency and giving good value are hallmarks of success. HTH is looking at more of the same in the coming years.
There is a continued focus on attracting families and wedding business at each of its properties. Groups and meetings also are important sources of bookings. The Pacific Beach Hotel has more than 22,000 square feet of meeting space.
Pagoda has 11,917 square feet, while King Kamehameha boasts 5,200 square feet of meeting space.
Building on her father’s legacy might seem like a tall order for Corine Hayashi, 37, but she’s up to the task. Her passion for serving in the hospitality business began at age 14. She’s since worked in nearly every job at HTH, from cleaning rooms to checking in guests at the front desk. The only job she’s leaving to the experts is diving into the Oceanarium to feed the fish.
–Susan SunderlandHyatt Hotels Hawaii
Key to Survival is Evolution
General Manager Frank Lavey of Hyatt Regency Waikiki. Hyatt Hotels Hawaii operates three resorts in the Islands. Those properties Hyatt Regency Waikiki, Hyatt Regency Maui Resort & Spa, and Hyatt Regency Kauai Resort & Spa, operate with the same values.
"While there are differences, we certainly operate under the same principles," says Frank Lavey, general manager of Hyatt Regency Waikiki. "Take care of your customers, take care of your employees, take care of your owners, take care of your buildings."
Lavey says 2003 has been a better year, albeit not as terrific as it has been in previous years. "Did we make a profit as a hotel? Yeah, but did we make as much as we have in the past? No," Lavey says.”We sustained a pretty long drought from the end of February to August.”
In August, the company saw light at the end of the tunnel and rebounded from its slump. The 27-year-old Hyatt Regency Waikiki was able to lift its hiring freeze and begin re-staffing. Lavey says it seems the company's positive outlook will sustain at least until the end of the year.
The number of North American tourists to the Islands is increasing, Lavey says.
When the Japanese bubble burst in the '90s, Lavey says the company wasn't as affected as other hotels because Hyatt has always given North American visitors their due attention.
"We've never ignored them," Lavey says. "You have to go to each individual market on a case-by-case basis."
Lavey says that because Hyatt is a large company that has a sizable Japanese market there are misconceptions that it caters mainly to the Japanese. "But really, it's been a pretty even split," he says.
Hyatt has its fair share of kamaaina business as well, and tries to appeal to that population by supporting local musicians such as the retro-Beatles cover band Rubber Soul.
The company has also been looking at mainland China as an increasing market, according to Lavey. The strict Chinese visa restrictions, however, have been cumbersome as are the post-Sept. 11 security concerns, he says.
Watching market trends is vital for business. The growing number of Web-savvy travelers who choose booking their reservations online over brick-and-mortar travel agencies is a force with which to be reckoned.
Specifically, North American travelers have been trained to search the Internet for the best deals, Lavey adds, whereas Japanese travelers have stayed loyal to travel companies for making trip arrangements.
To keep up with online shoppers, Hyatt had to adjust its rates to stay competitive. It's a matter of survival, Lavey says.
Another survival skill in a difficult market is retaining a good staff. "It's the employees that really make the difference for the customers," says Lavey, who has been with Hyatt for 16 years. "It's the attitude of the people who work in the facility. "It's paying attention to your customers' wants and needs, and trying to make sure we exceed their expectations.
"Hyatt's operating standards are very consistent all over the world."
A key difference that guests can enjoy at various Hyatt hotels is unique decor at every location. "It's one of the things we're proud of at the Hyatt – we do a very effective job of embracing the culture," Lavey says.
“Surprisingly, with all the setbacks we've had through all the years, our spa business has been the most consistent," Lavey says. "People just want to luxuriate and pamper themselves a bit."
—Genevieve A. SuzukiKyo-Ya Co., Ltd.
Prospering Through Staying Power
Kyo-ya is quiet but effective as a hotel owner in Hawaii, according to COO Ernest Nishizaki. Kyo-ya, a subsidiary of Japan-based Kokusai Kogyo Co., came to Hawaii in 1956 when it opened Kyo-ya Restaurant on Waikiki. As the oldest investor in Hawaii hotels, Kyo-ya did its buying before the bubble drove up prices and was unfazed while other Japanese investors came and went.
It acquired its Sheraton Hawaii hotels for less than $200 million between 1963 and 1974. Its five properties are the four Sheraton Hotels in Waikiki and the Sheraton Maui in Kaanapali. These hotels are part of the 14-hotel group of Starwood-managed properties in Hawaii.
At the helm of Kyo-ya is founder Kenji Osano’s nephew, Takamasa Osano, who is president and majority owner. Executive vice president and COO is Ernest Nishizaki, a UH TIM School graduate who started as a busboy at Kyo-ya owned Royal Hawaiian Hotel.
Today, Kyo-ya is one of the state’s largest employers with nearly 3,000 associates in its workforce. Gross sales in 2002 were reportedly $466.4 million, down from $499.8 million the year before. This drop is attributed by company officials to lower occupancy levels in Waikiki impacted by global events. But recovery is on course.
“It is no secret that the industry has not performed well,” says Nishizaki. “However, our strength is in our marketing and efforts to attract market share have responded well. We have been able to get good exposure in many of the secondary (westbound) cities that are now being served by Hawaiian and Aloha airlines.”
Additionally, “The Starwood Preferred Guest program is a strong loyalty program that is recognized as the best in the industry. It has helped to set us apart from other products,” Nishizaki says.
Kyo-ya’s properties have soared in value, and it maintains policy of putting the money back into improvements.
“We are entering into our renovation cycle for most of the properties, completely changing the look of our rooms and incorporating Sheraton Sweet Sleepers which will give our guests a fresh feel,” Nishizaki reports. “We are creating the room of the future with features that are innovative.”
The company refers to these as “wow factors” that will prepare the properties for the anticipated return of group and incentive business as well as a strengthening of the Japanese market in 2004 and 2005.
“There was a time when we could focus primarily on the financial indicators, stock market along with the strength of the dollar against foreign currency,” Nishizaki states. “In today’s (business) climate, there are those factors in addition to terrorist alert levels. Because of Hawaii’s dependency on air lift, you also need to watch the financial stability of carriers and the airline industry in general.”
“We work with the management company to ensure that we are operating at our optimum. This means implementing contingency plans during down markets, including supporting out of box concepts. We look to the management company to be innovative and work toward continuously improving the process.”
The formula is evidently working well. “We are very optimistic,” Nishizaki says confidently.
—Susan Sunderland
Kyo-ya hotels in Hawaii: Sheraton Waikiki, The Royal Hawaiian, Sheraton Princess Kaiulani, Sheraton Moana Surfrider, Sheraton Maui. Marc Resorts
Ready for Prime Time
President Matthew Delaney .
Waikiki Royal Suites (above).Matthew Delaney, president of Marc Resorts, is a man with a mission. Following the purchase of the company last year by Heller-White Hotel Management LLC, he is set on an aggressive course of acquisition and profitability. Marc Resorts wants to add two or three hotels a year to its portfolio, and says it’s ready for prime time.
The renewed vigor for expanding the brand comes with critical performance requirements. Phoenix-based Heller-White bought Marc Resorts from bankrupt time-share operator Sunterra Corp. in July 2002. It was a complicated deal, but essentially Sunterra gets a minimum of $1.1 million over several years and receives much more if Marc lives up to Heller-White’s expansion plans.
Bringing Paul Tomonari, a seasoned marketing and operations executive, onto its leadership team was also part of the mission. Executive Vice President Tomonari joined Marc Resorts earlier this year with 30 years of experience with major resort companies including Westin, Sheraton, and Stouffer. He already has stirred the sales pot with strategic partnerships and alliances.
This summer, Marc Resorts and Arizona-based Discover Resorts International signed a sales and marketing agreement that taps into Discovery’s central reservations network and worldwide web site with instantaneous links to its properties and established clients in Arizona, California, Colorado, Florida, Utah, Montana, the Caribbean and England.
Rebounding from the impact of 9/11, Marc Resorts offset softer occupancy levels with value-based pricing. Travel packages with extras such as grocery certificates, movie tickets and pizza deals were offered to inbound visitors and the kamaaina market.
Marc Resorts does well in the kamaaina market, which accounts for 15 percent of total sales. Strong support from local residents especially helps during tough times, according to Delaney.
Marc Resorts also took advantage of short booking windows to do last-minute promotions with online sales providers, such as Expedia. As the industry has learned, yield management takes on a whole new meaning when travelers surf the Internet for the best deals, book directly, and send traditional distribution systems into a tailspin.
But it’s all part of the travel game. And Marc Resorts is stepping up to be a player. Marc’s online bookings grew 6-10 percent over last year.
Part of the challenge will be to promote the Marc Resorts identity and brand. Its reputation and guest experience on property will be critical links to brand loyalty.
"The heady days of Hawaii tourism are unfortunately behind us,” says Tomonari, but he remains optimistic. “We have to do the basic things right now: selling (rooms) and operating properties.”
Things seem headed in the right direction. Delaney reports occupancy rate is averaging 84.7 percent this year. Average daily rate is 11 percent higher than last year.
Marc Resorts’ back-to-basics plan also calls for increased advertising visibility and continuing to offer its guests perks to win their loyalty. A new advertising campaign will premiere soon on local TV. The campaign aims to increase local brand awareness and promote kama'aina packages.
To maintain a competitive edge, Marc Resorts is investing nearly $4 million in the renovations of properties on Oahu. Upgrades are ongoing at the Diamond Head Beach Hotel, Island Colony-A Marc Suite, Marc Suites Waikiki,and Waikiki Royal Suites.
Looking ahead, Delaney says the company hopes to get back into operating full-service resorts. He points out Marc Resorts has a good collection of budget and economy to luxury properties, but lacks a full-service hotel with food and beverage, meeting space, and retail outlets. (In 1987, Heller-White owned the Ilikai Hotel and had a four-year management contract before selling it to a unit of the Industry Bank of Japan.)
“We want to continue to diversify our products so that we have something to offer everyone," Delaney says.
“We want a bigger share of a shrinking market,” Tomonari adds, noting that while there is no new hotel construction, there are renovations, re-branding, and other dramatic shifts happening with existing visitor accommodations. Opportunities abound, in his eyes.
– Emily Hunt/Susan Sunderland
Marc Resorts & Hotels: Diamond Head Beach Hotel, Island Colony-A Marc Suite, Waikiki Royal Suites and Marc Suites Waikiki on Oahu; Hanalei Bay Villas, Emmalani Court, Pali Ke Kua at Princeville, Pono Kai Resorts, Pu'u Po'a and Hale Moi Cottages on Kauai; Kona Bali Kai on the Big Island; Marc Maui Vista Resort on Maui; and Marc Molokai Shores and Marc Ke Nani Kai on Molokai. Marriott International
Conquering the Islands
Marriott Vice President Stan Brown keeps a “sleeping giant” awake for growth and opportunities. It is the “sleeping giant” of the Hawaii hotel industry, a vast and powerful company that spent 14 years basking in the accolades enjoyed by the 391-room Maui Marriott Resort at Kaanapali Beach, before seriously putting the pedal to the metal in the Islands 10 years ago.
Now the fastest growing lodging company in the state, it is a rare seasonal experience not to see grand opening and Marriott International, Inc. in the same sentence of a business section story. Total hotel lodging now: more than 4,100 rooms in nine hotels.
In 2003 alone, Marriott added its flag to two more resorts: the 521-room Wailea Marriott Resort on Maui (an Outrigger Resort) and the 545-room Waikoloa Beach Marriott Resort (also an Outrigger) on the Big Island.
Two more Marriott Vacation Clubs debuted this year, too: the 103-villa JW Marriott Ihilani Resorts & Spa at Ko Olina (with another 647 units by year 2016) and the Marriott Waiohai Beach Club on Kauai at more than 100 villa and hotel units, with another 88 in the construction rotation by 2005. The Pavilion at Ihilani, a $4-million outdoor meetings facility, opened in August. There are four Vacation Clubs in all.
Stan Brown, vice president for Pacific Islands, Marriott International, became a man on a mission when assuming his post in 1999. His mantra: “We continue to look for growth and distribution.”
That Marriott portfolio will expand to 14 properties in 2004 with the opening of the Marriott Courtyard brand hotel near Kahului Airport on Maui by mid-year. It is the company’s first moderate price point property in the state.
Management negotiations are in progress with the Presidio Hotel Group of California which recently brought the Kauai Coconut Beach Resort on Waipouli Beach in Kapaa from Hawaiian Hotels & Resorts. If finalized, the site is anticipated to become the Islands’ second Marriott Courtyard. Fairly significant renovation of the property, with a reopening targeted for mid-2004, would be expected.
It won’t stop there. For Brown, Marriott Hawaii-style has not reached saturation point. He envisions as many as five more full service properties (Marriott or Renaissance brands) plus another half-dozen tier (Courtyard or Residence Inn brands) in the state.
“I could easily see our property count grow to more than 20 in the next two to three years,” he says. That’s a pretty short time frame.
Brown’s response: “If you want to be conservative, say three to five,” although the way he says you and conservative sounds like it will be anything but.
Marriott is the No. 1 hotel operator in the United States and a proven leader in the hotel contract arena, managing or franchising about 2,600 hotels nationwide. The powerhouse is not in the real estate business and doesn’t want to be (that’s the job of Host Marriott).
That would mean tying up cash and limiting growth opportunities, Brown says. With a long-term contract in place—no 3- to 5-year ones for Marriott—the payoff comes after serious time, money, and marketing effort have been invested in the quality, in the branding, in the flagging.
“We’re investing for many years,” says Brown. “When we position a property, we have to go for the long-term outlook. Short-term contracts don’t make sense for investment. Our strength is to bring the business in, grow the business, grow the profitability through management contracts. That’s our preference.”The only real estate Marriott has in Hawaii are its Vacation Clubs, and those are sold fee simple (and selling extremely well, thank you), as well as a portion of the Ritz-Carlton Kapalua and the Waikiki Beach Marriott. Real estate is only purchased when a strategic location is at stake.
“In that case, we may make an investment,” the executive states. “Then our goal would be for one of our real estate partners to sell off the real estate, and keep the management agreement.”
At least once a month, Brown’s development team hears from a property owner interested in linking up with a powerful Marriott brand. The age of the assets, bedroom size, amount of investment required, and whether the facility could ultimately meet the quality of a Marriott brand’s standards is meticulously explored. Only then does a property stand a chance of becoming a Marriott, a Residence Inn, a Renaissance, a Ritz-Carlton, or a Courtyard.
In the future, look for the following, according to Brown. Continued growth in the wildly popular timeshare arena (expect mixed-use sites of Vacation Clubs and hotels). Probably another Ritz-Carlton or two, but most likely not in Waikiki, where the Waikiki Beach Marriott and the
Renaissance Ilikai Waikiki already comprise a 2,000-room inventory at opposite ends of the beach.
Continued support of the cruise industry from Marriott because it helps sell Hawaii and rooms. Possibly more re-flagging with Outrigger because it’s been a win-win situation for both sides: Marriott has 18 million people worldwide in its hugely successful rewards program, Outrigger doesn’t have global exposure. Marriott customers get a new resort product, while Outrigger gets increased sales and revenue flow.
–Karen Horton
Marriott hotels in Hawaii: Maui Marriott & Ocean Club, Ritz-Carlton Kapalua, Kauai Marriott Resort & Beach Club, Renaissance Wailea Beach Resort, JW Marriott Ihilani Resort & Spa at Ko Olina, Waikiki Beach Marriott Resort, Renaissance Ilikai Waikiki, Wailea Marriott Resort, Waikoloa Beach Marriott Resort. Vacation ownership properties: Marriott’s Kauai Beach Club, Marriott Maui Ocean Club, Marriott’s Ko Olina Beach Club, Marriott’s Waiohai Beach Club on Kauai. Outrigger Hotels & Resorts
When is an Outrigger Hotel a Marriott?
COO Perry Sorenson’s sights are set on external forces that affect internal strategies. If you can't beat them, join them. Outrigger Hotels & Resorts put the much-worn adage to good use when it joined forces with international consumer brand Marriott this year. The franchise agreement put the Marriott name on Outrigger's two Neighbor Island resorts, in return allowing the local company to tap into Marriott's global reach.
It's Outrigger's solution to a changed Hawaii market, Chairman Dr. Richard Kelley says. The entrepreneurial families like his own who started Hawaii's hotel business have been hard pushed to combat the worldwide name recognition of the big chains that arrived ten to 15 years ago.
The venture has been very successful, Kelley says. "One and one has really given us three over there (Wailea and Waikoloa)."
According to Chief Operating Officer Perry Sorenson, "Our Marriott properties' RevPAR year-to-date have increased three to four times faster during the year than our competitors."
That philosophy also has given Outrigger a new foothold in the lucrative timeshare market through an alliance with Fairfield Resorts, Inc. In addition, it recently redefined its brands, making clear distinctions between its upscale Outrigger hotels and resorts; the budget- and family-minded Ohana brand; and its condominium collection.
Outrigger Hotels & Resorts is the hospitality management arm of Outrigger Enterprises, Inc. From 38 properties and just over 11,000 rooms at the end of 2000, Outrigger now operates or has under development 50 hotels and resorts throughout the Pacific, with more than 12,000 hotel rooms and condominium units in Hawaii, Guam, the Marshall Islands, Fiji, New Caledonia, New Zealand and Australia.
In Hawaii, there are 5,599 rooms in Outrigger-owned properties, and 8,543 rooms managed by the company.
At home, Outrigger has consolidated its Waikiki portfolio, selling three of its older hotels to enable it to focus resources on the upcoming $300 million redevelopment of the Lewers Street area. In an attempt to get people back into Waikiki, the Waikiki Beach Walk will transform one of the older, more-congested areas of Waikiki into a tropical streetscape with shopping, entertainment and accommodations.
The start of the first phase, to add retail and entertainment space, has been pushed back to the second quarter of 2005. The second phase, which includes the construction of an 890-room Outrigger property, is set to begin in 2007."We're looking at different options to take advantage of where the market is," Sorenson says. In addition to hotel rooms, the property could include timeshare and a residential or condominium component.
Outrigger recently took over management of the Waikiki Terrace Hotel, which is being converted into condominium units. When renovations are complete in 2004, the property will be rebranded the Outrigger Luana Waikiki and marketed with the company's collection of 10 condominiums.
In 2002, Outrigger stepped into the fast-growing timeshare market through an alliance with Fairfield, the world's largest vacation ownership company with more than 450,000 owners. Fairfield now offers accommodations at Outrigger's Hawaii hotels and uses its extensive sales and marketing channels to market Hawaii travel packages and co-branded timeshare products to prospective owners.
While the number of repeat visitors is up, the future challenge is to attract new visitors, according to Kelley. And that must be done in a fast-changing environment where people are increasingly booking via the Internet and when security issues are paramount.
The economy and the travel industry may be returning to health, but the world situation has changed the playing field. It is no longer possible to plan for the future based on the past, Sorenson says, and flexibility is an increasingly important asset.
Regardless of competition at home, the biggest challenges these days come from other destinations such as Las Vegas, Orlando and Thailand, Sorenson says. And it's difficult to predict where people will feel safe spending their vacation when world events can change everything in the blink of an eye.
"We're focused more on learning, on being flexible to the things that may happen externally than developing long-term plans over the next eight years," Sorenson says.
–Alice Keesing
Outrigger hotels: Outrigger Waikiki; Outrigger Reef; Outrigger Waikiki Shore; Wailea Marriott, an Outrigger Resort; Outrigger Palms at Wailea; Outrigger Maui Eldorado; Outrigger Royal Kahana; Outrigger Napili Shores; Outrigger Kiahuna Plantation; Outrigger at Lae Nani; Waikoloa Beach Marriott, an Outrigger Resort; Outrigger Kanaloa at Kona; Outrigger Royal Sea Cliff; Outrigger Fairway Villas. OHANA hotels: Ohana East, Ohana Islander Waikiki, Ohana Reef Lanai, Ohana Waikiki Tower, Ohana Waikiki Village, Ohana Waikiki West, Ohana Reef Towers, Ohana Waikiki Malia, Ohana Waikiki Surf East, Ohana Royal Islander, Ohana Waikiki Surf, Ohana Maile Sky Court, Ohana Maui Islander, Ohana Keauhou Beach Resort. Starwood Hotels & Resorts
Upscale Villas Spur Growth
Hilo native Keith Vieira leads Starwood Hawaii’s hotel and vacation ownership operations. Starwood wants to set the pace for vacation ownership in Hawaii. With premier brands such as Sheraton Hawaii, Westin Hawaii, The Luxury Collection and W Hotels Hawaii, the giant hotel company already operates on five Hawaiian Islands and is looking to invest more.
“Starwood is very aggressively looking at Hawaii,” acknowledges Keith Vieira, senior vice-president and director of operations for Starwood Hotels & Resorts Worldwide, Inc.-Hawaii & French Polynesia “Our Westin Kaanapali Ocean Resort Villas opened in September, and we’re developing a new vacation ownership property in Princeville for our Luxury Collection. Plans encompass building 200 two-bedroom villas which may be under the Westin flag, because of the brand success on Maui.”The 14-acre beachfront Westin Kaanapali Ocean Resort Villas currently consists of 106 villas with 174 more under development. Over a hundred of the villas were pre-sold in phase one, at the highest prices ever captured by a timeshare project in the islands. Developers called it the “most successful” timeshare project ever built in the United States, and industry sources say Starwood may build a second timeshare property next door.
Starwood is regarded one of the most successful vacation ownership companies in the nation, with over 80,000 owners and guests. Sheraton Vacation Ownership and Westin Vacation Ownership provide upscale all-villa resorts in some of the most sought-after vacation destinations in the world.
Starwood’s exchange program, the Starwood Vacation Network (“SVN”), provides its members with access to other Sheraton and Westin Vacation Ownership Resorts and to a Starwood collection of more than 740 hotels and resorts in over 80 countries and at hundreds of other destinations.
Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with 740 properties in 80 countries and 105,000 employees at its owned and managed properties.
Starwood Hawaii operates 13 properties in Hawaii. In addition to its A-list brands, The Luxury Collection, Sheraton and Westin, the company has unleashed the “W” concept in Hawaii with the W Honolulu Hotel Diamond Head.
“The W Hotel is the fastest growing brand in the U.S., within big cities,” Vieira points out. “The ‘W’ concept is built around a style that is more residential, but with a great bar and great food and beverage services.”
Starwood has already launched a new W hotel in Mexico City and have two new hotels under construction in Seoul, Korea and Montreal, Canada. The W brand may be looking at another hotel in Hawaii, possibly in the Wailea area.
Starwood is investing in new properties and taking care of established ones as well. The Royal Hawaiian, perhaps the most distinctive landmark on Waikiki Beach, began an $8.2 million renovation to its Tower Wing this year. After 77 years as the revered glamour queen of Waikiki, the “Pink Palace of the Pacific” is testing the waters with a new contemporary Hawaiian look.
Starwood began another extensive tower renovation this year at the Sheraton Moana Surfrider on Waikiki Beach. A $4 million, 13,000 square-foot luxury spa, called the Westin Heavenly Spa, is scheduled to open at The Westin Maui in spring 2004. Renovation dollars also are being spent on converting the former Kona Surf Hotel into the Sheraton Keauhou Bay Resort & Spa.
“The trend is not buying and selling,” Vieira explains. “There are no new hotels being built in Hawaii right now. The trend is re-branding, which usually requires renovations and new or enhanced products and services.”
Vieira says he currently sees continued growth up to 10 percent in all markets, except for Japan, which is still experiencing a downturn – though it is looking better in 2004.
–Mark Doyle
Starwood in Hawaii: Sheraton Waikiki, Sheraton Moana Surfrider, The Royal Hawaian, Sheraton Princess Kaiulani, W Honolulu Hotel Diamond Head, Sheraton Maui, The Westin Maui, Kapalua Bay Hotel & Ocean Villas, Sheraton Kauai Resort, Princeveile Resort, Sheraton Molokai Lodge & Beach Village, The Lodge at Koele, Manele Bay Hotel, Sheraton Keauhou Bay Resort & Spa (opening fall 2004), Westin Kaanapali Ocean Resort Villas.
