Hawaii’s hoteliers capitalize on islands’ individuality
Hawaii’s hoteliers capitalize on islands’ individuality
07 SEPTEMBER 2016 8:44 AM

Hawaii continues to be a popular destination for visitors around the world as its islands continue to offer guests different experiences and hotel options.

REPORT FROM HAWAII—Hawaii is a bucket-list destination for millions, with its scenic beaches and volcanos, cultural experiences and exploratory opportunities.

Traditionally, the capital city of Honolulu on Oahu has been the international gateway for the whole state, said Joe Toy, president and CEO of Hospitality Advisors. Inventory started before World War II through ocean liners, he said, but tourism stopped during the war. The islands received a lot of exposure from servicemen after the war, which led to demand coming from those who returned.

In the late 1960s, the advent of the Boeing 747 allowed more middle-class Americans to travel to Hawaii, he said, which meant the state needed more hotels. The types of accommodations diversified, from simple hotels to luxury resorts to timeshares.

Mainland Americans make up the largest number of visitors to Hawaii each year, Toy said, with approximately 3.5 million coming from the western states and 2.5 million from the eastern states. Japanese visitors are the second-largest tourism group at 1.3 million visitors a year, he said, followed by about 800,000 Canadian travelers annually.

Travelers from the mainland U.S. include a high percentage of repeat visitors, Toy added, so they cycle through a number of hotel types. Those who have visited about eight times or so begin to look into timeshares or alternative accommodations.

Ninety percent of Asian visitors always stay in hotels, Toy said, and they tend to stay on Oahu in Waikiki Beach because they don’t typically stay long enough to visit the other islands. However, the big island of Hawaii is popular with the Japanese because of its volcano.

Waikiki’s ups and downs
When looking at Hawaii’s eight major islands, Oahu makes up about half of the state’s market, Toy said. The other half is split between Kauai and Maui.

Oahu has its urban destination primarily centered near Waikiki Beach in Honolulu, Toy said, and Waikiki Beach has gone through a major renaissance. Japanese capital invested heavily in the area during the 1980s and 1990s, he said, but almost all the resorts “went belly up” in the 1990s when the Japanese bubble burst. Wholesale ownership changes followed, as the Japanese companies were bought by U.S. investors.

The area deteriorated following this chapter, while the neighbor islands built up, he said, but the market started coming back in the early 2000s as companies invested billions into Waikiki. The market is doing well now, Toy said, and its visitors are there for leisure purposes, weddings and meetings.

Many are high spenders, he added.

“The Chinese are spending $300-plus a day, the Japanese $200 a day and U.S./Canadians are spending $150-plus, but they’re staying longer,” he said.

Kauai community
The island of Kauai has a laid-back market, Toy said, and the inventory has smaller resorts and many individual vacation units. There’s limited meeting space as the island is primarily for leisure travel and smaller groups.

“It’s sedate, romantic—a honeymoon spot,” he said.

One of the main draws of Kauai is it gives guests a glimpse of what it’s like to actually live there, said Ray Blouin, GM of the Hilton Garden Inn Kauai Wailua Bay, which opened in June. Guests get a feel for the community through the friendliness of the locals and the festivals every month.

“We think that’s really enjoyable, for the local residents and the visitors,” he said. “There’s an integration of visitors and locals I don’t think other major destinations in Hawaii have been able to capture.”

The beauty of the island has drawn multiple Hollywood productions, Blouin said.

More films have been shot on Kauai than any of the other destinations in the Pacific. Locals on the island get to know film crews very well and know how to support their work, Blouin said. As residents of Kauai have gotten used to the filming, they aren’t as starstruck when they run into celebrities.

“There’s a genuine respect the community has for people, and I think that’s one of the reasons a lot of movies stars buy property here,” he said. “I am sure they visit other islands as well, but the people of Kauai don’t make a big fuss over them. They enjoy the glimpse of what it’s like to live here.”

Blouin’s property was recently converted to the Hilton Garden Inn brand, and he said it’s difficult to say what its guest mix will be long term, but he expects to have mostly leisure guests. The renovation before the conversion should bring in more business guests than in the past because the property can provide a higher level of service to those guests, he said.

“I believe we’ll attract a little more business and military than in the past,” he said. “It will be predominantly leisure. It’s fun to see the reservation pace and how it’s differed from the recent past.”

Luxury and adventures
Maui is a top destination among Hawaii’s islands, Toy said.

The island is where some of the first master plans were built in the state, and there are a number of resorts there ranging from high-end luxury properties to midmarket hotels, condos and timeshares.

“The spreads on room rates and product really is of a nice scale,” he said. “You have a solid market segment from budget up to luxury.”

The Wailea area of Maui has multiple resorts, he said, and has representation from multiple brands, including Marriott International, Four Seasons Hotels & Resorts and Fairmont Hotels & Resorts, as well as several boutique properties.

“It’s the highest average daily rate resort district in the state,” he said. “It’s highly competitive.”

The island of Maui offers guests the perfect balance of adventure and relaxation, according to Mike Kass, GM of the Ritz-Carlton Kapalua on Maui.

“Visitors can choose to relax poolside while sipping a tropical Mai Tai or explore their adventurous side by ziplining, snorkeling, surfing, scuba diving, hiking and so much more,” he said via email.

His property offers a recreation program through a partnership with Jean-Michel Cousteau’s Ocean Futures Society that provides activities for children and adults, he said.

While Hawaii is mostly a leisure destination, The Ritz-Carlton Kapalua has done well trying to balance its guest mix, Kass said. Its function space and outdoor oceanfront venues have grown the property’s group business, he said, so its balance is 45% group and 55% leisure.

Editor’s note: Hilton Worldwide Holdings paid for all travel expenses and comped three roomnights for the grand opening of the Hilton Garden Inn Kauai Wailua Bay, where an interview for this article was conducted. Complete editorial control was at the discretion of the Hotel News Now editorial team; Hilton had no influence on the coverage provided.

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