Hawaii Hotel Investment Market
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Major Changes in Hawaii Hotel Branding and Management

There have been major changes in the branding and management of Hawaii hotels over the last ten years. Hawaii hotels have become more upscale, more brand-oriented and better managed.

The story behind this phenomenon dates back to the late 1980’s and early 1990’s when the Japanese invested heavily but didn’t actively asset manage their hotel investments. Brands and managers were not challenged and Japanese companies did not reinvest in their properties. Hawaii’s hotel inventory deteriorated and many properties fell into disrepair.

In the late 1990’s and early 2000’s, sophisticated hotel investors purchased, renovated and re-positioned under-performing hotels in Hawaii. They have also brought in more sophisticated asset management, branding and revenue management. The result of the new investment in the visitor inventory, more sophisticated asset management and relative stability in Hawaii’s source markets has been dramatic RevPAR increases. Since 2009, RevPAR in Hawaii has grown at a compound annual growth rate of 10.2%.

In 2005, there were 17,700 rooms under global flags in Hawaii. Since then, global flags have added approximately 6,700 rooms that were not previously flagged. This is an increase of 38%.

Global brand and management changes over the last ten years

2006

  • Waldorf Astoria brand and management of the 781-room Grand Wailea
  • Joie De Vivre management of the 80-room Coconut Plaza
  • Embassy Suites brand on 369 rooms in two towers in Outrigger’s Beach Walk project

2007

  • Westin brand for the 791-room Moana Surfrider

2009

  • Luxury Collection soft brand for the 526-room Royal Hawaiian
  • Courtyard by Marriott brand on the 404-room Wyland Waikiki
  • St. Regis brand and management of the 252-room Princeville Resort
  • Edition flag and management of the 360-room Yacht Harbor Tower

2010

  • Courtyard by Marriott brand on the 311-room Aston Makaiwa
  • Holiday Inn brand on the 496-room Beachcomber Waikiki
  • Wyndham Grand brand on the 87-unit Koloa Landing Kauai

2011

  • Disney brand on the new Aulani Resort at Ko Olina
  • Hyatt Place brand on the 451-room Ocean Resort
  • Courtyard by Marriott brand on the 455-room King Kamehameha Kona

2012

  • Joie De Vivre management of the 125-room Shoreline
  • Courtyard by Marriott brand and management of the new 138-room hotel at Kahului Airport
  • Highgate management of the 830-room Pacific Beach Hotel

2013

  • Andaz by Hyatt brand and management on the 347-room former Wailea Renaissance
  • Choice’s Ascend Collection for the 67-room Equus Hotel Waikiki

2014

  • Montage brand on 50 units in the Kapalua Bay Residences
  • Holiday Inn Express brand on the new 75-room hotel in Kona

2015

  • Autograph by Marriott brand on the 310-room Mauna Kea Resort
  • Courtyard by Marriott brand on the new 144-room hotel in Laie

The Future of Hotel Brands in Hawaii

The near term future for global brands in Hawaii looks bright. There are nearly 4,000 rooms that planned to be built for or will be converted to a global brand in the next few years. Some global brands that that are planned for Hawaii include:

  • Residence Inn by Marriott brand and management on the new 200-room hotel in Wailea
  • Holiday Inn Express on the soon-to-be renovated 600-room Maile Sky Court
  • Hilton Garden Inn brand on the 216-room Aloha Beach Resort Kauai
  • Hilton Garden Inn brand on the 663-room Ohana West Waikiki
  • DoubleTree by Hilton brand on the 388-room Naniloa Hotel Hilo
  • Hyatt soft brand on the 350-room Coco Palms resort on Kauai
  • Hampton Inn brand at Debartolo’s Kapolei shopping center development
  • Hyatt Place in Robertson Properties’ Live Work Play Aiea
  • Embassy Suites on the former Kisco site in Kapolei

Given that the majority of Hawaii’s visitor inventory in still not affiliated with a global brand, there is room for more growth. Branding of hotels, both globally and in Hawaii, will continue in the near term. However, I wonder when we will reach the saturation point. It will be interesting to see if there’s a backlash among customers. We’ve already seen smaller brands and hotel owners positioning their offerings as “anti-brands”.  In the meantime, I’m predicting more active global branding for Hawaii hotels.

This entry was posted in: Hawaii Hotel Investment Market
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F. Kevin Aucello has established himself as a leader in the tourism and hotel investment markets in Hawaii, Micronesia, Japan and the South Pacific. Kevin possesses many years of diversified experience providing a full range of advisory services for companies with equity, debt and leasehold real estate interests in the Pacific Rim. Kevin contributes key experience in the sale, strategic management and loan structuring of all types of real estate assets. He has extensive knowledge of all facets of the major global hotel brands and has developed relationships with senior executives in these companies.

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