Queen Kapiolani Hotel via www.queenkapiolani.com
A substantial portion of the low end of the Waikiki hotel inventory is being renovated and will dramatically reduce the number of hotel rooms in the economy segment. My survey identified a total of $275 million or about $85,000 per key of completed or planned renovations. These properties helped set the floor on rates for hotel rooms in Waikiki, but once renovated, these properties will command higher rates.
Below is a list of hotels in this segment that have been or will be upgraded.
|Original Name||Rooms||New Name||Re-Opening|
|Ewa Hotel Waikiki||92||TBD||2016|
|Maile Sky Court||600||Holiday Inn Express||2016|
|Queen Kapiolani Hotel||314||Queen Kapiolani Hotel||2016|
|Pacific Beach Hotel||830||Pacific Beach Hotel||2016|
|Ohana West Hotel||623||Hilton Garden Inn||2016|
|Waikiki Joy||94||Waikiki Oasis||2014|
|Continental Surf||125||Vive Waikiki||2013|
|Ocean Resort Hotel||450||Hyatt Place||2012|
Prior to their renovations and repositioning, many of these hotels were achieving average daily rates of around $100. Now, they will be commanding rates over $150 and some will approach $200 per night. This is a dramatic rate increase for approximately 10% of the hotel rooms in Waikiki.
While there will be more competition in the upper midscale to upscale portion of the market, I believe that raising the floor on rates for a substantial portion of the market will lift rates for the entire market.
At a minimum, these renovations are a strong indication of the change of the Waikiki market from a bargain to an upscale destination.