Hawaii Hotel Investment Market, Hawaii Visitor Industry
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The Disappearing Low End of the Waikiki Hotel Market

Queen Kapiolani Hotel

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
Hokele Suites  115 SurfJack 2015
Waikiki Joy  94 Waikiki Oasis 2014
Continental Surf  125 Vive Waikiki 2013
Ocean Resort Hotel  450 Hyatt Place 2012
Total  3,243

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.


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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