Outrigger Enterprises Inc.
It was the vision of Roy and Estelle Kelley, back in 1932 when they put up their first building in Waikiki, to make it possible for value-minded travelers with thrifty budgets to vacation in paradise. While they may have had modest intentions back then, the Outrigger brand has since blossomed into a transpacific empire, with everything from moderately priced Ohana-branded hotels across Oahu, to four-star resorts on the neighbor islands and throughout the pacific.
“We had our heritage as an affordable budget company, but the advent of the bubble economy drove the high end of the market up. The growth of segmented hotel product across the United States redefined the consumer expectations for product at a higher level,” says W. David P. Carey III, president and chief executive officer of Outrigger Enterprises Inc. “And frankly the proliferation of resorts and cruise ships that are easier to reach and closer to the mainland all suggested that if someone were to come to Hawaii they had a higher expectation of quality. So we have systematically been upgrading the quality and caliber of our real estate.”
In July Outrigger committed $300 million to a multi-year development project on Lewers Street in Waikiki. And just two years prior, the company spent $50 million redeveloping both the Outrigger Waikoloa Beach on the Big Island and the Outrigger Wailea Resort on Maui – both of which have seen substantial decreases in occupancy rates since the terrorist attacks in September.
But Carey, whose wife Kathy is the granddaughter of Roy and Estelle, is not bowing down to an impending recession. Now, more than ever, he is depending on Outrigger’s core strength – the ability to bring a strong operating business to real estate ownership – to carry the company through this cloudy and unpredictable period. Carey’s confidence mirrors that of Roy Kelley back in 1963 when he coyly maneuvered the negotiation of a long-term lease for the beachfront property that is now home to the Outrigger Waikiki on the Beach. The Queen Emma Estate, which owns the land, had been in talks for a while with the globally recognized Sheraton Hotels and Resorts. When talks broke down momentarily over a dispute in lease rates, Mr. Kelley seized the opportunity to step in and steal the show.
Now Outrigger, with 100 percent of its real estate holdings directly influenced by the visitor market, is instituting a sit-and-see strategy. Carey says the company’s real estate approach is “relatively conservative,” although in the same breath, he seamlessly mentions the company’s desire to be “one of the dominant players in the Pacific.” Maybe it’s just the optimist in him, but Carey’s talks of continued growth and expansion make it seem as though the state’s decline in economic activity is but a passing shower, rather than a tempestuous storm. One thing is for sure. Amid the sea of bankruptcies and foreclosures, Outrigger’s buoyancy is most certainly a breath of fresh air.
Do you like what you read? Subscribe to Hawaii Business Magazine »