Waikiki Construction Refreshes Hotels

Current construction is a partial preview of the future

(page 3 of 3)

Rationale for more construction

It's not like there aren't any economic incentives to redevelop Waikiki. In fact, most observers in the travel industry say the changing demographics and expectations of today's travelers mean that Waikiki infrastructure – in spite of all the recent renovations – is becoming obsolete. "If you look at the overall visitor product in Waikiki," says Kyo-ya COO Ernie Nishizaki, "it's predominately built in the 1960s and 1970s. The exceptions on either extreme are the Moana and the Royal Hawaiian, which were build in 1901 and 1927, and the Hyatt, the Halekulani and the Prince, which were built in the early 1980s. But really, we haven't seen any new hotel product in 20 or 30 years."

According to Nishizaki, the age of the hotel product has far-reaching implications on the marketability of Waikiki. "What you see in a typical hotel built in the 1970s is a 280-to-300-square-foot guest room, very small bathrooms, and limited amenities. But today's visitor wants a guest room that's 360 to 480 square feet, a larger guest room living area, as well as a much larger bathroom. That's something that's not provided today in Waikiki, with the exception of the Halekulani, so there's a significant need to upgrade what we offer. If you want to attract that high-paying visitor from Japan, China, Korea and some of the emerging markets, you have to be able to compete with places like Bali and Cancun that have properties built in the last five years." That's one of the advantages of timeshare, Nishizaki says. Timeshare offers the kind of larger units with more amenities that today's traveler demands.

Of course, you still need somewhere to put your development. And even as Kyo-ya explores the regulatory challenges of a teardown, others in the visitor industry seem to have more modest expectations for future construction in Waikiki. Some, like Rick Egged of the Waikiki Improvement Association, see pockets of opportunity for retail development scattered around Waikiki in places like the mauka end of Lewers and the vacant lot behind St. Anthony's. Others are more cautious.

"Today," says Outrigger's David Carey, "my crystal ball says the most likely projects are going to be room renovations for hotels that have good enough bones that they can rationalize an upgrade." He pauses a moment before adding, "And residential conversions of hotel properties; I actually think that's going to happen."

 

Hilton Hawaiian Village: Two Decades of Construction

     Hilton’s plan for its renovated pool area.
     Rendering: Hilton Hawaiian Village

 

2001
    Kalia Tower construction
    $95 million

    Lagoon Tower renovation and conversion to timeshare
    $36 million

2006
    Construction of Ocean Crystal Chapel
    $6 million

2007
    Duke Kahanamoku Lagoon restoration
    $15 million

2008
    Ala Moana Boulevard road improvements
    $9 million

    Grand Waikikian construction
    $350 million

2009
    Paradise Pool construction (above)
    $7 million

    Tropics Bar and Grill construction
    $11 million

2011
    Rainbow Tower renovation
    $45 million
 

2012
    Alii Tower renovation
   

2013
    Diamondhead Tower renovation
   

2014
    Kalia Tower renovation
   

2015
    Tapa Tower  renovation
   

    Hilton Master Plan
    Two timeshare towers, retail and pool
    Estimated cost: $760 million

Note: Timeline subject to change. Budget for most future projects not disclosed.

Hawaii Business magazine invites you to comment on our articles and the issues they raise. Comments are moderated for offensive language, commercial messages and off-topic posts and may be deleted. Some comments may be chosen for inclusion in the magazine on the Feedback page.

Add your comment:

 

Don't Miss an Issue!
Hawaii Business,September