Outrigger’s Pacific Odyssey

What do 50 years of hotel experience in Hawaii add up to on Guam?

November, 2000

It’s on the beach. It’s in a famous resort destination. At first glance, the Outrigger Guam Resort on Tumon Bay seems similar to many of Outrigger’s hotels in Hawaii. But a closer look reveals a distinct difference.

The 600-room Outrigger Guam is part of a huge project named “Pleasure Island,” which incorporates an enclosed resort, retail, entertainment and dining complex. The hotel was phase four of the five-phase project, which is being developed by a Guam company, Tanota Partners.

“It’s like putting a hotel on top of the Royal Hawaiian Shopping Center,” says Bill Henderson, Outrigger vice president of business development. “In the complex, or steps away, are a Sam Choy restaurant, a Steven Spielberg’s GameWorks, an UnderWater World Aquarium, TGI Fridays, Planet Hollywood and one of the biggest duty-free stores anywhere. It’s a high-energy location; having all that activity around is a magnet for the hotel.”

“There really aren’t many real complexes like this anyplace in the Pacific, not even in Hawaii,” says Dorsey Brady, the Outrigger Guam’s general manager. “Without leaving the roofed portion of this building, you’ve got retail and shopping, dining, entertainment, recreation and lodging.” Being close to the action is not an entirely novel experience for Outrigger, according to Henderson. “The Outrigger Waikiki and Outrigger Reef both have a huge amount of shopping and commercial space, and we have over 300 tenants in Waikiki occupying 270,000 square feet of retail and entertainment space. So it’s nothing really new. We love having lots of activity around our hotels. Our founder, Roy Kelley, had that vision long ago.”

Island of activity: Shopping, entertainment and recreation are all on the property at Guam’s Pleasure Island resort.

Outrigger, which is aggressively expanding, currently has 35 hotels and resorts in Hawaii and the Pacific, totaling more than 10,000 rooms. Of those, 20 are branded Outrigger and 15 are value-priced “Ohana” hotels. Outrigger employs more than 4,000 people throughout the region. When the Outrigger Guam opened in the summer of 1999, the island was just beginning to recover from a crippling slump caused by the Asian financial meltdown of 1997. Tourism arrivals from the all-important Japan and fast-growing Korean markets went into free falls. Then Supertyphoon Paka clobbered Guam in December 1997, all but insuring an economic disaster of mammoth proportions. It was against that background that Hawaii-based Outrigger Hotels & Resorts, and its Guam partner, Tanota Properties, pushed ahead with Pleasure Island. The bet looks like its beginning to pay off.

According to estimates from the Guam Visitors Bureau, the number of Japanese visiting the island in 2000 will exceed 1.1 million—the best numbers in three years.

Do Pleasure Island and the Outrigger Guam deserve part of the credit for the rise in visitors? “It’s too early to evaluate the impact of the improvements,” says Tom Iverson, professor of economics at the University of Guam, “and there’s no study underway that I know of. There are still some problems with signage and traffic, but personally, I think it’s on track.”

Although the Outrigger Guam’s location in the most intensely active section of Tumon Bay is vital, it’s not everything, according to Perry Sorenson, Outrigger’s COO. While acknowledging that “no amount of marketing can overcome a marginal location,” he also stresses the value of “authentic island hospitality, based on our tradition of welcoming strangers and having them leave as friends.”

Although Outrigger Hotels and Resorts has no equity in the Guam property, which is owned by the Ysreal family, Sorenson says, “We view ourselves as a ‘partner’ in that our relationship is more complex than a simple management agreement.”

Given that the majority of Guam visitors are from Japan, Outrigger’s planners had some crucial decisions to make about the personality of their hotel. They chose to follow a lesson they had learned from over 50 years of experience in Hawaii: Offer guests a genuine taste of the local culture. Brady says, “When we first came here, people told us, ‘You can’t do that. The Japanese want something more formal.’ But we believed that when people come to an island, they want an island experience. Our company has been doing that in Hawaii, and so we decided to do the same thing here.”

“Every island is different,” says Henderson. “The cultures, governmental issues and political status are all different. But in general, our sense is that people on islands treat each other differently than people on big land masses do; there’s some commonality there.”

“We have never assumed that we can ‘export’ Hawaii to new locations,” adds Sorenson. “Although these places may look like Hawaii, each has a very different history, and to ignore that would be disastrous. It is our responsibility to explore and understand the local culture and traditions of hospitality, the community sensitivities to tourism, and what is expected of us to become a good citizen.”

The Hawaiian word for hospitality is hookipa. In Chamorro it’s inafa maolek, the spirit of caring for others. In these different cultures inhabiting distant islands, many values are shared. Outrigger’s philosophy recognizes both the differences and the similarities as they expand their business into the southern and western Pacific.

Sorenson calls it “adding value to both the hotel and the market,” in part by making a concerted effort to infuse the indigenous culture into the everyday operations of the company’s hotels. It’s not an abstract principle, but management policy. Outrigger doesn’t just try to fit in to the local culture; it embraces it and practices its values.

“I believe that in Guam we’ve had an impact on the revival of the Chamorro culture,” says Henderson. “It was happening already, but we helped bring it up a level. We’ve always placed a high priority on delivering an experience that incorporates a sense of place, whether it’s in Guam, Hawaii, Fiji or the Marshall Islands.”

Adds Brady: “We’ve created an island-style atmosphere within the hotel. Because that’s what we do. We’re an island company. We were born in the islands, and we’ve run island hotels for 54 years. We know what island hospitality is all about, and we’ve brought it to Guam.”

The islanders have appreciated Outrigger’s efforts. At the Guam Visitors Bureau annual awards banquet this year, the company was honored twice, receiving the “Hafa Adai Spirit” award as well as recognition for a local arts exhibition displayed in the hotel. Also, according to Brady, the Outrigger was the first hotel on Guam to build a float for the annual Liberation Day parade.

Island experience gives Outrigger additional advantages as the company expands across the Pacific. “We’re well accustomed to dealing with the similarities of environment,” says Henderson.

For Sorenson, expanding across the Pacific involves two parallel modes of thinking. “It is consistent with our philosophy that each Outrigger should offer activities specific to its location,” he says, “while providing services and amenities consistent with market demands.” In Guam, practicing this philosophy has required understanding and incorporating qualities of the Chamorro culture while simultaneously addressing the needs of the Japanese visitor.

If experience in Hawaii has helped Outrigger on Guam and other Pacific islands, does the opposite also hold true? Can new knowledge be taken back home and applied to Hawaii hotels, whether they’re new acquisitions or renovated properties?

“Each Outrigger is specific to its market,” says Sorenson. “For example, at Wailea (on Maui) and Waikoloa (on the Big Island) we recognize that meetings and conventions will be a major market, with needs for special food and beverage venues, technology, and convention services. So we have emphasized that market in planning our repositioning and construction. We also recognize the importance of the family market in Guam and Fiji, where we have included extensive water activities both at the pool and in the ocean.”

Outrigger’s island experience is proving valuable in Guam. “Wholesalers in Japan are telling us, ‘You’re really doing something different,’” says Brady. “And our customers tell us they like it. We need to have that specialization, that individualization of the product to make a difference. They can go to Okinawa, Bali or the Philippines. We need to give them a reason to come to Guam.”

Outrigger continues to experiment in new island locations. An earlier venture into Tahiti failed to work out, but the company continues to seek opportunities for expansion there, as well as in New Zealand. It already operates four hotels in Australia. Its first Fiji hotel, the Outrigger Reef Fiji Resort, opened in October, after having been temporarily postponed by an attempted coup d’etat.

“We are looking for additional sites for Outrigger and Ohana expansion,” says Sorenson. “Equity participation would depend on the specific location, the needs of the developer, and the strategic significance to Outrigger of the location. Saipan has been on our ‘radar’ for some time, and we are currently looking at some potential opportunities there.”

Adds Sorenson: “Wherever we go, we’re always amazed at how much we know, and how much we don’t know. But as long as we’re respectful and inclusive of the culture, as long as we add value to the economy and the lives of the people in the community, we feel we’re being a good citizen.”


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John Wythe White