Sunday, May 22, 2005


Budget-oriented Aqua Hotels & Resorts has launched a marketing strategy that includes spa and fitness services as well as other hotel amenities. Above, Aida Alcantra, an occupational and massage therapist, gave Mari Obokata a hot stone massage Wednesday in the garden area of the Aqua Bamboo hotel.

Breaking away
from budget

After snapping up Waikiki "condotel"
properties, Aqua Hotels and Resorts
looks to move them upscale

Rapidly expanding Aqua Hotels & Resorts, which manages five of the seven most recent hotel-to-condominium conversions in Waikiki, now is turning its focus to toning up its budget image by offering amenities more often found at higher-priced traditional hotels.


"Now it's the opportune time for Aqua to redefine who we are." --Mike Paulin, Aqua Hotels & Resorts' chief executive

The company was founded four years ago by Marc Resorts founder Mike Paulin to operate rooms in Hawaii's hybrid hotel-condominium market, which rents individually owned units to visitors.

"We want to continue growing our business and our reputation as Hawaii's condotel leader," said Paulin, Aqua's chief executive.

Called the "Seven Pillars of the Aqua Brand," Paulin's strategy includes providing guests with upgraded interiors, spa and fitness facilities, daily continental breakfast, and access to mini-kitchens and wetbars as well as wireless or high-speed Internet. The amenities are backed by a guarantee that includes a 24-hour hot line to Paulin.

Aqua hopes that repositioning the brand will help the company, which has about 1,000 Waikiki condo units in its hotel rental pool, hold its own against the much larger corporate hotel brands, such as Outrigger and Aston. The bigger chains also are entering the "condotel" market while record real estate prices make selling off units attractive, particularly as demand lags for off-beach budget hotel rooms.

When Aqua first entered Hawaii's condotel market in 2001 with the conversion of the aging Aqua Marina hotel into a condominium, it needed to fill rooms immediately, so low prices became the company's strategy, Paulin said.

Josh Yunke and his sister Rebecca Yunke, both from Chicago, found the Aqua Aloha Surf hotel on the Internet. Aqua Hotels & Resorts is changing its emphasis to attract younger travelers seeking more amenities.

The budget rooms helped Aqua grow into Hawaii's largest condotel operator, with guests paying an average daily rate between $110 and $225, he said.

"We've been successful at maintaining excellent occupancies and achieving profits for our owners but now it's the opportune time for Aqua to redefine who we are," Paulin said, as value-minded customers increasingly look for added amenities rather than lower prices.

The Seven Pillars of the Aqua Brand are Paulin's next steps.

"Our employees have always done a great job in providing the essentials but now we're adding the distinct lifestyle services that will differentiate Aqua from other Hawaii condotel operators," Paulin said.

Aqua is going after independent travelers and young families -- think Generation X -- who are looking for boutique properties with good value, Paulin said.

"We're targeting the Halekulani wannabes," he said. "We want Aqua Hotels & Resorts to be seen as an affordable, hip, fun place to stay in Waikiki."

Pamela Copeland and her sister, Jeanette Copeland, from St. Louis, looked over a typical room at the Aqua Aloha Surf hotel Wednesday. They found the hotel on the Internet.

Aida Alcantra gave Mari Obokata a hot stone massage in the garden area of the Aqua Bamboo hotel.

Aqua's competitors also are chasing the trend, said Keith Vieira, senior vice president and director of operations for Starwood Hotels & Resorts Worldwide Inc. in Hawaii and French Polynesia.

"The younger, more affluent traveler makes money and wants to spend money. They don't just want a TV in their hotel room, they want a plasma screen TV that reflects their lifestyle," Vieira said. "That's why the lower-priced brands are having a hard time keeping up and why boutique hotels like W have such a following."

If Aqua sticks to its boutique niche, it's amenity-based strategy will likely pay off, especially with the "live for now" younger generation that sees value in being pampered, Vieira said.

"If they tell me that customers in their niche want spa and fitness services, I believe that," Vieira said, adding that despite delivering hotel-like amenities, Aqua is still so small that it is unlikely to really challenge Hawaii's branded chains.

If Aqua can deliver its strategy, price points for the chain will go up and that will benefit the entire marketplace, said David Carey, president and CEO of Outrigger Hotels & Resorts, which manages the Luana condotel in Waikiki as well as a host of them on the neighbor islands and in Australia.

"People are always willing to pay for better quality," Carey said. For example, he said, Luana has long fetched higher prices than the chain's other off-beach properties.

Aqua Hotels & Resorts

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