Kahala hotel rejects Mandarin Oriental
A company related to the hotel's owner will assume management
In a major change at one of Oahu's top hotels, the owner of the Kahala Mandarin Oriental Hawaii will rename the property and remove the Mandarin Oriental Group from managing the hotel.
The hotel's owner, Trinity Investments affiliate Kahala Hotel Investors LLC, said the property will be renamed simply The Kahala. The hotel's management contract will be turned over to Landmark Hotels Inc., whose president, Charles Sweeney, is also chairman of Trinity.
The change, which takes effect March 1, effectively puts the hotel's management into the hands of an affiliate of the hotel's owner and removes the flag of one of the world's great luxury hotel brands.
Although the move eliminates Mandarin's presence from the state, a Mandarin executive said the company already is looking at opportunities to re-establish itself here.
"It's a loss, no doubt about it at this point in time," said Jan Goessing, general manager of the Kahala Mandarin. "But that does not mean that Mandarin Oriental will not have a flag in Hawaii in the future."
"There are specific developments that we are looking at," Goessing added, "but there is no contract or anything concrete that I can tell you about."
Sean Hahir, executive vice president and managing director of Trinity Investments, said the owner believes the storied Kahala hotel is a brand unto itself, one the owners intend to protect and strengthen.
The owners are planning a two-phase, $20 million renovation whose first phase will spruce up the property's rooms and common areas. The second phase will deal with landscaping, Hahir said.
"There's going to be no change to the essence of what the hotel is," Hahir said. "We're very sensitive, being a Hawaii-based company, to what the Kahala is and what it means to the community and the staff and the guests."
Hahir said Landmark has the experience to maintain the exceptional standards of the Kahala, which is Oahu's only hotel to carry AAA's Five Diamond rating.
Landmark previously managed the Kea Lani Resort on Maui from 1992 to 2001, when the Kea Lani had among the highest revenue per hotel room on Maui, Hahir said. Already the new managers of the Kahala have landed the hotel membership in Leading Hotels of America, a marketing network of independent luxury hotels.
Hahir commended Mandarin Oriental for management of the hotel during its 11-year run. Indeed, Hahir said the new owners discussed the possibility of Mandarin Oriental keeping the management contract, but decided to go with Landmark Hotels.
Mandarin's Goessing concurred that Mandarin and Trinity had tried to work out something but simply could not reach an agreement.
"We were working very hard with Trinity to come up with an arrangement that would work for both sides," Goessing said. "Unfortunately, we were unable to do that."
Despite Sweeney's roles with the owner and the management firm, Landmark will operate under an arm's-length management contract and receive a standard management fee for its services, Hahir said.
Opened in 1964, the hotel has long been a favored spot for well-heeled locals celebrating weddings, anniversaries and other festive occasions, as well as celebrities visiting the islands. More than a decade after Mandarin took over management of the hotel in 1993, many locals still refer to the hotel by its original name, the Kahala Hilton.
"At all times we're going to remain cognizant of what the Kahala has been and what it should be," Hahir said.