Aging Laie Inn to be demolished


POSTED: Tuesday, October 20, 2009

After a few false starts, the Mormon Church is going forward with its plan to demolish the aging Laie Inn and build a much larger hotel on the grounds adjacent to the Polynesian Cultural Center.

The 48-room Laie Inn, which opened in 1964 as the Laniloa Lodge, will be torn down in November.

The lease with Hospitality Associates, the management company for the hotel, has ended, and 15 employees were given notice last week that the property will close on Halloween, said Eric Marler, executive vice president and chief financial officer for Hawaii Reserves Inc., which manages property in Laie affiliated with the Church of Jesus Christ of Latter-day Saints.

“;Laie Inn has been an important part of the area's history, providing affordable accommodations for visitors to the Koolau Loa region,”; Marler said. “;As a community, we look forward to the new accommodations the project will provide for those enjoying the Polynesian Cultural Center and visiting friends and family in the region.”;

The Laie Inn was not the area's first major hotel. Benjamin Dillingham opened the Haleiwa Hotel in 1898 on the current site of Haleiwa Joe's restaurant.

Still, Laie Inn, best known for the kind of charms ubiquitous to roadside motels along mainland highways in the 1970s, was the first modern hotel in the rural Oahu. The 880-acre Turtle Bay Resort opened to guests in 1972.

The church, which has owned the former Laie Inn site since 1865, is in discussions with Marriott International Inc. to run a new 200-plus-room hotel, Marler said. The new hotel, which would be used by the church to train nearby Brigham Young University students to work in the visitor industry, also would provide some jobs for the Laie community, he said.

“;We are obviously hoping that any of the displaced employees will find employment soon,”; Marler said, adding that some of them might work at the new hotel.

The church originally wanted to open the new hotel in 2009; however, the most recent construction target is 2010, Marler said.

Details of the new hotel are still being worked out, but a pool, restaurant and banquet and meeting facility could be in the mix, he said.

“;They will be scaled to a modest size that fits our community,”; Marler said.

The church also plans to keep prices and amenities at a level that would differentiate the hotel from Turtle Bay Resort, he said.

“;We don't feel that we would be competing head-on with Turtle Bay,”; Marler said. “;We see this as a complementary offering at a different level in the market.”;

While there might be some overlap of leisure visitors between the two properties, the new hotel is more likely to support Laie and BYU than become a destination resort like Turtle Bay, said Joseph Toy, president of Hospitality Advisors LLC.

“;If it becomes a Marriott, it would probably be a lower-cost Marriott Courtyard,”; Toy said.

Because the hotel is being built on church-owned land, its operators have greater pricing flexibility, he said.

“;They'll have opportunity for a greater yield,”; Toy said. “;It also helps their base market that they've got a captured market made up of BYU friends and family and business guests.”;

The planned hotel is the only ground-up hotel — other than the Disney Resort at Ko Olina, which has a time-share component — currently under construction in Hawaii, he said.

“;It's a challenging hotel environment,”; Toy said. “;There are a lot of redevelopments planned and some time shares, but there are no other full-service resorts,”; Toy said.