Marriott banks
on upgrades to lure
tourists back to Waikiki

The hotel company says its
renovations will go ahead

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By Russ Lynch
rlynch@starbulletin.com

With occupancy in its two Waikiki hotels hovering in the area of 30 percent to 40 percent, Marriott International Inc. is banking on more than $100 million worth of renovations to market a new "Waikiki experience," Edwin D. Fuller, president and managing director of Marriott Lodging International, said yesterday.

At a media breakfast at the Halekulani Hotel (which isn't in the Marriott family but was chosen because of construction at the Waikiki Beach Marriott Resort) Fuller said the company is spending between $65 million and $80 million to upgrade the Waikiki Beach property.

While that is going on, one of the hotel's two 650-room towers is closed for construction.

At the Renaissance Ilikai Waikiki, which is owned by another company but marketed under the Marriott-owned Renaissance brand, a $30 million upgrade of the 782-room property is in the works.

Both construction projects are scheduled for completion in January, Fuller said.

Add the Waikiki work to the $300 million, 750-unit timeshare development under way at Ko Olina by Marriott Vacation Club International, plus work on properties on other islands, and Marriott is spending more on construction in Hawaii than any other hotel company, he said.

The company's hopes of restoring Waikiki occupancy to pre-Sept. 11 levels are pegged on marketing the two Waikiki properties to new markets, essentially as new hotels, Fuller said.

Marriott has signed deals with 11 wholesalers on the West Coast who had not previously sold vacation packages for those hotels, he said.

One aim is to bring in travelers who have never been to Waikiki. Marriott also is looking to boosting group business, which has largely disappeared, at the same time it markets to high-end free and independent travelers, the "FITs" who make their own vacation arrangements.

"The Waikiki experience is misunderstood" in some quarters and the surest way to correct its false image of a place that has lost its charm, is to get people to come and then go back to spread the word, about the hotels and the whole Waikiki experience, he said.

That will mean some room discounting, but opening a "new" hotel always entails some discounts to get people to start using it and Marriott does not plan deep discounts, Fuller said.

The company is giving away hotel stays on television game shows both in Japan and on the mainland, he said.

The JW Marriott Ihilani Resort & Spa at Ko Olina is operating like a neighbor island hotel, emphasizing an experience different from Waikiki. Like Marriott properties on other islands it is experiencing high occupancy despite the tourism downturn, he said.

Occupancy percentages on the neighbor islands are in the 80s for hotel rooms and in the 90s for the timeshares, he said. Many visitors go directly to Maui without coming to Oahu and that is also becoming true for Kauai, he said.

Marriott is already a solid presence in Hawaii, generating $130 million in lodging revenues this year from hotels, plus its timeshare business. Fuller said the company's long-term aim is to have "a Renaissance on every island, a Marriott on every island and Courtyards where appropriate."

The company has two deals in the works to bring the Courtyards name here but is not ready to announce them, he said. Courtyards is Marriott's brand for smaller, moderately priced business hotels on the mainland.

Marriott in Hawaii: Marriott International Inc. >> Waikiki Beach Marriott Resort, 1,308-room hotel (formerly Hawaiian Regent), owns and manages. >> Maui Marriott Resort & Ocean Club, 606 hotel rooms, 154 time-share units, owns and manages. >> Ritz-Carlton Kapalua, Maui, 549-room hotel, manages and partially owns. >> JW Marriott Ihilani Resort & Spa, Ko Olina, 387-room hotel, and 18-hole Ko Olina Gold Club, both owned by Massachusetts Mutual Life, manages both. >> Renaissance Wailea Beach Resort, 345-room hotel, manages. >> Renaissance Ilikai Waikiki, 782-room hotel, owned by a California partnership controlled by Taiwan's Zen family, managed by Interstate Hotels Corp., marketed under the Marriott-owned Renaissance brand. Marriott Vacation Club International >> Marriott's Ko Olina Beach Club, 750-villa time-share project in West Oahu. First phases, 124 villas, to be completed in January 2003. >> Marriott's Maui Ocean Club, 154 time-share units at the Maui Marriott, to be completed next month. >> Marriott's Kauai Beach Club, 232 time-share units, Kalapaki Beach near Lihue. >> Marriott's Kauai Waiohai Beach Club, 231 time-share villas. Under construction, completion 2003. >> Sales gallery, 6,000 square feet, Waikiki Shopping Plaza. There is also a sales gallery at Ko Olina and another will open on January in the Waikiki Beach Marriott Resort.