Sunday, February 17, 2002

A panoramic view from a room on the 32nd floor of the hotel. The photo is made up of nine separate images stitched together.

Keeping the faith

Despite tourism's downturn,
hotels pour millions into upgrades

By Russ Lynch

Hawaii's tourist industry is in the doldrums, but there is long-term support for the industry in the form of out-of-state capital.

The just-completed $60 million renovation at the 1,308-room Waikiki Beach Marriott Resort is an example.

Before Sept. 11, there was the $95 million creation of the 453-room Kalia Tower at the Hilton Hawaiian Village. Ongoing, there is the $27 million refurbishing of the Renaissance Ilikai Hotel Waikiki. In the future are another hotel on the Hilton complex, more than $300 million in new investment in Marriott timeshare villas at Ko Olina, Outrigger Enterprises Inc.'s plan for more than $300 million worth or redevelopment in the Lewers area of Waikiki, and other developments around the state.

What this adds up to is a serious commitment to Hawaii's tourist business that shows confidence in the future despite the current slowdown.

A stone fountain and pool replaces what was once the Lobby Bar in the main foyer of the Waikiki Beach Marriott Resort Hotel.

Marriott and its property-owning partners are the big players right now.

The idea behind the Waikiki Beach renovation is to bring back a true resort feeling, recreate a sense of Hawaii and keep happy travelers visiting and revisiting, said C. Dennis Nau, the hotel's general manager.

Marriott International Inc. bought the hotel in November 2000 for $125.5 million from the Japanese Otaka group, which, like most Japanese investors in the boom of the late 1980s, ended up facing a financial crisis when the economy went sour. The original building of what started out as the Hawaiian Regent was built on the Kalakaua street front with an unobstructed view of Kuhio Beach in the early 1970s. It was called the Kalakaua Tower. A second building, the Kuhio Tower, was built in the late 1970s on the mauka side of the 16-acre property leased from the Liluokalani Trust.

In 1999, Otaka renovated 578 of the 652 rooms in the Kalakaua Tower.

Marriott's entry in 2000 started the property in new directions. The company decided the 1999 room changes were acceptable but it would have to redo 74 more guest units in that building and all 658 in the mauka tower, which had not been upgraded in more than 20 years.

Marriott's policy is that "every five years we replace the soft goods (bedding, carpets and other daily use items in the rooms) and every 10 years we replace the case goods," the cabinets, beds and other furniture in the rooms, a more complete renovation.

A big part of moving forward with the Waikiki Beach Marriott was the partnership with CNL Hospitality Group, which has partnered with Marriott in more than 30 hotels. CNL, part of Florida-based CNL Financial Group, buys the hotels Marriott has secured and holds a majority partnership with Marriott as a junior partner on a long-term management contract.

Marriott is a management company more than a property investment business and it is CNL paying for the renovations. In late July, CNL finalized its partnership with Marriott for the Waikiki property but Marriott already had the major work under way.

One of the first steps was to change the names of the buildings, the restaurants and the meeting rooms to give them a Hawaiian flavor, Nau said. Queen Liluokalani had a summer home on the property, which she called Paoakalani. The mauka tower is now called the Paoakalani Tower. The queen, Hawaii's last reigning monarch, had a guest house nearby called Kealohilani and that name has been given to the makai tower, which will soon undergo its own renovation.

The work that has been finished includes a new open-air entry and lobby, with native Hawaiian art, marble floors, classic wooden fixtures and a generally fresher, more open feel. A waterfall and stream is the centerpiece of an open gathering place where sundry shops and other facilities used to clutter the space.

A Seattle's Best Coffee restaurant is nearing completion at the mauka end of the space. Upstairs, the hotel's meeting and banquet facilities have been upgraded with what the operators see as a brighter, more Hawaiian look.

But the big change is in the guest rooms. They have been redone with a island-style decor -- wood furniture, flowered bedspreads and in the bathrooms, marble floors and granite counter-tops.

Plans are still being put together for a Phase II renovation, involving the makai part of the property. Nau said the details are not complete but in general they involve changing the appearance of the building from the beach and the street, developing a shopping and restaurant complex in a mezzanine area and, between the towers, an arcade area that will celebrate the history of Queen Liluokalani and educate visitors about what she meant to Hawaii.

Most of the restaurants in the complex have been redone and the Summery, popular with island residents and visitors alike for its pastries and other dishes, has become the Kuhio Beach Grill.

Marriott, which looked for a Waikiki location for a couple of decades after its first presence on the neighbor islands, is delighted with the property and customers seem to like what's being done there, said Nau, who has international hotel experience, including the post of general manager of the London Heathrow Renaissance Hotel just before coming to Hawaii last year.

John Limper, area director of marketing for Marriott and Renaissance resorts in Hawaii, said people who stayed at the hotel years ago and come back to the new Marriott are pleased with the changes, not just with the hotel but in Waikiki in general.

"They marvel at the improvements" in Waikiki -- the new bandstand, fountains, wider sidewalks, park improvements and so on, he said.

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