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Outrigger Enterprises expands
far beyond its Waikiki roots
to add Pacific properties
While it's hard to ignore the buzz about Outrigger Enterprises Inc.'s $460 million Waikiki Beach Walk project, the company has been looking for growth far beyond Oahu.
The family company, which began with Roy C. Kelley in the 1940s, has morphed into one of the largest privately held lodging and hospitality companies in the Pacific.
Kelley and his wife, Estelle, began the business in the 1940s renting a back bedroom to military folks, but in recent years, the company's strategy has combined hospitality with real estate and retail investment opportunities in Hawaii and across the Pacific.
"The market is always changing and we are changing with it," said Chuck Kelley, grandson of the chain's founder and director of sales and special projects. "We have certainly not been stagnant over the last 10 years -- it feels like an evolutionary process."
Outrigger Hotels remained the domain of the elder Kelley couple until the late 1980s when they passed it along to son Richard. In turn, Richard Kelley's son-in-law, David Carey, became president of Outrigger Hotels Hawaii in 1988. Other younger family members, such as Chuck, also have joined the enterprise.
The Outrigger Terraces Resort in New Zealand is one of more than 50 hotels and resorts Outrigger Enterprises oversees across the Pacific.
"I remember sitting in the ballroom of the Prince Kuhio hotel as Hurricane Iniki was heading to Waikiki -- an hour and 15 minutes later it veered left and 80 percent of the residential homes in Kauai were damaged," Carey said. "That experience shook us and we started looking beyond Waikiki, where almost one in every four rooms is affiliated with Outrigger."
The company now manages or has under development more than 50 hotels and resort condominiums across the Pacific, with more than 12,000 hotel rooms, he said.
The company also manages condotels, time-shares and has embarked on partnerships with other hospitality companies such as Marriott, Embassy Suites and Fairfield Hotels & Resorts, he said.
While the company's main focus continues to be middle-class American families traveling on wholesale packages from the West Coast, the company is growing rapidly in other markets such as Guam, Australia, New Zealand, Tahiti and Fiji, Kelley said.
Last month, Outrigger announced an agreement to manage its first resort in Southeast Asia, marking a new phase for the company that first set sail for the South Pacific from Hawaii in 1998.
Outrigger reached an agreement with Indonesian developer PT Ocean Permata to manage a luxury 98-suite beachfront resort under construction at Legian Beach on Bali.
Outrigger Beach Club & Spa in Australia,
Bali is a natural extension for Outrigger, Lawrence said, adding that when completed the new beachfront resort will complement the company's existing inventory in Hawaii, Australia and New Zealand.
"We are particularly excited about this opportunity, as Bali appeals to much of the same customer base we currently host throughout the region, including visitors from Australia, Japan, New Zealand, and other shared-source markets," Lawrence said. "We are confident this location, on one of the region's most famous beaches, will also serve as a catalyst for additional future opportunities in Bali and other Southeast Asia resort destinations."
Outrigger on the Lagoon -- Fiji.
The Outrigger TeTiare Beach Resort in French Polynesia boasts over-water bungalows that rent for about $700 a night.
"9/11 almost killed the thing," he said, adding that in the meantime the family's Waikiki stock continued to age.
"Most of the Ohana products over a 10-year period make about as much as they cost to keep up," Carey said.
Despite the high costs of remaining in Waikiki, the Outrigger family is committed to is origins, Kelley said.
"It's a wonderful time to sell hotel properties so it would have been easy to throw in the towel rather than upgrade our Waikiki properties," he said. "The fact that we didn't means that the whole family is committed to continuing to grow the business as a future."
Outrigger broke ground April 1 on the $460 million, 7.9-acre redevelopment to turn a congested area of Waikiki into an outdoor entertainment plaza, with retailers, restaurants and four hotels.
"Over the years, the Lewers Street area has sadly deteriorated. The narrow sidewalks, lined with a concentration of aging hotels and low-end retail establishments, have more in common with fading inner city centers on the mainland than with the fabled Waikiki that people save for years to visit," said Melvin Y. Kaneshige, senior vice president and chief operating officer of Outrigger Properties.
Outrigger's PacificProperties owned or managed by Outrigger Enterprises Inc. and the opening dates under Outrigger:
Australia:
Outrigger Sun City Resort, August 1998 Cairns Resort by Outrigger, March 2000 Outrigger Coolangatta Beach Resort, April 2000 Outrigger Mooloolaba International Beach Resort, 2000 Outrigger Beach Club & Spa, September 2002 Outrigger Heritage at Port Douglas, September 2002 Outrigger on the Inlet, November 2002 Outrigger Hervey Bay, March 2003 Outrigger in the Village, March 2003 Outrigger on the Beach at Salt, January 2005 Outrigger Ettalong Beach Resort, April 2005 Outrigger Port Douglas Beach Club Resort, fall 2005
New Zealand:
French Polynesia:
New Caledonia:
Melanesia:
Guam:
Indonesia:
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