Ritz-Carlton Kapalua plans $95M upgrade

Renovations will make use of materials indigenous to the islands

Less than 10 months after acquiring the upscale Ritz-Carlton Kapalua, Miami-Florida-based GenCom Holdings Inc. is investing $95 million --the hotel chain's largest reinvestment to date -- to add a new type of accommodation unit and give the five-diamond hotel more of a Hawaii look.

Founded by Karim Alibhai, a hotel developer and financier, GenCom owns Ritz-Carlton properties in Philadelphia, Key Biscayne, Fla., and Bachelor Gulch, Colo. GenCom has added or is in the process of adding full-ownership options to all seven of its Ritz-Carlton properties.

The trend toward family travel and the growing demand from visitors to own second homes in their favorite destinations has created a new market for hotel accommodations, said Kim Kessler, public relations director for Ritz-Carlton Kapalua.

"We have requests for a lot more suites compared to when we opened in 1992," Kessler said. "We have a lot more family travelers and incentive groups."

The Ritz-Carlton Kapalua is an AAA Five-Diamond oceanfront property on 50 acres of Maui's northwest shore. The plantation-style hotel is part of the 23,000-acre Kapalua resort on Maui.

Capital Hotel Investments bought the property in February 2001 from Marriott International, which had purchased it four months earlier from Nissho Iwai Corp. of Osaka, Japan. The hotel cost $206 million to develop in 1992.

Renovations at the hotel, expected to begin in July and finish in December, will focus on providing a Hawaii sense of place as well as catering to the upscale family and longer-term travel market, Kessler said.

"All of the Ritz-Carlton Hotels are moving away from a standard European look and are concentrating on finding a sense of place in all their locations," Kessler said. "For example in South Beach, the look is hip and trendy and in Bachelor Gulch our property looks like a lodge."

Interior designer Jon Staub of Philpotts & Associates Inc. will merge the colors and textures of Hawaii with traditional Ritz-Carlton elegance, Kessler said. The interior design concept will use materials indigenous to Hawaii, she said.

The Ritz-Carlton Spa and Fitness Center will be reconfigured as a two-story facility and expanded to 11,000 square feet, Kessler said, while three restaurants will be expanded or renovated as well. Teen activities also will be added to the Ritz-Carlton's menu of children's activities, Kessler said.

The company, which acquired the 548-room Ritz-Carlton Kapalua in March, also plans to pare down the number of guest rooms to 363 while adding 107 full-ownership residential suites.

Owners buying a residential suite will hold a legal deed to the property, but can elect to place it in a hotel rental pool run by Ritz-Carlton, said Vik Seshadri, a spokesman for the Ritz-Carlton Residential Suites at Kapalua. Exact terms of the arrangement are still being worked out, he said.

Jerry Landeck, a senior partner for GenCom Group, said this is the first time that Ritz-Carlton has offered residential suites in Hawaii.

The change is designed to capitalize on momentum from Hawaii's economy as well as appeal to the changing visitor market, Landeck said.

"It's a financing mechanism that allows us to upgrade the entire facility without losing guest rooms," Landeck said. "We are doing a very similar conversion at the Ritz-Carlton Bachelor Gulch and it has been very well received by the marketplace."

Judging from the record-setting success of the Trump International Hotel and Tower at Waikiki Beach Walk, GenCom expects buyers to embrace the Ritz-Carlton Kapalua's one- and two-bedroom residential suites.

Residential suite purchase prices are expected to start at $895,000, while daily rental rates will start at $475.

Suite owners will have access to hotel amenities ranging from cleaning service to grocery shopping and storage facilities to keep their personal belongings during rental periods, Seshadri said.

Membership privileges will be extended to owners to join the highly anticipated private golf club and the new Tom Fazio-designed golf course, scheduled to open in 2008, he said.

The product is designed to appeal to travelers who want second homes with turnkey services and smaller investments, Seshadri said.

Sales for the residential suites are expected to start in March, Seshadri said.