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The Honolulu Advertiser
Posted on: Tuesday, April 10, 2001

Ohana Hotels to enjoy Maui presence

By Glenn Scott
Advertiser Staff Writer

Ohana Hotels will move its brand out of Waikiki for the first time when the company takes over management this spring of the Maui Islander Hotel in Lahaina.

Ohana Hotels will take over management of the 360-room Maui Islander Hotel in Lahaina from Aston Hotels & Resorts on May 1. The move allows parent company Outrigger Enterprises Inc. to expand its year-old Ohana brand.

Outrigger Hotels & Resorts

Officials for parent company Outrigger Enterprises Inc. said yesterday that Ohana will take over management of the 360-room hotel from Aston Hotels & Resorts on May 1. The move gives Outrigger a growing presence on Maui and provides its year-old Ohana brand with a chance to take root on a Neighbor Island.

Aston and Outrigger representatives met yesterday with the hotel's 76 employees and General Manager Lynnette McDonald to discuss the changeover. Outrigger said it expects to maintain the existing work force.

Barry Wallace, Outrigger's senior vice president for operations, said the hotel on 10 acres in the heart of Lahaina will offer Ohana a preferred location in a key market. He said Outrigger had been interested in the location three years ago, but new owner SVP Investments of San Diego went with Aston instead.

"We know the property pretty well," said Wallace. "And we know there is a tremendous amount of demand for moderately priced properties on Maui."

Statewide occupancy figures show that budget-class hotels had a strong first quarter, with occupancy rates rising into the 90 percent levels even as rates began to decline for high-end hotels. That contrast was especially true on Maui, which led last year's strong statewide performance in occupancy and room rate increases.

McDonald said the Islander's strong recent showing may have hastened the change to an Ohana hotel. The hotel had an 86 percent occupancy rate in 2000, she said, and has a 92 percent rate so far this year.

With the Ohana Maui Islander, Outrigger will operate six properties on Maui, including the newly renovated Outrigger Wailea Resort. The company also has four condominium resorts.

After acquiring the Wailea and another high-end hotel in Waikoloa in recent years, Outrigger Enterprises is not looking to buy the Islander, Wallace said. Instead, company officials are focusing on operating more hotels under the Ohana brand on Neighbor Islands.

David Carey, Outrigger's president and chief executive officer, termed the expansion a logical step out of Waikiki.

The Ohana brand grew out of Outrigger's interest in maintaining an identity for its budget-priced hotels in Waikiki as the company diversified its properties. Once established a little more than a year ago, Ohana immediately became Waikiki's largest hotel operator with more than 5,000 rooms.

As of May 1, Outrigger will control more than 1,400 hotel rooms and resort condominiums on Maui, noted Rob Solomon, senior vice president for sales and marketing. He said the property will offer more flexibility for bookings to consumers and travel agents.

He said SVP Investments' decision to switch from Aston to Ohana is less about contract costs than perceptions of shared outlook.

"It's really a matter of chemistry and timing," Solomon said. "It's a question of finding the right company that you're comfortable with at the right time."

Glenn Scott can be reached at 525-8064, or by e-mail at gscott@honoluluadvertiser.com.

Correction: As of May 1, Outrigger Enterprises Inc. will control more than 1,400 hotel and resort condominium rooms on Maui. A previous version of this story was unclear on the number of rooms it would control.