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The Honolulu Advertiser
Posted on: Tuesday, April 17, 2001

Hilton Hawaiian Village to add timeshare tower

By Andrew Gomes
Advertiser Staff Writer

With its newest Kalia Tower not even open yet, and timeshare sales just under way at its newly renovated Lagoon Tower, Hilton Hawaiian Village plans to develop yet another tower at its Waikiki resort.

The Penthouse at Hilton Hawaiian Village is part of a timeshare plan being offered by Hilton Grand Vacations Club. Hilton hopes its planned expansion will let it capitalize on timeshare industry growth.

Advertiser library photo • January 2001

The tower would be Hilton's seventh at the site, and, if approved, would transform Hilton into the largest time-share operator in Waikiki, with about half of all units on O'ahu.

Hilton Hotels Corp. recently applied to begin environmental studies of the 1.9-acre former home of the Waikikian Hotel and Tahitian Lanai restaurant on which it wants to build the 350-foot tower with roughly 400 time-share units.

The hotelier has been analyzing uses for the former landmark since it bought the skinny parcel wedged between its property and the Renaissance 'Ilikai Waikiki Hotel in 1999 for $20 million. Subject to permitting approvals, construction could begin as early as the third quarter of next year.

Hilton's move coincides with dramatic growth of the estimated $250 million time-share industry in Hawai'i.

Timeshare sales have been increasing by 25 percent each year over the past four or five years, at or above industry growth rates in other parts of the world, said Mitchell Imanaka, a local attorney and Hawai'i chairman of the American Resort Development Association.

Starwood and Hyatt are involved in Island timeshare development, and Marriott Vacation Club International expects to begin construction early next month on 750 vacation ownership units at Ko Olina.

Impressive sales

Meanwhile, Hilton, which opened its 264-unit Lagoon Tower timeshare in mid-January after a $36 million renovation and conversion from apartment use, has been impressed by the interest in units.

Hilton spokeswoman Bernie Caalim-Polanzi said about 15 percent of the "intervals," or timeshare blocks, have been sold.

Half of the sales have been to Japanese visitors. Unsold units have been offered to hotel guests wanting one-, two- or three-bedroom condominium-style units.

Caalim-Polanzi said the Waikikian timeshare project is still in a design phase. Preliminary plans call for a tower about as tall as Kalia atop a new parking structure. Also in the plans are more retail shops, a restaurant, wedding pavilion and pool with slides and waterfalls.

The empty six-story Waikikian would be demolished. The Tahitian Lanai and a string of retail shops that were on the site were demolished in 1997.

The Lagoon Tower's port-cochere would be moved from the Diamond Head side of the building to the 'ewa side.

Its pool would be removed to restore a continuous sandy shore around the Hilton lagoon.

Caalim-Polanzi said that vehicle and pedestrian access to Hilton Hawaiian Village would be created from Ala Moana Boulevard, while Dewey Lane, running behind the 'Ilikai, will be improved.

The plans would max out room development at the resort, bringing Hilton Hawaiian Village's room count to about 3,600 rooms.

Local visitor industry analyst Joseph Toy of Hospitality Advisors LLC said Hilton can easily leverage that density to help its time-share business.

"They have a built-in market to market to," he said. "That's pretty powerful."

Redevelopment opportunity

Ann Bouslog, president of the local real estate development and consulting firm Mikiko Corp., said the Waikikian is a "terrific site for (time-share) use," especially because there aren't many sites left in Waikiki for redevelopment.

The property's only challenge, she said, is that it is long and narrow, which makes it necessary for Hilton to use the area's 350-foot height limit to provide as many ocean views as possible.

Existing timeshare inventory in Waikiki, aside from Hilton's Lagoon Tower, tends to be old. Most of it was built in the 1970s and 1980s, Imanaka said.

Because Hilton's two time-share properties will be new or newly renovated and on the beach gives it an advantage in the market, according to Toy.

According to a new Department of Business, Economic Development & Tourism survey, there were 582 time-share units on O'ahu in 1999. That was about 16.5 percent of the statewide total of 3,524. Statewide, time-share units represented 1.6 percent of total visitor industry room inventory.

But Imanaka estimates the current number of time-share units higher, at about 5,000, with Waikiki's share at about 20 percent.

Andrew Gomes can be reached by at 525-8065, or by e-mail at agomes@honoluluadvertiser.com