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The Honolulu Advertiser
Posted on: Tuesday, November 13, 2001

2 O'ahu hotels lose some luster

By Michele Kayal
Advertiser Tourism Writer

The Halekulani Hotel on Waikiki Beach has lost the coveted five-diamond rating by the travel industry that it held for the past 16 years.

Deborah Booker • The Honolulu Advertiser

The Halekulani and the Kahala Mandarin Oriental hotels have lost one of the industry's most prestigious ratings, falling off AAA's list of Five Diamond hotels for 2002 and leaving Honolulu without a property that holds the coveted award for the first time in 25 years.

The Halekulani, a luxury landmark in Waikiki, lost its fifth diamond when the awards were announced yesterday after 16 consecutive years of winning AAA's top honor. The Kahala Mandarin had been on the list the past three years.

AAA is the largest leisure travel agency in North America and its diamond ratings are among the industry's most prestigious. More than 44 million travelers belong to the membership organization, and hotel analysts estimate a five-diamond rating allows a property to add 10 to 20 percent to its room prices.

Though the downgrade will not go unnoticed, travel consultants said well-known properties have suffered little material damage when they've fallen in the past, and they expect the reputations of the Halekulani and the Kahala Mandarin to endure. The larger public relations battle, analysts said, may be for O'ahu as a whole.

"It sends a message, and it would be that O'ahu would, in my view, lose some of its luster," said travel consultant and trends pollster Peter Yesawich. "And it would perhaps be a reaffirmation of what some people in the trade believe to be true anyway, and that is that the nicer product in Hawai'i has migrated to the Neighbor Islands and is not to be found on O'ahu."

Since AAA began its diamond system in 1976, Hawai'i's capital island has always had at least one five-diamond property. The number of five-diamond hotels in Hawai'i has declined steadily in the last three years, going from eight in 1999 to three in 2002.

Maui has two five-diamond award winners, the Ritz-Carlton Kapalua and the Four Seasons Resort at Wailea. On the Big Island, the Four Seasons Hualalai has five diamonds.

AAA does not discuss specific properties, and spokeswoman Janie Graziani declined to comment on why the Halekulani and the Mandarin lost their fifth diamond. But she noted that luxury and service are what separate a five-diamond hotel from a four-diamond.

"I can tell you that it's never just one thing," Graziani said. "It happens quite frequently with the diamond ratings that a hotel will lose one diamond and then gain it back the next year again."

Of the roughly 30,000 properties rated by AAA, only 33 — or about 0.1 percent — hold a five-diamond rating for 2002.

The Kahala Mandarin Hotel hopes to regain its fifth diamond next year but anticipates the downgrade will not affect its business.

Bruce Asato • The Honolulu Advertiser

Executives of both hotels expressed disappointment at the downgrades, but said they are happy to have the devotion of their guests and favorable ratings from other sources.

Kahala Mandarin general manager Jan Goessing said AAA informed him that "inconsistencies in service" are what cost his hotel the diamond. But he chalked it up to a company policy that encourages employees to use their own personal style when interacting with guests, which might not always offer a uniform experience.

"I believe our service is very honest," he said. "If the experience overall was fabulous, then that's all I want to achieve."

The bad news from AAA was offset by good news from CondŽ Nast Traveler magazine, Goessing said, whose annual readers' poll published this month rated the hotel No. 4 among Pacific Rim resorts, up from No. 5 last year. But, Goessing added, he expects the hotel to have its fifth diamond back next year.

"The resort is as good as ever," he said. "We shouldn't spend too much time on this issue except for concentrating on getting better."

Halekulani general manager Fred Honda was not available for comment, but he issued a statement: "We regret that the American Automobile Association has not presented Halekulani with the Five Diamond Award.ÊWe are pleased however, that the hotel continues to receive accolades from other publications and organizations, but most importantly, from our guests, who are our ultimate judges."

Halekulani spokeswoman Joyce Matsumoto declined to outline AAA's specific comments to the hotel, but said the loss of the diamond was because the ratings criteria have changed.

"AAA standards have changed and Halekulani is constantly striving to maintain as well as keep the level that our guests are accustomed to," she said. "The criteria has changed, and obviously what they considered to be five-diamond before is not anymore."

About 60 percent of travelers consult some sort of rating guide, according to estimates. But analysts said ratings such as the diamonds tend to have more sway with neophytes than with more sophisticated travelers.

A rating can be more important for an independent hotel such as the Halekulani, analysts said. In the absence of a big name brand, like Marriott or Hyatt, they said, a "diamond" or "star" rating can become a "surrogate brand," a way to help travelers evaluate a property based on experiences with hotels of the same rating.

"When you get the five it's more of a status symbol than anything," said Joseph Kordsmeier, a hotel consultant based in Carmel, Calif. "I don't think anyone's ever measured the number of reservations that come because of a five. It's bragging rights. You can demand higher rates than the four-(diamond) next door, because people expect that. But the customer's experience is the most important thing."

Already struggling with the decline in tourism spurred by the terrorist attacks, O'ahu lost 34 percent of its visitors in September alone. The number of Japanese tourists, who account for roughly half of the island's visitors, fell 42 percent.

"It's a rather unfortunate message for the island," said Goessing. "We have a marketing battle to deal with anyhow in rebuilding the trust in O'ahu as a destination, at least for the U.S. Mainland. We don't want to be looked at as a second-class island from the quality point of view. So it's unfortunate, there's no doubt about it."

Les Enderton, the O'ahu Visitors Bureau executive director, said he does not expect the lack of five-diamond hotels in Honolulu to have a grave impact. But, he added, one of the keys to growing the island as a destination is to add more upscale accommodations.

"The real benefit to O'ahu is the wide range of product here," he said. "But we could use some more at the high end."

The five-diamond ratings are determined through anonymous, overnight visits to the properties by one of the company's 65 inspectors.

Inspectors review such things as the staff's tone of voice on the phone, whether room numbers and messages are given discreetly at check-in, whether pillows are turned up at night and whether the background is quiet when the visitor calls room service.

Whenever a property gains or loses a fifth diamond, Graziani said, at least two independent reviews are done by AAA senior staff, who visit the property to make sure it's going to get the diamond or lose it.

Goessing said he understands the reasoning behind the process but is not sure it gives a true picture of what a hotel is about.

"The way you're being ranked is by a mystery shopper who visits you once a year and experiences the resort for 24 hours," he said. "It's a very thorough exercise, and I understand why they've set up the system the way they've set it up, but you're still sort of reliant on that one day experience. ... It doesn't mean we're not a five-diamond level anymore. It means we failed the test in some way on that one day."

Reach Michele Kayal at mkayal@honoluluadvertiser.com or 525-8024.

Correction: Due to a Web designer's error, the captions in the above pictures were switched in a previous edition of this story.