Former Aston chief plans comeback to hotel scene

By Andrew Gomes
Advertiser Staff Writer

By Andre Tatibouet's count, he has overseen the management of 88 hotel and vacation condominium properties in Hawai'i during his career, which spans the past four decades.

Andre Tatibouet still owns two small Waikiki hotels. Andre Tatibouet • Born and raised in Waikiki • Married to Jane Tatibouet, former state representative, past leader of the Hawai'i Republican Party and former state chapter chairwoman of the American Red Cross • Has two adult children in Massachusetts • Former director of Hawai'i Visitors & Convention Bureau and Waikiki Improvement Association • Won Ernst & Young's award for Hawai'i hospitality entrepreneur of the year in 1997 Advertiser library photo • April 20, 1998

But in his first interview since being placed on leave from the company two years ago, Tatibouet says he is mounting a comeback.

At 61, the Hawai'i-born hotelier of French-German descent says his entrepreneurial spirit, Waikiki roots and optimism about Hawai'i tourism are leading him on a new business endeavor to partner with investors and buy at least half a dozen mid-price hotels in the state.

"This is the only business I know," he says. "I'm going to get full-speed back into Hawaiian tourism."

Tatibouet says he would like to acquire control of three or four properties in the next 12 to 18 months, with a goal of as many as eight within the next few years.

He says he is negotiating with the owners of two hotels. He declined to identify them, but said that one is in Waikiki, and one is valued at $75 million to $100 million.

Tatibouet also says it could hurt his plan to name interested partners, but says they are private and institutional investors on the Mainland who will contribute most of the acquisition capital.

The properties Tatibouet seeks aren't luxury resorts, but are a step or more down in the one- to four-star category — the kind of hotels Tatibouet knew well while running Aston.

Tatibouet is barred from competing with Aston for two years, but says he has no interest in managing any acquired properties, and he would contract with established management firms, including, potentially, Aston.

He says Mainland investors started approaching him in mid-2000, as his role at Aston was suspended because of a dispute with the Memphis, Tenn.-based company that had bought Aston in 1998.

Tatibouet sold Aston to ResortQuest International Inc., but retained rights to use the name outside Hawai'i. ResortQuest sued him two years ago for licensing the Aston brand to a ResortQuest competitor.

Tatibouet says that while on leave, he reached a preliminary agreement with a Mainland institutional investor to buy a local hotel last summer. But the deal unraveled, he says, after the Sept. 11 terrorist attacks.

The interest has since returned, according to Tatibouet, who cannot envision a better time than now to invest in Hawai'i hotels.

"It is an opportune time to buy," he says. "There is a considerable need for reinvestment in hotels."

Joseph Toy, a visitor industry analyst and regular commissioner in hotel foreclosures, says Tatibouet's timing is pretty good. The pool of buyers, he says, is smaller today than in the late 1990s. Also, the current industry slowdown has increased pressure on hotel owners with underperforming assets that never recovered from the last industry recession.

"There continues to be definite acquisition opportunities," Toy says.

Other opportunity-seeking investors also are looking to acquire and reposition Hawai'i hotels for profit, but the longtime Hawai'i hotelier sees himself as having an advantage because it is a market with which he is so familiar.

Local hotel broker Ron Watanabe says an experienced operator like Tatibouet should be able to convince investors that they can earn a better return perhaps even while paying more than competing buyers.

Toy agrees: "Andre is a very dynamic guy and has been in the industry for a long time and certainly knows the Hawai'i market inside and out."

Tatibouet literally grew up with Hawai'i tourism. His parents, Annalie and Joseph "Tati" Tatibouet, opened the Royal Grove Hotel in Waikiki in 1948 when Andre was 7.

After school at Jefferson Elementary on Kapahulu Avenue, the young Tatibouet would sweep floors, clean toilets, make beds — "whatever you needed to do. We were the maid, the janitor, the front desk ... you name it. It was a typical family business. There was not a job we did not do."

When he was 16, Tatibouet got his first paying job from Roy Kelley, patriarch of the Outrigger Hotels & Resorts chain, as a bellman and desk clerk at Outrigger's original Islander hotel at Kuhio and Seaside avenues.

Then Tatibouet, whose grandfather was an architect and contractor who did some apartment building in Hawai'i, developed the 14-room Cleghorn Apartment Hotel in Waikiki. He was 19 and attending the University of Hawai'i.

Ten years later, after earning a degree in U.S. and Russian history with a minor in English literature and philosophy, he completed his second development project, the 360-room Pacific Beach Hotel.

The Cleghorn was sold to develop the Pacific Beach, which was sold to help grow the predecessor to Aston, which by the time Tatibouet left, managed about 5,000 rooms at 35 hotel and condominium properties on O'ahu, Maui, Kaua'i and the Big Island.

Tatibouet says he has no regrets about selling Aston in a deal that brought him $30 million, plus stock worth nearly as much. Nor, he adds, are there hard feelings toward the company today.

"The team at Aston is a great team," he says. "I have a lot of aloha for the folks there. My disagreement was not with the company. It was with the parent company."

After the separation from Aston, the thought of retiring was out of the question, Tatibouet says, noting that his parents retired at 75.

Instead, from his home and business offices in Honolulu where he spends most of his time, he concentrated on two other companies with which he's involved, AFM Hospitality Corp. and Anlar.

AFM is a publicly traded Canadian lodging franchisor with multiple brands, including Aston, on 140 hotels primarily in Canada, Washington state and Oregon. Tatibouet is a major shareholder and director of the firm.

Anlar is a private holding company of Tatibouet and business partner Lawrence Horwitz, who is AFM's chairman. Anlar manages the Aston brand outside Hawai'i, and maintains other investments outside Hawai'i, including hotel leases and a restaurant and catering operation.

Tatibouet also owns two small hotels in Waikiki, the Aston Waikiki Beachside, which he redeveloped more than 20 years ago, and the Aston Coral Reef Hotel, which he bought in 1973.

Despite the diversified business interests, Tatibouet says he felt a need to re-establish a greater presence for himself in Hawai'i tourism.

"At the end of the day, smart people focus on where most of their skills are," he says. "I've been an entrepreneur since I was a kid, and I will always do that."

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.