Outrigger to enter time-share alliance

By Susan Hooper
Advertiser Staff Writer

Outrigger Enterprises, a mainstay in Waikiki's hotel industry, would operate time-shares developed by Fairfield Resorts. Outrigger also may convert some of its own properties to time-shares. Associated Press

Under the terms of the partnership, Fairfield will develop time-share properties in Hawai'i that Outrigger would operate under a brand tentatively called Outrigger Vacation Club. Eventually Outrigger may convert some of its own properties to time-shares.

The two companies announced the alliance yesterday and, depending on regulatory approvals, expect to begin operations in early December, an Outrigger executive said. Financial terms of the deal were not disclosed.

The partnership gives Outrigger increased marketing muscle on the Mainland through Fairfield's network of 450,000 time-share owners, and it gives Fairfield its first introduction to the Hawai'i market with help from the state's largest locally owned hospitality company.

"Outrigger gets the marketing of its brand name to Fairfield's customer base in the U.S.," David Carey, president and chief executive officer of Outrigger Enterprises, said yesterday. "We will provide operational management support for them on projects we both sell and market in Hawai'i. Their expertise is running the sales and the marketing process, and our expertise is running the resorts."

The move comes during a period of rapid growth in Hawai'i time-share operations. Hilton Hawaiian Village is moving forward with its plans for a time-share tower. Starwood Hotels and Hyatt are also involved with the development of time-shares in Hawai'i, and the Marriott Vacation Club International expects to develop 750 time-share vacation units at Ko Olina on O'ahu's west shore.

Outrigger plans to lease space in one of its buildings for a Fairfield sales center, Carey said. He said he expects that "quite a number" of sales workers and other staff will be hired by Fairfield for its Hawai'i operations, although he could not provide more specifics about the number of jobs.

Initially, the partnership is likely to boost occupancy at Outrigger Hawai'i hotels because Fairfield will invite prospective buyers of Hawai'i time-shares that it develops to stay in an Outrigger property, provided they attend a sales presentation. Fairfield will pick up the cost of the Outrigger stay as part of the cost of its marketing effort.

Carey said the time-share customers could amount to "thousands of room nights a year," increasing occupancy in participating Outrigger hotels by as much as from 2 to 4 percentage points.

If the companies can obtain regulatory approval from Hawai'i and other states where Fairfield does business, it's also possible that Fairfield's time-share customers could stay in an Outrigger hotel in Hawai'i as a time-share exchange, Carey said.

Carey estimated that 85 percent of Fairfield's customers live east of the Mississippi — an area where the Outrigger brand is less known, he said.

Fairfield will work with Outrigger to identify Hawai'i properties that can be converted to time-shares and jointly develop new ones, with Fairfield providing the financial resources for renovations and new building. Some existing Outrigger properties could be among those converted, Carey said.

Before any sales begin, the Outrigger-Fairfield plans will be reviewed by regulatory agencies in the states where Fairfield does business, Carey said. The time-share industry is carefully regulated because it involves property sales and substantial investments.

Fairfield Resorts is a subsidiary of Cendant Corp., owner of Avis, Hawai'i-based Cheap Tickets and several other travel and real estate companies.

Outrigger Enterprises operates hotels in Hawai'i and several South Pacific locations. Carey said the two firms have talked about expanding time-share activities to the South Pacific, but want to be well established in Hawai'i first.

"The neat thing about this relationship from my perspective is everyone gets something out of it," Carey said.

"We give Fairfield Hawai'i to sell, hotels to house customers, sales center locations, and hopefully we'll agree on a nice mix of resorts that would be good time-share arrangements. And they bring us customers and brand awareness."