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The Honolulu Advertiser
Posted on: Friday, March 29, 2002

Halekulani's visionary retiring

By Susan Hooper
Advertiser Staff Writer

The tranquil, elegant Halekulani owes much of its luxuriousness to a beloved childhood memory of Shuhei Okuda, who retires Monday after more than 20 years as a top executive with the Waikiki hotel and its parent company, Mitsui Fudosan Co. of Japan.

When Shuhei Okuda was in charge of renovating the Halekulani hotel 20 years ago, he called upon his boyhood memories of the Yamato Hotel in Dairen City, Manchuria. Okuda wanted to bring "simplicity, serenity and elegance" to the Halekulani, which has earned an international reputation as a top Hawai'i luxury hotel.

Bruce Asato • The Honolulu Advertiser

Okuda, a senior adviser to the Halekulani Corp., was formerly chairman of Mitsui Fudosan (U.S.A.) and chairman of Mitsui Fudosan (Hawaii) Inc. During his years in the Islands, he has built the Halekulani into a luxury hotel with an international reputation, besting skeptics who said a high-end property would never succeed in Waikiki.

Okuda's vision for the Halekulani traces back to his hometown of Dairen City, Manchuria, where he lived during part of World War II. His mother's father, who owned a business in Dairen, had a custom of inviting each grandchild for a birthday lunch at the city's Yamato Hotel, which was set on a beach next to a golf course.

Although he was just seven at his last birthday lunch there, Okuda still remembers vividly the white buildings, the white table linens and women strolling the manicured grounds with parasols to shield them from the August sun.

"I was fascinated with this hotel," he said.

By the time he turned eight, the world had changed. Japan had just surrendered, ending World War II, and Okuda and his family returned to a Japan "in ashes." But the memory of the Yamato Hotel stayed with him.

It influenced his decision to begin his career at Tokyo's famed Imperial Hotel after graduating from college with an economics degree.

Two decades later, as a Mitsui executive charged with renovating the Halekulani, Okuda tried to recreate the "simplicity, serenity and elegance" of the Yamato Hotel in everything from the hotel's off-white color scheme to the white wooden shutters in the guest rooms.

Okuda has done much to shape the luxury tourism market in Hawai'i as well.

He prevailed upon Mitsui to renovate the Halekulani not into a three-star property with room rates of about $70 a night but into a high-end hotel with room rates at the 1984 opening of $225, theorizing that, at the lower rate, "I didn't think we could recapture our investment quickly enough."

Attracting Japanese visitors

Shortly after opening the property, Okuda also moved to increase the number of Japanese visitors, who at that time made up only about 5 percent of the hotel's guests annually.

He eschewed advertising, reasoning that the hotel wanted to target only "a very few affluent people." Instead, he turned to word of mouth, asking Tokyo's Okura Hotels & Resorts to mention the Halekulani to its well-heeled guests.

The strategy worked; by 1989 the annual percentage of Japanese guests at the hotel had risen to 65 percent.

As a representative of a Japanese firm doing business in Hawai'i, Okuda has been a witness to the rise and fall of Japanese investment here. The company bought the Waikiki Parc Hotel and opened it in 1988 after a renovation but refrained from other purchases after a few unsuccessful bids, he said.

The Halekulani Corp., which owns and operates the Halekulani and Waikiki Parc, helped renovate and manage the Kapalua Bay Hotel on Maui, but lost that contract after only a few years when the hotel's investors changed.

Now, Okuda said, he is recommending that Halekulani Corp. executives look into securing other management contracts instead of buying hotels.

"We have learned that to invest in a hotel property, it takes a long time to recapture the money," he said.

As a former student of economics, the 64-year-old Okuda offers trenchant observations about Japan's economic malaise, suggesting it is partly linked to a post-war economic boom that emphasized "making money" over the development of other skills and perspectives that could have given Japanese citizens the foundation for much-needed reform of their centuries-old social structure.

"The biggest problems, in my opinion, lie in Japan's history itself," he said. "... To get out from it, I think we need some kind of revolution."

Changing habits

More immediately devastating to Okuda's business were the events of Sept. 11.

With occupancies in the mid-70 percent range today, the hotel still is recovering from the aftermath of the attacks, when occupancies sank to the low 50 percent range, he said.

Japanese visitors, who now make up less than half of the hotel's guests, are returning, but their habits have changed, he said.

"In numbers they are gradually recovering, but in terms of spending it is different."

Now, as he begins his retirement, Okuda plans to keep his base of operations in Honolulu. But even as he eases out of the workaday world, he expects to keep an eye on the company he helped to build.

"I really want to sit back and see the growth of the Halekulani Corp. in the next decade or so," he said. "Its reputation is so great that if the whole world would recover from the shock of Sept. 11, we have a good chance of going to other areas to expand our brand."