Posted on: Saturday, April 9, 2005
80 Ilikai units set for time shares
By Andrew Gomes
Advertiser Staff Writer
A Northbrook, Ill.-based company plans to convert 80 units in the Ilikai Renaissance Waikiki hotel into a time-share operation, after resolving a dispute with the union representing Ilikai employees.
Shell Vacations said it completed a purchase of the rooms on Wednesday for an undisclosed price, and plans to begin time-share sales later this month.
The conversion is the latest in a growing trend of time-share operations in Waikiki, which has been under-represented in the industry compared with Neighbor Island resorts.
Shell said the Ilikai units, to be called The Waikiki Marina Resort at the Ilikai, will give the company a presence in Waikiki desired by its members.
The time-share company serves about 90,000 members at 19 properties in six states and Canada, including Kona Coast Resort and Holua Resort at Mauna Loa Village in Keauhou, Kona, and Paniolo Greens Resort and Kauai Coast Resort on Kaua'i.
"The purchase of this inventory in a prime location at the Ilikai represents an extraordinary opportunity for Shell Vacations," Sheldon Ginsburg, Shell president and CEO, said in a statement.
Unite Here, Local 5, formerly known as the Hotel Employees & Restaurant Employees union, filed a lawsuit on Monday in U.S. District Court in Honolulu to block the sale following disagreement over whether Shell had to assume the union contract covering 300 employees at the hotel.
The suit was settled yesterday, after the hotel operator agreed to service Shell's time-share units for seven years using union workers.
Jason Ward, Unite Here spokesman, said in general that conversion of a hotel to time-share can reduce labor by up to 50 percent or more because housekeeping is typically cut from daily to weekly service, and there is usually less demand for food and beverage services.
"Obviously that's a major concern to us with the continuing trend with time-share," he said. "We're hoping that the impact on our membership (at the Ilikai) will be fairly minimal."
The Ilikai units bought by Shell are studios with full kitchens. The conversion of 80 units represents about 10 percent of the property's nearly 800 hotel rooms.
The Ilikai has a total of 1,050 units. The Y-shaped building was built in the 1960s with a mix of residential condominiums and hotel rooms.
Forward One LLC, a California firm affiliated with the Zen family of Taiwan that owns California and Washington hotels, owns the Ilikai hotel units and sold the 80 units to Shell.
Forward One bought the Ilikai hotel operations from a subsidiary of the Industrial Bank of Japan five years ago for about $57 million, and in 2002 completed a $27 million renovation.
The Ilikai's time-share component joins other Waikiki vacation ownership projects including a recently begun conversion of the 480-room Ohana Reef Towers Hotel into 193 time-share units, and recently advanced plans by Hilton Hawaiian Village to build a 38-story time-share tower on the site of the old Waikikian hotel.
Hilton also converted 72 rooms on six floors at its Kalia Tower to time-share use in late 2003, after converting its 264-unit Lagoon Tower to time-share use in 2001.
Shell said the Ilikai units will be one of three new time-share properties the company is developing this year. The other two are in Napa, Calif., and Whistler, B.C., in Canada.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
